Open Access. Powered by Scholars. Published by Universities.®

Finance and Financial Management Commons™

Open Access. Powered by Scholars. Published by Universities.®

2009

Discipline
Institution
Keyword
Publication
Publication Type
File Type

Articles 181 - 195 of 195

Full-Text Articles in Finance and Financial Management

Does Vc Reputation Affect Function Of Lockup Agreement?, Kejia He Jan 2009

Does Vc Reputation Affect Function Of Lockup Agreement?, Kejia He

Dissertations and Theses Collection (Open Access)

Instead of perceiving lockup agreement and VC-backing as exogenous variables, this paper employs the VC-backed IPO data and takes a closer examination on the specific effect of VC reputation, which impacts the choice of lockup length and return and volume abnormality around lockup expiry. Contrary to the commitment hypothesis proposed by previous literatures, the data suggests that less VC-backed companies tend to choose a longer lockup agreement as a compensation device and those companies backed by more reputable VC experience less negative abnormal return and less abnormal volume around lockup expiry.

Go to article

Illiquidity, Stock Return And Corporate Capital Structure: Evidence From Seasoned Equity Offering, Zhao Yu Jan 2009

Illiquidity, Stock Return And Corporate Capital Structure: Evidence From Seasoned Equity Offering, Zhao Yu

Dissertations and Theses Collection (Open Access)

The post-issue underperformance of seasoned equity offering (SEO) is generally explained by asymmetric information and deteriorating operating performance. We complement these traditional explanations with a new parameter, the liquidity, which results from the change of capital structure due to equity offering. The new issuing of equity lowers the debt to asset ratio, lowers the information asymmetry, thus increasing stock liquidity, which is in accordance with the hypotheses presented by Kyle(1985)'s model; Evidence that stocks become more liquid after SEO, thus lower the expected return, resulting to underperformance, combined with the high stock illiquidity before SEO, which coincides the high return, …

Go to article

The Effect Of Concentrated Institutional Portfolio On Stock Returns, Hao Li Zhang Jan 2009

The Effect Of Concentrated Institutional Portfolio On Stock Returns, Hao Li Zhang

Dissertations and Theses Collection (Open Access)

This paper examines whether stock return is related to the extent of portfolio concentration on the part of institutional fund managers. There is evidence that large firms are preferred for both concentrated and well-diversified funds. Also, a trading strategy based on concentrated ownership generates positive abnormal return. This implies that informational effect (implied in an increase in concentrated capital) has significant impacts and predictability on returns. Meanwhile, we do not find diversified ownership has predictability on future stock returns.

Go to article

Asian Corporate Governance Or Corporate Governance In Asia?, Shaomin Li, Anil Nair Jan 2009

Asian Corporate Governance Or Corporate Governance In Asia?, Shaomin Li, Anil Nair

Management Faculty Publications

Corporate governance has become an important issue for Chinese and Indian firms as they increasingly interact with regulators and investors from developed markets. For instance, tapping into global capital markets to raise funds to finance their domestic and international growth requires firms from China and India to demonstrate strong corporate governance credentials, so that investors do not discount their stock (LaPorta, Lopez-de-Silanes, Shleifer, & Vishny, 2000). The swift action of Chinese and Indian authorities in response to recent corporate scandals – such as the one at Satyam Computers – reveals that even governments in emerging countries such as China and …

Go to article

Mills B. Lane, Jr. And Enterprise In A New South, Randall L. Patton Jan 2009

Mills B. Lane, Jr. And Enterprise In A New South, Randall L. Patton

Faculty Articles

For a century, Citizens & Southern Bank was a fixture in Georgia. In 1991, the C&S brand name disappeared in a merger with North Carolina National Bank. This was one of the bittersweet consequences of the slow, confusing swirl of bank deregulation after 1970, when institutions such as C&S simply disappeared, swallowed by the "winners" in the new competitive environment of interstate banking in the 1980s and 1990s. Even earlier, however, the Lane family had ceased to control the bank started by Mills Lane, Sr. in 1891. Mills B. Lane, Jr. was the last member of the Lane family to …

Go to article

P/E Changes: Some New Results, Thomas S. Zorn, Donna M. Dudney, Benjamas Jirasakuldech Jan 2009

P/E Changes: Some New Results, Thomas S. Zorn, Donna M. Dudney, Benjamas Jirasakuldech

Department of Finance: Faculty Publications

The P/E ratio is often used as a metric to compare individual stocks and the market as a whole relative to historical valuations. We examine the factors that affect changes in the inverse of the P/E ratio (E/P) over time in the broad market (S&P 500 Index). Our model includes variables that measure investor beliefs and changes in tax rates and shows that these variables are important factors affecting the P/E ratio. We extend prior work by correcting for the presence of a long-run relation between variables included in the model. As frequently conjectured, changes in the P/E ratio have …

Go to article

Evaluating Earnings Management With Derivatives And The Use Of Accounting Accruals: A Quasi Experimental Approach, Margot S. Geagon Jan 2009

Evaluating Earnings Management With Derivatives And The Use Of Accounting Accruals: A Quasi Experimental Approach, Margot S. Geagon

Walden Dissertations and Doctoral Studies

Most companies listed on the S&P 500 index have reported smoothed earnings since the 1990s inspiring questions from regulators about the accuracy of financial statements. In 1998, the Financial Accounting Standards Board issued SFAS No. 133 (Accounting for Derivative Instruments and Hedging Activities) to establish accounting and reporting standards for derivative instruments. In 2002, the Sarbanes-Oxley Act (SOX) was issued to eradicate earnings management activities and improve transparency in financial reporting. Although many studies have been conducted to evaluate changes in reporting requirements, much less is known about the effectiveness of these regulations on earning smoothing with discretionary accruals (DA) …

Go to article

Optimal Defaults And Active Decisions, Gabriel D. Carroll, James J. Choi, David Laibson, Brigitte C. Madrian, Andrew Metrick Jan 2009

Optimal Defaults And Active Decisions, Gabriel D. Carroll, James J. Choi, David Laibson, Brigitte C. Madrian, Andrew Metrick

Faculty Publications

Defaults often have a large influence on consumer decisions. We identify an overlooked but practical alternative to defaults: requiring individuals to make an explicit choice for themselves. We study such “active decisions” in the context of 401(k) saving. We and that compelling new hires to make active decisions about 401(k) enrollment raises the initial fraction that enroll by 28 percentage points relative to a standard opt-in enrollment procedure, producing a savings distribution three months after hire that would take 30 months to achieve under standard enrollment. We also present a model of 401(k) enrollment and derive conditions under which the …

Go to article

Determinants Of Vertical Integration: Financial Development And Contracting Costs, Daron Acemoglu, Simon Johnson, Todd Mitton Jan 2009

Determinants Of Vertical Integration: Financial Development And Contracting Costs, Daron Acemoglu, Simon Johnson, Todd Mitton

Faculty Publications

We study the determinants of vertical integration in a new data set of over 750,000 firms from 93 countries. We present a number of theoretical predictions on the interactions between financial development, contracting costs, and the extent of vertical integration. Consistent with these predictions, contracting costs and financial development by themselves appear to have no effect on vertical integration. However, we find greater vertical integration in countries that have both greater contracting costs and greater financial development.We also show that countries with greater contracting costs are more vertically integrated in more capital-intensive industries.

Go to article

Expected Idiosyncratic Skewness, Brian H. Boyer, Todd Mitton, Keith Vorkink Jan 2009

Expected Idiosyncratic Skewness, Brian H. Boyer, Todd Mitton, Keith Vorkink

Faculty Publications

We test the prediction of recent theories that stocks with high idiosyncratic skewness should have low expected returns. Because lagged skewness alone does not adequately forecast skewness, we estimate a cross-sectional model of expected skewness that uses additional predictive variables. Consistent with recent theories, we find that expected idiosyncratic skewness and returns are negatively correlated. Specifically, the Fama-French alpha of a low-expected-skewness quintile exceeds the alpha of a high-expected-skewness quintile by 1.00% per month. Furthermore, the coefficients on expected skewness in Fama-MacBeth cross-sectional regressions are negative and significant. In addition, we find that expected skewness helps explain the phenomenon that …

Go to article

Reducing The Complexity Costs Of 401(K) Participation Through Quick Enrollment, James J. Choi, David Laibson, Brigitte C. Madrian Jan 2009

Reducing The Complexity Costs Of 401(K) Participation Through Quick Enrollment, James J. Choi, David Laibson, Brigitte C. Madrian

Faculty Publications

Previous research has shown that 401(k) participation increases dramatically when companies switch from an opt-in to an opt-out (or automatic) enrollment regime (Madrian and Shea 2001; Choi et al. 2004; Choi et al. 2006). Although automatic enrollment has been widely touted as an effective tool for encouraging saving, it has its detractors. Some libertarians dislike automatic enrollment because they view it as coercing individuals into the company-chosen default contribution rate and asset allocation. Indeed, the vast majority of automatically enrolled employees passively accept all of the defaults in the short run, and many remain at those defaults for years (Choi …

Go to article

The Functional Specification Of The Wageexperience Relationship And Male Wage Inequality In The Philippines: A Decomposition Analysis, Lawrence B. Dacuycuy Jan 2009

The Functional Specification Of The Wageexperience Relationship And Male Wage Inequality In The Philippines: A Decomposition Analysis, Lawrence B. Dacuycuy

DLSU Business & Economics Review

This study analyzed the factors that have contributed to the increase in wage inequality among male workers in the Philippines. Using the Fields (2003) framework as a decomposition platform, the validity of the usual parametric specification of the wage-experience relationship to ascertain the effects of functional misspecification on wage decomposition estimates was investigated. The study found that the quadratic specification of the nonlinear relationship is inadequate, thereby favoring the use of the semiparametric partially linear model, which does not impose any functional assumption on the said relationship.

Go to article

An Evaluation Of Financial And Non-Financial Environmental Disclosures Of Ten Publicly-Listed Mining Companies In The Philippines, Nimpha M. Aquino Jan 2009

An Evaluation Of Financial And Non-Financial Environmental Disclosures Of Ten Publicly-Listed Mining Companies In The Philippines, Nimpha M. Aquino

DLSU Business & Economics Review

This study determined the environmental disclosure practices of 10 mining companies in the Philippines by examining the nature and extent of disclosures in the financial and non-financial sections of their 2006 corporate annual reports. It was found out that there was no uniformity in the environmental disclosures of the 10 mining companies. It was also discovered that there was no existing environmental reporting standards as far as environmental disclosure is concerned. The study provided recommendations to the standard-setting council to improve the firms’ environmental disclosure compliance with a discussion regarding the benefits these recommendations might offer.

Go to article

Stock Diversification And Integer Programming, Emilina R. Sarreal Jan 2009

Stock Diversification And Integer Programming, Emilina R. Sarreal

DLSU Business & Economics Review

This study shows how investors can maximize returns by preparing and monitoring their own stock portfolio by using an integer programming model with an algorithm that can be computed in spreadsheet and linear programming software. Further, the study emphasizes the importance of diversifying stockholdings to reap optimal returns and minimum volatility/risk. It also suggests employing behavioral portfolio theory where goals/aspirations of investors are combined with their reward-to-volatility profile.

Go to article

Risk Management In The Indian Petrochemical Industry (With Special Reference To Haldia Petrochemicals Ltd.), Tamma K. Reddy, Subhayan Basu Jan 2009

Risk Management In The Indian Petrochemical Industry (With Special Reference To Haldia Petrochemicals Ltd.), Tamma K. Reddy, Subhayan Basu

DLSU Business & Economics Review

This study focuses on the identification and acceptance or offsetting of the risks threatening the profitability and existence of any petrochemical organization. It deals with the foreign exchange risk management policy of Haldia Petrochemicals Ltd. and how it could be implemented in the risk minimization or the profit maximization of the company. It applies theories about risks and offers insights and recommendations to the company regarding their management of risk exposures.

Go to article

First Prev