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Full-Text Articles in Business
The Relative Valuation Of Socially Responsible Firms: An Exploratory Study, Ali M. Fatemi, Iraj Fooladi, David Wheeler
The Relative Valuation Of Socially Responsible Firms: An Exploratory Study, Ali M. Fatemi, Iraj Fooladi, David Wheeler
Ali M Fatemi
In this paper we develop a model in support of the argument that the imposition of a “social responsibility” constraint could lead to increased profitability of the firm. To empirically test this, we compare the characteristics of firms making up the DS 400 index with that of a control group of firms not included in the DS 400. We find that socially responsible firms are, at a minimum, not dominated by their peer firms on the basis of returns. They are also not dominated by their peers on the basis of their betas, but dominate them on the basis of …
Yes, Dividends Are Disappearing: Worldwide Evidence, Ali M. Fatemi, Recep Bildik
Yes, Dividends Are Disappearing: Worldwide Evidence, Ali M. Fatemi, Recep Bildik
Ali M Fatemi
This study examines the patterns of payout policies worldwide. Utilizing data from a sample of more than 17,000 companies, from 33 different countries, we show that there is a significant worldwide decline in the propensity to pay dividends. Most of the decline is due to the payout policies of smaller and less profitable firms with comparatively more investment opportunities. We find that larger firms, firms with higher profitability, and firms with low growth opportunities have a greater propensity to pay dividends. The proportion of dividend payers varies substantially across industries as well. However, the proportion of firms paying dividends has …
Complexity Of Information And Trading Behavior: The Case Of Dividend Increase Announcements, Ali M. Fatemi, Sanjay Deshmukh, Iraj Fooladi
Complexity Of Information And Trading Behavior: The Case Of Dividend Increase Announcements, Ali M. Fatemi, Sanjay Deshmukh, Iraj Fooladi
Ali M Fatemi
We examine the intraday trading response of participants in the common stock market and in the preferred stock market to announcements of dividend increases on common stock. We find that participants in the preferred stock market respond more slowly to the announcement than those in the common stock market. Our results are consistent with the implications of Heiner’s model of behavior under uncertainty, which suggest that investors who face a more complicated environment respond more slowly to new information. Participants in the preferred stock market face a more complicated environment because they have to determine the source of financing of …
Credit Risk Management: A Survey Of Practices, Ali M. Fatemi, Iraj Fooladi
Credit Risk Management: A Survey Of Practices, Ali M. Fatemi, Iraj Fooladi
Ali M Fatemi
Purpose – Proposes to investigate the current practices of credit risk management by the largest US-based financial institutions. Owing to the increasing variety in the types of counterparties and the ever-expanding variety in the forms of obligations, credit risk management has jumped to the forefront of risk management activities carried out by firms in the financial services industry. This study is designed to shed light on the current practices of these firms. Design/methodology/approach – A short questionnaire, containing seven questions, was mailed to each of the top 100 banking firms headquartered in the USA. Findings – It was found that …
Corporate International Diversification: Evidence From Canada, Ali M. Fatemi, Iraj Fooladi
Corporate International Diversification: Evidence From Canada, Ali M. Fatemi, Iraj Fooladi
Ali M Fatemi
This paper investigates the impact of corporate international diversification on the shareholders of Canadian firms. The results indicate that, within the context of Canada, multinationals outperform their purely domestic counterparts. Specifically, we find that the shareholders of Canadian multinationals earn significantly higher abnormal returns. This holds true despite the finding that these shareholders are also exposed to a higher degree of systematic risk. Further, these results indicate that both the abnormal returns and the degree of systematic risk are increasing functions of the degree of international involvement.
Wealth Creation And Managerial Pay: Mva And Eva As Determinants Of Executive Compensation, Ali M. Fatemi, Anand S. Desai, Jeffrey P. Katz
Wealth Creation And Managerial Pay: Mva And Eva As Determinants Of Executive Compensation, Ali M. Fatemi, Anand S. Desai, Jeffrey P. Katz
Ali M Fatemi
Designing effective compensation contracts has become increasingly complex due to the globalization of the executive work force and the multitude of incentive schemes. We examine the relationships between managerial pay and firm performance among domestic and global firms using economic value added (EVA) and market value added (MVA) to assess wealth creation. Our work suggests that top managers in domestic- and globally focused firms are not only incented to increase EVA, but also rewarded for past additions to MVA. The results of our research suggest that managers of highly globalized firms tend to be paid at higher levels, reflecting the …
Corporate Risk Management: Costs And Benefits, Ali M. Fatemi, Carl Luft
Corporate Risk Management: Costs And Benefits, Ali M. Fatemi, Carl Luft
Ali M Fatemi
This paper establishes a framework within which the costs and the benefits of corporate risk management decisions can be analyzed. The most important conclusion is that risk management strategies should be pursued to enhance shareholder value. Although systematic hedging of all variation in the net cashflows may be in the best interest of the management, such behavior is inconsistent with maximizing firm and shareholder value. The extant empirical evidence cited is supportive of the notion that the strongest motive for risk management behavior is the avoidance of financial distress. However, there are offsetting costs to consider as well. The existence …