Finance and Financial Management Commons^™

Adaptive Learning Gain In Asset Pricing, Sedealy Juste Lokossou

Electronic Theses and Dissertations

This paper delves into the complexities of asset pricing, emphasizing the need to go beyond prevailing paradigms and constant learning gain assumptions. We examine the influence of personal experiences, adaptive learning processes, and subjective return expectations on asset pricing. By incorporating the concept of time-varying learning gain, we provide a more realistic portrayal of asset pricing. Empirical analysis reveals a consistent negative correlation between experienced real payout growth and subsequent returns, indicating counter-cyclical behavior. Our findings also support the mean-reversion hypothesis in stock returns, although caution is needed due to some scenarios lacking statistical significance. Theoretical exploration uncovers that higher …

Presidential Economic Approval Rating And The Cross-Section Of Stock Returns, Zilin Chen, Zhi Da, Dashan Huang, Liyao Wang

Research Collection Lee Kong Chian School Of Business

We construct a monthly presidential economic approval rating (PEAR) index from 1981 to 2019, by averaging ratings on the president’s handling of the economy across various national polls. In the cross-section, stocks with high betas to changes in the PEAR index significantly under-perform those with low betas by 1.00% per month in the future, on a risk-adjusted basis. The low PEAR beta premium persists up to one year, and is present in various sub-samples and even in other G7 countries. PEAR beta dynamically reveals a firm’s perceived alignment to the incumbent president’s economic policies and investors seem to misprice such …

Power Asymmetry In Ongoing Business Relationships, Mdarhri Alaoui Saâd, Amine Noureddine

DLSU Business & Economics Review

Firms enter into partnerships to improve their competitive position, create and appropriate superior value, and increase their effectiveness and efficiency. Although balanced relationships (in terms of power and equitable value sharing) between the two partners exist, many researchers argue that these ideal relationships are not the norm and that asymmetry of power and unequal distribution of benefits are a reality of current business-to-business relationships. This study examines how power asymmetry affects the relationship climate in general and partner attitudes and behaviors in particular. Specifically, this study focuses on the sources of power exercised and how these impact value creation appropriation, …

Inequality, Oligarchy, And Dynasty, Ronald U. Mendoza

DLSU Business & Economics Review

Although some scholars frame inequality as a necessary step towards economic growth, this paper highlights its double- edged nature by examining oligarchy and dynasty as elements of inequality in the Philippine context. The best way to

ascertain whether inequality can be advantageous for development is to examine how it shapes the context that it works in. The presence of political dynasties is then evaluated based on their impact on patterns of leadership in the country, whereas business oligarchs are assessed by their influence over the structure of the economy. The paper concludes with a three-point agenda to address the root …

Antecedents Of Investment Decision-Making In Mutual Fund: An Indian Perspective, Som Nath Paul, Rajesh Kumar Upadhyay, -- Ashimagarg

DLSU Business & Economics Review

The growth rate of investments in mutual funds is certainly the most significant phenomenon of present financial markets. Over the years, mutual funds have been a branch whose assets have now become the largest among other financial intermediaries. In this industry, which has focused its attention on marketing, its products have been cut to a wider population. The aim of the present research is to explore the relationship between risk perception and investment decisions in mutual funds. This study is also an attempt to explore the role of expected return in the investment decision of investors in the mutual fund …

Dynamic Connectedness In The Asean’S Equity Markets During The Covid-19 Pandemic, Yuthana Sethapramote, Suthawan Prukumpai, Lawrence B. Dacuycuy

DLSU Business & Economics Review

The COVID-19 pandemic unleashed shocks that triggered severe global economic contraction and spawned sizeable financial market fluctuations. This paper examines the dynamic connectedness between ASEAN stock markets and major global stock markets using the dynamic connectedness framework developed by Diebold and Yilmaz (2009, 2012). Empirical results reveal that ASEAN stock markets and other emerging markets have experienced higher spillovers from global equity markets during the pandemic than in normal times. In addition, the role of ASEAN region spillovers has increased significantly during the COVID-19 outbreak. This study contributes to the existing literature by investigating the extent of dynamic connectedness between …

The Role Of Public Investment In Pandemic Recovery, Aris Zoleta

DLSU Business & Economics Review

The goal of this study is to review the risk associated with increases in sovereign deficits and the role of public investment in pandemic recovery. The estimates of DSGE models show that fiscal authority provides more emphasis on debt to GDP than output and deficits. In addition, the stochastic simulation shows that increases in public investment do not limit the increases in private investment. And both public and private investment exhibit procyclical behaviors in the presence of government spending shock. Lastly, the output is more persistent during episodes of technology shocks than during an increase in government spending. The paper …

Explicating The Influence Of Religion In Forming Corporate Governance: Insights From The Philippines, Leveric Tan Ng, John Paolo Rivera

DLSU Business & Economics Review

Religion plays a role in shaping personal values and directing an organization’s moral filter. It is an avenue to impose social morality that may impact corporate governance. We examined the influence of religion in the formation and development of good corporate governance through ethical leadership in the Philippines – a country that has strong religious culture. In validating scholarly literature on religion and enterprise, we looked into the conception and interpretation of religion and corporate governance through a key informant interview of 30 executive directors from private corporations in the country. We found that corporate governance may arise from religious …

Emotional Intelligence And Conflict Management In Family Firms: Using Systematic Literature Review And Bibliometric Analysis, Kris G. Lobo

DLSU Business & Economics Review

Through systematic literature review and bibliometric analysis, the author assesses the current state of research on the relationship between emotional intelligence (EI) and conflict management (CM) in the family business and recommends avenues for future research. The aim of the study is to map and discover clusters taken from existing literature. In terms of methods, Tranfield et al. (2003) recommended guidelines for conducting a systematic literature review was adopted (i.e., planning, conducting the review, reporting, and dissemination) to capture nuances regarding the conceptual link between EI and CM. With limited publications that highlighted the link between emotional intelligence and conflict …

Incumbent Competition And Private Agenda, Anne Marie Go

DLSU Business & Economics Review

Consider two politicians who decide whether to follow what they believe the electorate wants or choose the option that secures their private gain. Policies are implemented when the politicians reach a unanimous decision. The electorate only rewards a politician when a policy is implemented or when the politician is the only one whose action coincides with the popular decision. The results show that if politicians have good decision-making abilities, sufficiently high payoffs in policy implementation—given moderate private agenda payoffs—push them to implement the popular policy. For very poor decision- making abilities, at sufficiently high policy rewards, politicians vote for the …

The Impact Of Private Equity Investment On The Market Performance Of Listed Companies On The A-Share Market In China, Mengyu Zhan, Sorasart Sukcharoensin

DLSU Business & Economics Review

This study aims to analyze all the Chinese Initial Public Offerings (IPOs) during 2010–2014 and follow their performance for five years. The study particularly tests the competing hypotheses on the role of Chinese private equity. The sample includes 916 firms that operate continuously for five years after IPOs to provide additional evidence on long-term performance. The results using the BHARs method indicate that private equity-backed IPOs tend to have significantly higher initial returns than non-PE-backed ones during three years of listing, supporting the screening and monitoring effect hypothesis in China’s capital market. After three years, the market performance of PE-backed …

When Does Csr Payoff?, John A. Doukas, Rongyao Zhang

Finance Faculty Publications

We investigate whether firms engaging in corporate social responsibility (CSR) can preserve firm value during normal and unprecedented exogenous adverse events. Our evidence shows, in regular times, a negative relation between CSR engagement and firm value, but under adverse economic conditions, CSR protects firm value by decreasing firm risks. We also find that firms with high managerial attributes engage in greater CSR activities that benefit shareholders in both normal and aberrant financial times. Despite the controversy surrounding CSR, our evidence points out that CSR can be viewed as a set of intangible assets that can improve firm value across good …

Income Recovery Of Thai Workers From The Covid-19 Pandemic, Athakrit Thepmongkol, Amornrat Apinunmahakul

DLSU Business & Economics Review

This paper examines how COVID-19 and the resultant lockdown affected Thai workers and how their income has recovered as of the end of 2020. We conducted three phases of telephone surveys to track the income dynamics of Thai workers during the months of May, August, and November 2020. The initial COVID-19 impact on Thai worker income was enormous and very broad. On average, Thai workers’ income fell by 47.03%, and 69.7% suffered such a loss. Over the six months survey period, most Thai workers had just begun to stabilize their income, but only a few were actually able to recover. …

Cash Conversion Cycle And Investment Cash Flow Sensitivity, Ilker Yilmaz

DLSU Business & Economics Review

The purpose of this article is to investigate the effect of firms’ cash conversion cycle on their investments’ sensitivity to cash flows. Using the data of 167 energy companies from 2010 to 2019, we run dynamic panel regressions for the models based on the Euler equation. We employed a generalized method of moments (GMM) as the estimation technique. The analyses revealed two main results. The first is that there is investment cash flow sensitivity for the sample firms indicating the existence of financial constraints. The second is that the cash conversion cycle has a significant positive effect on investment cash …

On The Volatility And Market Inefficiency Of Bitcoin During The Covid-19 Pandemic, Cesar C. Rufino

DLSU Business & Economics Review

The COVID-19 pandemic has been causing unprecedented economic downturn worldwide. As it wreaks havoc on every aspect of global economic activities, stakeholders are wondering how its impact can be quantified to craft viable responses. In the exotic field of cryptocurrencies, prior to the pandemic, everyone was excited about Bitcoin and its multitude of potentials. However, a day after COVID-19 was officially announced by the World Health Organization as a pandemic, the rate of return to Bitcoin dropped by an unheard-of one-day decline of -46.5%, and people started to rethink the prospects of Bitcoin. A day after this steep decline, Bitcoin …

A Sector Prioritization Index With Carbon Emission Intensity Considerations, Krista Danielle S. Yu, Christine Alyssa P. Solis, Viknesh Andiappan

DLSU Business & Economics Review

Globalization has influenced the production processes. The varying degree of regulation on carbon emissions has caused some economies to continue with their production practices which can cause them to miss their commitments to international organizations. Previous literature has developed prioritization and vulnerability indices for sectors that account for the socioeconomic metrics, but they were unable to integrate the environmental effects that sectors generate. This study proposed a sector prioritization index with carbon emission intensity considerations to include the environmental effects based on a

multiregional input-output model. The results show that electricity sectors, services sectors, transport sectors, and energy- intensive industries …

Nexus Of Innovation And Firm-Level Productivity: Evidence From Philippine Manufacturing Firms, Zandro M. Catacutan, Willington O. Onuh

DLSU Business & Economics Review

We examine firms’ propensity to engage in innovation activities and the impact of innovation on firm-level productivity in the Philippine manufacturing firms using comprehensive firm-level data from the 2015 World Bank Enterprise Survey. We use two main specifications: the probit model to assess firms’ propensity to innovate, and endogenous switching regression to evaluate the impact of innovation on productivity and address endogeneity issues. Our empirical findings suggest that the propensity of firms to engage in innovation is low and negatively affected by R&D intensity and capital intensity. We find evidence of beneficial effects for both product and process innovations on …

Generational Shifts In The Perception Of Workforce Commitment, Christopher Donald Raiford

Walden Dissertations and Doctoral Studies

Costs of staffing, training, and retention have always been significant expenses for U.S. corporations. The most recent addition to the workforce, the millennial generation cohort, presents a new set of challenges to leadership. The purpose of this qualitative phenomenological study was to explore the lived experiences related to the perception of commitment of millennial generation participants employed in the U.S. community banking sector. The conceptual framework included generational theory and organizational theory. Data were collected from 11 participants via semi-structed Zoom interviews. Data were analyzed for codes, categories, and themes. Results indicated that (a) millennials value leadership that invests in …

Generational Shifts In The Perception Of Workforce Commitment, Christopher Donald Raiford

Walden Dissertations and Doctoral Studies

Costs of staffing, training, and retention have always been significant expenses for U.S. corporations. The most recent addition to the workforce, the millennial generation cohort, presents a new set of challenges to leadership. The purpose of this qualitative phenomenological study was to explore the lived experiences related to the perception of commitment of millennial generation participants employed in the U.S. community banking sector. The conceptual framework included generational theory and organizational theory. Data were collected from 11 participants via semi-structed Zoom interviews. Data were analyzed for codes, categories, and themes. Results indicated that (a) millennials value leadership that invests in …

Relationship Between Perceived Language Proficiency And Economic Life Satisfaction For Migrants, John Ndunduma

Walden Dissertations and Doctoral Studies

The United States needs migrant workers to fill the labor market gap because baby boomers are retiring from the US workforce in large numbers beginning in 2020. Approximately 2.1 million migrants came from Africa to fill the U.S. labor shortage. Many of these African migrants faced challenges with English language proficiency. There are benefits to the United States involved with increasing the economic wellbeing of migrants, such as reducing remigration, increasing the high-skilled labor force, and increasing cultural diversity. This study used Maslow’s motivational theory to test significant relationships between perceptions of English language proficiency (PELP) and economic life satisfaction …

Assessing The Impact Of Financial Obstacles On Manufacturing Firm's Capacity Utilization: Bayesian Approach, Arab Dahir Hassan, Razim Ozcan

The Indonesian Capital Market Review

This study aims to investigate the relationship between financial obstacles and the capacity utilization of manufacturing firms. This study departs from previous studies in the literature by employing Bayesian linear regression analysis. The results demonstrate that financial constraints have a considerable negative effect on the capacity utilization of manufacturing enterprises, but access to credit lines has a positive effect. The sample consists of 1,494 private manufacturing firms in 31 Europe & Central Asian countries. Financial obstacles were perceived as the major impediment to business operations by 65% of the enterprises in the survey. Furthermore, 52% of enterprises in the sample …

Evaluating The Degree Of Using Islamic Financing Instruments Based On The Concept Of Indebtedness And Its Developmental Importance (A Case Study Of Palestine Islamic Banks 2013-2019), Azmi Awad

Journal of the Arab American University مجلة الجامعة العربية الامريكية للبحوث

This study aimed to shed light on the Islamic financing instruments based on the concept of Indebtedness and indicate the degree of the use of those instruments in the Islamic banks during 2013-2019. This could be achieved by indicating the size and degree of concentration of the use of those instruments and the fairness of their distribution to various economic sectors on the one hand, and explaining the developmental importance of those financing instruments in the economy on the other hand. The researcher used the descriptive analytical approach and the comparative approach. To test the validity of the hypotheses, Pearson …

Lessons Learned: Kevin Stiroh, Mercedes Cardona

Journal of Financial Crises

Kevin Stiroh was head of the Financial Sector Analysis Supervision Group at the Federal Reserve Bank of New York (FRBNY) during the Global Financial Crisis of 2007–2009 (GFC). At the FRBNY, Stiroh was a leader in the design of the “stress test” for the banking system, the Supervisory Capital Assessment Program (SCAP). In the aftermath of the GFC, members of the FRBNY, including Stiroh, drafted a report on systemic risk and bank supervision, laying out lessons learned from the crisis and their recommendations. In February 2021, Stiroh transitioned from the FRBNY to a leadership position with the Federal Reserve Board …

Lessons Learned: Gaurav Vasisht, Sandra Ward

Journal of Financial Crises

Gaurav Vasisht served as assistant counsel, banking and financial services, to the governor of New York during the Global Financial Crisis of 2007–2009 (GFC). In his role, Vasisht set the governor’s agenda for banking and financial policy and oversaw the regulatory and legislative priorities of the state banking and insurance departments. Vasisht played a pivotal role in developing and drafting consumer protection legislation, particularly as it related to housing foreclosures at the time of the crisis. This Lessons Learned is based on an interview with Vasisht that occurred on September 27, 2019.

Lessons Learned: Erik Sirri, Mercedes Cardona

Journal of Financial Crises

Erik Sirri served as director of the Division of Trading and Markets at the US Securities and Exchange Commission (SEC) from 2006 to 2009. In his post, he was responsible for matters relating to the regulation of stock and option exchanges, national securities associations, brokers-dealers, clearing agencies, transfer agents, and credit rating agencies. Before joining the SEC in 1996, he was an assistant professor of finance at the Harvard Business School from 1989 to 1995. Sirri served as the SEC’s chief economist until 1999, before returning to academia. He is currently a professor of finance at Babson College. His research …

Lessons Learned: Veerathai Santiprabhob, Maryann Haggerty

Journal of Financial Crises

Veerathai Santiprabhob was the governor of the Bank of Thailand from 2015 to 2020, a period that included the onset of the COVID-19 pandemic. Earlier in his career, he was an economist at the International Monetary Fund. At the time of the 1997–1998 Asian Financial Crisis, he returned to his home country to take a position at the Ministry of Finance. There, he was involved with the government response to that financial crisis. From 2000 to 2015, he held private-sector finance jobs before going to lead the Bank of Thailand. This Lessons Learned is based on an interview with Santiprabhob …

Lessons Learned: Claudia Sahm, Mercedes Cardona

Journal of Financial Crises

Claudia Sahm was a principal economist in the Division of Research and Statistics of the Board of Governors of the Federal Reserve System from 2007 to 2017 and section chief for the Consumer & Community Development section in the Division of Consumer and Community Affairs from 2017 to 2019. Her work focused on macro forecasting; she also researched household behavior and responses to fiscal stimulus. While at the Fed, she proposed the Sahm Rule, a gauge to call the start of a recession, based on an average of the unemployment rate. The rule is part of Sahm’s work on the …

Lessons Learned: Hiroshi Nakaso, Maryann Haggerty

Journal of Financial Crises

Hiroshi Nakaso joined the Bank of Japan (BOJ) in 1978, rising to deputy governor in 2013. He was instrumental in addressing Japan’s domestic crisis of 1997 and its response to the Global Financial Crisis (GFC). He retired from the bank in 2018 and has since served as chairman of the Daiwa Institute of Research in Tokyo. This Lessons Learned summary is based on a November 2021 interview with Nakaso

Lessons Learned: Deborah Perelmuter, Mercedes Cardona

Journal of Financial Crises

Deborah Perelmuter has spent more than three decades with the Federal Reserve System. In 2008, as senior vice president at the Federal Reserve Bank of New York (FRBNY) and co-head of Capital Markets Analysis and Trading (CMAT) within the Markets Group, she was tasked with setting up the operational details of the Term Securities Lending Facility (TSLF). The TSLF auctioned Treasury securities to primary dealers in exchange for less liquid collateral to provide liquidity to those firms during the Global Financial Crisis of 2007–2009. Perelmuter became senior financial stability adviser within the office of the director in the FRBNY’s Research …

Lessons Learned: Patrick Honohan, Maryann Haggerty

Journal of Financial Crises

Patrick Honohan, an economist, was governor of the Central Bank of Ireland and a member of the Governing Council of the European Central Bank (ECB) from September 2009 until November 2015. Early in his tenure, he led a team that investigated the causes of the Irish banking crisis that broke out in 2008 during the Global Financial Crisis. Resolving the problems of bank failure and over-indebtedness that emerged in that crisis dominated his term of office. In late 2010, Ireland had to request financial assistance from the “troika” of the International Monetary Fund (IMF), the European Commission, and the European …