Under Pressure: The Causal Effect of Financial Analyst Coverage on Long-Term Capital Investments

2015 ◽  
Author(s):  
Mark R DesJardine
Keyword(s):  
Causal Effect ◽  
Capital Investments ◽  
Financial Analyst ◽  
Analyst Coverage

scholarly journals The Pice Effects of Competition from Parallel Imports and Therapeutic Alternatives: Using Dynamic Models to Estimate the Causal Effect on the Extensive and Intensive Margins

2021 ◽  
Author(s):  
David Granlund
Keyword(s):  
Dynamic Models ◽  
Causal Effect ◽  
The Other ◽  
Causal Effects ◽  
Parallel Imports ◽  
Extensive And Intensive Margins ◽  
Price Effects ◽  
Short And Long Term ◽  
Therapeutic Alternatives

AbstractThis paper studies responses to competition with the use of dynamic models that distinguish between short- and long-term price effects. The dynamic models also allow lagged numbers of competitors to become valid and strong instruments for the current numbers, which enables studying the causal effects using flexible specifications. A first parallel trader is found to decrease prices of exchangeable products by 7% in the long term. On the other hand, prices do not respond to the first competitor that sells therapeutic alternatives; but competition from four or more competitors that sell on-patent therapeutic alternatives decreases prices by about 10% in the long term.

The value relevance of capital expenditures and the business cycle

2018 ◽  
Vol 35 (3) ◽  
pp. 386-406 ◽  
Author(s):  
Sungsoo Kim ◽  
Brandon byunghwan Lee
Keyword(s):  
Business Cycles ◽  
Stock Returns ◽  
Value Relevance ◽  
Financial Data ◽  
Capital Expenditures ◽  
Capital Investments ◽  
Content Type ◽  
Market Participants ◽  
Business Conditions

Purpose This paper aims to clarify the relationship between corporate capital investments and business cycles. Specifically, a major purpose of this paper is to investigate whether there are inherent differences in corporate investment patterns and whether the stock market exhibits different reactions to the value relevance of capital expenditures across different business conditions. Design/methodology/approach The authors use pooled ordinary least square regressions with archival stock price data and financial data from CRSP and Compustat. The authors regress buy and hold returns on the main test variables and control variables that are identified to be related to the investment literature. Findings This paper provides empirical evidence that US firms’ capital expenditures are more value relevant to capital market participants during expansionary business cycles and, conversely, less value relevant during contractionary business cycles. This evidence validates previous literature that has found the information content of capital expenditures to be uncertain and cyclical in nature. Research limitations/implications The main limitation of this paper, as with other work dealing with stock returns and archived financial data, is that the authors try to match stock returns with contemporaneous financial data in an association study context. The precise mapping in this methodology is always challenging and has been questioned in the literature. Practical implications This paper has various implications for capital market participants. Capital expenditures are good news for investors, but they will make a better investment when firms make capital investments during an expansionary period. Creditors deciding whether to extend credit to firms would benefit from more accurate information on the viability of long-term investment. The results also suggest to creditors that an excessive number of loans during the contractionary period may be suboptimal because firms’ returns on capital investment are smaller in that period than in the expansionary period. Social implications Given the valuation of implications of long-term capital investments across different business conditions, this paper sheds light on asset allocations for mutual funds, institutional investors who are entrusted with investors’ investments including retirement funds. Originality/value This paper fulfils an identified need to study how capital investments are valued differently across different business conditions.

BUSINESS-LEVEL STRATEGIC MANAGEMENT IN CROATIAN TOURISM

2003 ◽  
Vol 9 (2) ◽  
pp. 65-78
Author(s):  
Vinka Cetinski ◽  
Slobodan Ivanović
Keyword(s):  
Strategic Management ◽  
Management System ◽  
Integrated Approach ◽  
Positive Development ◽  
Capital Investments ◽  
Strategic Decisions ◽  
Negative Effects ◽  
Tourist Destinations ◽  
Management Concept

There are few activities so susceptible to the impacts of the macro environment as tourism. In conditions of growing uncertainty, the importance of strategic management is steadily increasing. By studying the environment, by anticipating the future development and implication of trends on enterprises, and by developing appropriate strategies at a number of levels, strategic management seeks to actively influence the increase o f competitive advantages o f both the tourist destinations and tourist enterprises. The term “strategic management” implies a set of management decisions and actions that determine the long-term operations o f enterprises within the management system of tourism: guiding the enterprise by anticipating crucial environmental impacts and internal factors. This management concept is based on the assumption that making properly oriented strategic decisions minimizes the negative effects of the environment and creates strategic advantages for enterprises that can be capitalised only in the medium and long term (Čizmar S. (2001) Strateško upravljanje u funkciji učinkovitog razvoja turističkog ugostiteljstva u Hrvatskoj, doctoral dissertation, University o f Zagreb, Faculty of Economics, Zagreb, p. 3). It represents an integrated approach to strategic management that is the most acceptable for the development of Croatian tourism, as long-term positive results, in both market and financial terms, can be achieved by enterprises within the tourism management system of Croatia only by applying an integrated approach to strategic management, by horizontally and vertically linking the elements of all subsystems of the entire management system and by creating partnering relationships. The Croatian model of strategic management should involve the economic optimisation of all subsystems and systems by establishing efficiency not only across all subsystem elements, but through the system as a whole as well. The level of growth in entrepreneurship and innovations will determine the intensity and speed of positive development changes. These changes will also depend on establishing management responsibilities throughout all segments and managements levels of all subsystems, as well as tourism as an integral system. This paper deals with the issues of strategic management at a micro level with special emphasis on the development of responsibility for managing performance and capital investments.

scholarly journals Variation in the Continuity of Land-Use Patterns through the First Millennium AD in Lowland Britain

2015 ◽  
Vol 11 (1) ◽  
pp. 135-154
Author(s):  
Stephen Rippon ◽  
Ralph Fyfe
Keyword(s):  
Land Use ◽  
Roman Empire ◽  
Causal Effect ◽  
Anglo Saxon ◽  
Land Use Patterns ◽  
Profound Change ◽  
Use Patterns ◽  
Land Use Types ◽  
First Millennium

AbstractThis paper explores the contribution that palaeoenvironmental evidence, and in particular palynology, is making to our understanding of landscape evolution in Britain during the 1st millenniumAD. This was a period of profound social and economic change including a series of invasions, some associated with a mass folk migration. Archaeologists and historians continue to debate the significance of these events, and palaeoenvironmental evidence is now starting to provide an additional perspective. Key to this has been obtaining pollen sequences, although there remains a need for more evidence from lowland areas, alongside higher resolution sampling and improved dating. It is suggested that although the 1st millenniumADsaw some significant long-term shifts in climate, these are unlikely to have had a significant causal effect on landscape change in lowland areas (both in areas with and without significant Anglo-Saxon immigration). The analysis of pollen data from across Britain shows very marked regional variations in the major land-use types (arable, woodland, improved pasture, and unimproved pasture) throughout the Roman and Early Medieval periods. While Britain ceasing to be part of the Roman empire appears to have led to a decline in the intensity of agriculture, it was the ‘long 8th c.’ (the later 7th to early 9th c.) that saw a more profound change, with a period of investment, innovation, and intensification, including an expansion in arable cultivation.

scholarly journals Stochastic Optimization for Long Term Capital Structures, Systems, and Components Refurbishment and Replacement

2020 ◽  
Author(s):  
Congjian Wang ◽  
Diego Mandelli ◽  
Shawn St Germain ◽  
Curtis Smith ◽  
David Morton ◽  
...  
Keyword(s):  
Stochastic Optimization ◽  
Nuclear Power ◽  
Power Plants ◽  
Capital Investments ◽  
Priority List ◽  
Multi Stage ◽  
Plant Operations ◽  
Economic Constraints ◽  
Returns On Investment

Abstract As commercial nuclear power plants (NPPs) pursue extended plant operations in the form of Second License Renewals (SLRs), opportunities exist for these plants to provide capital investments to ensure long-term, safe, and economic performance. Several utilities have already announced their intention to pursue extended operations for one or more of their NPPs via SLR2. The goal of this research is to develop a risk-informed approach to evaluate and prioritize plant capital investments made in preparation for, and during the period of, extended plant operations to support decisions in NPP operations. In order to prioritize project selection via a risk-informed approach we developed a single decision-making tool that integrates safety/reliability, cost, and stochastic optimization models to provide users with data analysis capabilities to more cost effectively manage plant assets. Both stochastic analysis methods — such as Monte Carlo-based sampling strategies — and multi-stage stochastic optimization strategies are employed to provide priority lists to decision-makers in support of risk-informed decisions. We applied the proposed method to a trial application of projected replacement/refurbishment expenditures for plant capital assets (i.e., structures, systems, and components [SSCs]). The objective is to optimize the SSC replacement/refurbishment schedule in terms of economic constraints, data uncertainties, and SSC reliability data, as well to generate a priority list for maximizing returns on investment.

scholarly journals Analyst Coverage And Audit Efforts: Empirical Approach To Audit Hours

2015 ◽  
Vol 31 (3) ◽  
pp. 795 ◽  
Author(s):  
Hong Min Chun ◽  
Chang Seop Rhee
Keyword(s):  
Measurement Error ◽  
Global Financial Crisis ◽  
Positive Relation ◽  
Financial Analyst ◽  
Analyst Following ◽  
Analyst Coverage ◽  
Audit Failure ◽  
Audit Market ◽  
Audit Fee ◽  
Unique Dataset

This study investigates the effect of financial analyst coverage on audit efforts by examining the association between the number of analyst followings and audit hours. Existing literatures report that there are inconsistent results between analyst coverage and audit efforts, and most studies used audit fee as a proxy for audit efforts. However, audit fee may cause measurement error. We consider that audit hour is a better proxy for measuring audit efforts than audit fee because practically auditors are less likely to charge extra audit fee for their additional efforts in competitive audit market. Also, after audit engagement contract, the amount of audit fee is almost fixed. Thus, it cannot reflect variable auditors decision whether inputting additional efforts or not during audit service. Intuitively, audit hours are more accurate measure of audit efforts as long as it indicates how much hours auditors work. For the above reasons, we use unique dataset of audit hours in Korea. We find that analyst coverage is positively associated with audit hour. This means auditors make more efforts on their audit service in case of greater analyst following, and they crucially consider reputational damage from audit failure when they provide audit services to their clients with great analyst following. Next, we still observe positive relation in both pre and post global financial crisis periods. Lastly, we find that BIG4 auditors are more concerned about reputational loss than Non-Big4 in case of greater analyst following.

Redefining Silk Roads

2020 ◽  
pp. 185-198
Author(s):  
Jildyz Urbaeva
Keyword(s):  
International Development ◽  
Collective Efficacy ◽  
Social Entrepreneurship ◽  
Capital Investments ◽  
Development Organizations ◽  
Central Asian ◽  
Central Asian Countries ◽  
Psychosocial Benefits ◽  
Improve Access

In this chapter on “Redefining Silk Roads: Social Businesses and Crafts as Approaches for Improving Women’s Situations in Central Asia,” the authors show how social entrepreneurship is only starting to evolve in Central Asian countries. Women experience multiple barriers to starting and carrying out social businesses successfully: a lack of capital, underdeveloped policies, and limited access to markets within the region and beyond. Despite these significant challenges, there are factors suggesting strong potential for success in the long term, such as local expertise and skills, access to training, and the support of international development organizations. Projects that have been implemented previously suggest the need for intermediary organizations that can increase access to global markets, advocate on behalf of social businesses, and improve access to capital investments. Improving social entrepreneurship models in the region will have not only financial and social gains for women and their communities; importantly, these models can provide psychosocial benefits as well, such as increasing women’s autonomy within the household and their ability for collective efficacy.

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