The Difference That CEOs Make: An Assignment Model Approach

2008 ◽  
Vol 98 (3) ◽  
pp. 642-668 ◽  
Author(s):  
Marko Terviö
Keyword(s):  
Competitive Equilibrium ◽  
Economic Value ◽  
Market Value ◽  
Firm Characteristics ◽  
Managerial Ability ◽  
Market Values ◽  
Assignment Model ◽  
Ceo Pay ◽  
The Difference ◽  
Model Approach

This paper presents an assignment model of CEOs and firms. The distributions of CEO pay levels and firms' market values are analyzed as the competitive equilibrium of a matching market where talents, as well as CEO positions, are scarce. It is shown how the observed joint distribution of CEO pay and market value can then be used to infer the economic value of underlying ability differences. The variation in CEO pay is found to be mostly due to variation in firm characteristics, whereas implied differences in managerial ability are small and make relatively little difference to shareholder value. (JEL G32, M12, M52)

Tracks

2002 ◽  
Vol 17 (4) ◽  
pp. 351-373 ◽  
Author(s):  
Marta Ballester ◽  
Joshua Livnat ◽  
Nishi Sinha
Keyword(s):  
Human Capital ◽  
Market Value ◽  
Capital Asset ◽  
Financial Reports ◽  
Book Value ◽  
Market Values ◽  
Residual Income Valuation ◽  
The Difference ◽  
Selective Disclosure

This study examines the selective disclosure of labor-related costs by U.S. firms and estimates the proportion of these costs that the market values as an investment in human capital. Labor-related costs are separately identified in the financial reports of only a small fraction of all U.S. Compustat firms. Larger firms, firms in industries that are regulated, are more labor-intensive, and have relatively little competition are more likely to report these costs voluntarily. Using a modification of the residual income valuation framework with a sample of firms that consistently disclosed their labor-related costs, the study finds that for these firms about 16 percent of all such costs represent an investment in human capital, and that about a third of this asset depreciates annually. Further, the human capital asset averages about 5 percent of the total market value of the firm and accounts for about 16 percent of the difference between market and book value. The ratio of the human capital asset to market value is found to be positively related to operating uncertainty, industry concentration, and industry-adjusted average compensation paid to employees. The human capital asset is also positively associated with analysts' long-term forecasts of earnings.

scholarly journals EVALUATION OF INVESTMENTS INTO HOUSING RENOVATION

2004 ◽  
Vol 8 (3) ◽  
pp. 177-190 ◽  
Author(s):  
Edmundas Kazimieras Zavadskas ◽  
Artūras Kaklauskas ◽  
Saulius Raslanas
Keyword(s):  
Present State ◽  
Market Value ◽  
Average Price ◽  
Market Values ◽  
Physical Deterioration ◽  
Main Indicator ◽  
New Construction ◽  
The Difference ◽  
The Cost ◽  
Selection Of

The relevant objectives of a housing strategy is to vouch the effective usage of the present housing, maintenance and renovation. The selection of the means for building and residential environment renovation is dictated by the drawbacks of their present state, out‐of‐date designed decisions, natural physical deterioration. While fixing the optimal renovation prices from the aspect of market value increase, the main indicator, limiting the size of investments into building renovation, is the difference between market values after and before renovation. The difference between 1m2 of market value of a building of new construction and the average price of 1m2 of a building of old construction and the cost of renovation means for it will decide the size of the packet of the investments into renovation.

scholarly journals Valuation of Investment Companies in Chile

2020 ◽  
Vol 10 (2) ◽  
pp. 1
Author(s):  
Carlos Maquieira V. ◽  
Salvador Zurita L. ◽  
Valeria García O. ◽  
María Luisa Velasco D.
Keyword(s):  
Pension Fund ◽  
Economic Value ◽  
Market Value ◽  
Insider Ownership ◽  
Book Value ◽  
Investment Companies ◽  
Closed End Funds ◽  
The Difference ◽  
Definition Of ◽  
Productive Assets

Though no clear definition of investment companies exists in Chile, it has been generally understood to refer to companies that have investments in other companies (with or without corporate control) but that do not own productive assets. A question that naturally arises is whether the market value of investment companies is equal to the economic value of the assets in which they invest, and if not, what factors account for the difference. International evidence indicates that for conglomerates a discount on market value would exist and also the situation would be similar (although not identical) to closed-end funds. In this paper we study the existence and explanation of a discount to Chilean investment companies. We find an average discount of 28% in a sample of 22 investment companies studied in the period December 1993 -- December 1999; and the structure of premiums and discounts is explained in an 83% by four variables. The results reported in this study are consistent with the following hypotheses: The discount of the investment companies is positively related to the percentage of insider ownership (insiders can maximise its wealth to the detriment of outsiders). On the other hand, it is negatively related to: the investment in filiated and related companies, the amount invested in investment companies maintained in the portfolio (probably due to an agency problem among shareholders), and the Depurate Book Value of Assets (a regulatory accounting restriction that affects Chilean pension fund investments).

Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Pada Nilai Perusahaan

2011 ◽  
Vol 3 (2) ◽  
pp. 1-19
Author(s):  
Chermian Eforis ◽  
Rosita Suryaningsih
Keyword(s):  
Corporate Social Responsibility ◽  
Annual Report ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Economic Value Added ◽  
Market Value Added ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Simple Regression

This study aims to determine the influence of the level of CSR disclosure in annual report to corporate values that proxies with Economic Value Added (EVA) and Market Value Added (MVA).   The objects of this study are companies that were included in Kompas 100 Edition of the second review in 2010.The chosen model of this research is simple regression which can be defined as a model that used the normal probability plot  for data normality test, DurbinWatson test for autocorrelation, graph plots to test heteroscedasticity, and saw the value of tolerance and VIF for multicollinearity test. Hypothesis is analyzed using simple regression method  The results showed that the level of CSR disclosure contained in the annual report has a significant influence on the EVA. The same results were also found on the MVA, where the level of CSR disclosure contained in the annual report has a significant influence on the MVA. Key words: Corporate Social Responsibility, Economic Value Added, Market Value Added

Harvest Field Sizing as a Technique to Remove Undersize French Prunes

HortScience ◽  
1998 ◽  
Vol 33 (3) ◽  
pp. 452a-452
Author(s):  
Richard Buchner ◽  
Seeley Mudd ◽  
Bruce Carroll ◽  
Mark Gilles
Keyword(s):  
Sugar Content ◽  
Economic Value ◽  
Market Value ◽  
Dry Weight ◽  
Soluble Solids ◽  
Field Size ◽  
Test Machine ◽  
Test Field ◽  
Marginal Value ◽  
High Sugar Content

Overall profitability is a major goal in successful prune production and a major component in any prune management system. Large prune crops in 1996 and 1997 have stimulated considerable interest in undersize fruit. Undersize prunes currently have marginal value and may represent a net loss because of costs to haul, dry, and to market order payments on low value prunes. One technique to control delivery size is to field size at harvest. Field sizing involves installing size-sorting devices on harvesters, which allow small prunes to fall out while valuable fruit is collected. Field sizing is considered a “risky” strategy because of the potential to remove prunes with economic value. During the 1997 harvest, 21 infield harvest sizing evaluations were made in prune orchards throughout Tehama county. The first evaluation occurred on 12 Aug. 1997, at the start of prune harvest. The final evaluation was done on 5 Sept. 1997, at the tail end of harvest. The objective was to sample throughout the harvest period to test field sizing under various sugar, size, and fruit pressure scenarios. The test machine was 1-inch bar sizer. Of the 21 sample dates, undersize fruit was clearly not marketable in 20 of the 21 samples. Discarded fruit averaged 133 dry count per pound. Only one sample out of 21 may have had market value at 86 dry count per pound. Although small in size, these prunes had very high sugar content contributing to their dry weight. In this evaluation, a 1-inch bar sizer did a good job of separating fruit with and without market value under the 1997 price schedule. As harvest date becomes later and soluble solids increase, the chances of sorting out marketable prunes also increases.

scholarly journals Imitated Whole Tree Harvesting Show Negligible Effect on Economic Value of Spruce Stands

Forests ◽  
2021 ◽  
Vol 12 (7) ◽  
pp. 841
Author(s):  
Iveta Desaine ◽  
Annija Kārkliņa ◽  
Roberts Matisons ◽  
Anna Pastare ◽  
Andis Adamovičs ◽  
...  
Keyword(s):  
Norway Spruce ◽  
Economic Value ◽  
Forest Types ◽  
Spruce Stands ◽  
The Difference ◽  
Growing Conditions ◽  
Whole Tree Harvesting ◽  
Whole Tree ◽  
Tree Harvesting

The increased removal of forest-derived biomass with whole-tree harvesting (WTH) has raised concerns about the long-term productivity and sustainability of forest ecosystems. If true, this effect needs to be factored in the assessment of long-term feasibility to implement such a drastic forest management measure. Therefore, the economic performance of five experimental plantations in three different forest types, where in 1971 simulated WTH event occurred, was compared with pure, planted and conventionally managed (CH) Norway spruce stands of similar age and growing conditions. Potential incomes of CH and WTH stands were based on timber prices for period 2014–2020. However, regarding the economics of root and stump biomass utilization, they were not included in the estimates. In any given price level, the difference of internal rate of return between the forest types and selected managements were from 2.5% to 6.2%. Therefore, Norway spruce stands demonstrate good potential of independence regardless of stump removal at the previous rotation.

Firm Characteristics, Relative Efficiency, and Equity Returns

2009 ◽  
Vol 44 (1) ◽  
pp. 213-236 ◽  
Author(s):  
Giao X. Nguyen ◽  
Peggy E. Swanson
Keyword(s):  
Explanatory Power ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Equity Returns ◽  
Firm Characteristics ◽  
Stochastic Frontier Approach ◽  
Cross Sectional ◽  
Firm Efficiency ◽  
The Difference ◽  
Sectional Analysis

AbstractThis study uses a stochastic frontier approach to evaluate firm efficiency. The resulting efficiency score, based on firm characteristics, is the input for performance evaluation. The portfolio composed of highly efficient firms significantly underperforms the portfolio composed of inefficient firms even after adjustment for firm characteristics and risk factors, suggesting a required premium for the inefficient firms. The difference in performance between the two portfolios remains for at least five years after the portfolio formation year. In addition, firm efficiency exhibits significant explanatory power for average equity returns in cross-sectional analysis.

Role of mall attractiveness in shaping fashion shopping orientation of apparel shoppers: a segmentation approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ajay Kumar ◽  
Anil Kumar Kashyap
Keyword(s):  
Cluster Analysis ◽  
Design Methodology ◽  
Economic Value ◽  
Variety Seeking ◽  
Content Type ◽  
Shopping Orientation ◽  
Intercept Survey ◽  
Segmentation Approach ◽  
The Difference

Purpose The purpose of this study is to identify distinct segments of apparel shoppers based on their fashion shopping orientation. The difference among the segments based on mall attractive dimension is also examined. Design/methodology/approach The data were collected through mall intercept survey from the mall shoppers. Samples of 375 respondents are used for data analysis purpose. Exploratory factor analysis is used to extract the factors of fashion shopping orientation and mall attractive dimensions while K-means cluster analysis is applied to identify the segments. Findings This study resulted in three factors of fashion orientation of apparel shoppers, i.e. fashion involvement, variety seeking and economic value, and four factors of mall attractive dimensions: convenience, entertainment, atmosphere and architecture design. Based on these factors, this study came out with three distinct segments of fashion shoppers: pragmatic shoppers, variety seeking shoppers and highly fashioned shoppers. These three segments are attracted towards the mall dimension differently. Originality/value This paper presents the three distinct profiles of fashion shoppers based on their fashion shopping orientation and mall attractive dimensions. The findings of this study may help retailers and mall developers to target mall visitors appropriately.

Effects of geographical and technological diversification on the development of spatially disaggregated wind and solar power market values  

2021 ◽  
Author(s):  
Manuel Eising ◽  
Hannes Hobbie ◽  
Dominik Möst
Keyword(s):  
Wind Energy ◽  
Solar Power ◽  
Negative Relationship ◽  
Market Value ◽  
Power Market ◽  
Offshore Wind ◽  
Onshore Wind ◽  
Market Values ◽  
Technological Diversification ◽  
Geographical Diversification

<p><strong>Keywords</strong>: Market value, Technological diversification, Geographical diversification, Spatial value factor distribution</p><p>Ambitious climate and energy targets require environmentally compatible energy generation with a high utilisation of renewable energy sources. However, due to the intermittent appearance of wind and PV feed-in, variable renewable energy (VRE) reveals significantly lower market values than conventional dispatchable power (Joskow, 2011). Additionally, with higher VRE shares a significant market value drop of wind and solar power has been observed in recent years as a result of the merit order effect (Hirth, 2013). Moreover, results by Engelhorn and Müsgens (2018) and Becker and Thrän (2018) have indicated regional disparities in empirical market values for Germany.  This poses interest on what exactly drives and how to quantify the development and spatial distribution of VRE market values.</p><p>Against this background, an electricity market model is applied to trace the development of spatial market values based on model-endogenous electricity prices. A special feature of the model is the inclusion of highly regionally disaggregated weather data which allows to investigate effects of different geographical and technological VRE diversification strategies in Germany until 2035 (Eising et al., 2020). The results of this research are threefold:</p><ul><li>Technological diversity: results show a significant decrease in PV and onshore wind value factors as VRE shares increase. Replacing onshore wind energy by offshore wind energy reduces the volatility and counteracts the value drop of onshore wind, offshore wind and PV.</li> <li>Geographical diversity: results indicate that geographical diversification does not necessarily mitigate decreasing VRE value factors. Under specific circumstances, a higher concentration at sites with lower full-load hours and corresponding higher feed-in volatility potentially mitigates positive effects from more spatially distributed generation.</li> <li>Spatial distribution of value factors: for all mitigation strategies and for wind and PV the spatial value factor distribution shows future increases in regional disparities. However, regional value factor disparities are most distinct in case of onshore wind. The analysis reveals two significant drivers: first, a negative relationship between the regional wind capacity density and their regional value factors can be observed. Second, results indicate a negative relationship between site-specific wind feed-in volatility and the value factor.</li> </ul><p> Summarising, the analysis highlights the importance of considering spatial market values in efficiently designing future electricity markets.  </p><p> </p><p><strong>References</strong></p><p>Becker, R., Thrän, D., 2018. Optimal Siting of Wind Farms in Wind Energy Dominated Power Systems. Energies 11, 978. https://doi.org/10.3390/en11040978</p><p>Eising, M., Hobbie, H., Möst, D., 2020. Future wind and solar power market values in Germany — Evidence of spatial and technological dependencies? Energy Econ. 86, 104638. https://doi.org/10.1016/j.eneco.2019.104638</p><p>Engelhorn, T., Müsgens, F., 2018. How to estimate wind-turbine infeed with incomplete stock data: A general framework with an application to turbine-specific market values in Germany. Energy Econ. 72, 542–557. https://doi.org/10.1016/j.eneco.2018.04.022</p><p>Hirth, L., 2013. The market value of variable renewables: The effect of solar wind power variability on their relative price. Energy Econ. 38, 218–236.</p><p>Joskow, P.L., 2011. Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies. Am. Econ. Rev. 101, 238–241.</p>

Linkage between Economic Value Added and Market Value: An Analysis

2000 ◽  
Vol 25 (3) ◽  
pp. 23-36 ◽  
Author(s):  
Ashok Banerjee
Keyword(s):  
New York ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Shareholder Wealth ◽  
Indian Context ◽  
The Us ◽  
Generating Capacity ◽  
The Cost ◽  
Future Growth

Maximizing shareholder value has become the new corporate paradigm. Corporations in the US have started disclosing EVA information from the beginning of 90s as a measure of corporate performance. It is believed that market value of a firm (hence shareholder wealth) would increase with the increase in EVA. Various studies done in the US also confirm this belief. EVA (a term coined and registered by Stern Stewart & Co. New York) is a residual income that subtracts the cost of capital from the operating profits generated by a business. The present study makes an at tempt to find the relevance of Stewart's claim that market value of the firm is largely driven by its EVA generating capacity in the Indian context. Based on a sample of 200 firms over a period of five years, the study shows that market value of a firm can be well predicted by estimated future EVA streams. The study has also found that market value of most of the firms in the sample is explained more by current operational value than future growth value of firms.

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