scholarly journals New Thinking on "Shareholder Primacy"

2018 ◽  
Author(s):  
Lynn Stout
Keyword(s):  
Stock Price ◽  
Shareholder Wealth ◽  
Corporate Law ◽  
Share Price ◽  
Corporate Structure ◽  
Shareholder Primacy ◽  
Public Companies ◽  
Public Firms ◽  
Wide Range ◽  
New Thinking

2 Accounting, Economics, and Law (2012)By the beginning of the twenty-first century, many observers had come to believe that U.S. corporate law should, and does, embrace a "shareholder primacy" rule that requires corporate directors to maximize shareholder wealth as measured by share price. This Essay argues that such a view is mistaken.As a positive matter, U.S. corporate law and practice does not require directors to maximize "shareholder value" but instead grants them a wide range of discretion, constrained only at the margin by market forces, to sacrifice shareholder wealth in order to benefit other constituencies and the firm itself. Although recent "reforms" designed to promote greater shareholder power have begun to limit this discretion, U.S. corporate governance remains director-centric.As a normative matter, several lines of theory have emerged in modem corporate scholarship that independently explain why director governance of public firms is desirable from shareholders' own perspective. These theories suggest that if we want to protect the interests of shareholders as a class over time-rather than the interest of a single shareholder in today's stock price-conventional shareholder primacy thinking is counterproductive. The Essay reviews five of these lines of theory and explores why each gives us reason to believe that shareholder primacy rules in public companies in fact disadvantage shareholders. It concludes that shareholder primacy thinking in its conventional form is on the brink of intellectual collapse, and will be replaced by more sophisticated and nuanced theories of corporate structure and purpose.

The economic consequences of voluntary environmental reporting on shareholder wealth

2006 ◽  
Vol 3 (2) ◽  
pp. 1 ◽  
Author(s):  
Ruslaina Yusoff ◽  
Shariful Amran Abd Rahman ◽  
Wan Nazihah Wan Mohamed
Keyword(s):  
Abnormal Return ◽  
Listed Companies ◽  
Shareholder Wealth ◽  
Environmental Information ◽  
Economic Consequences ◽  
Share Price ◽  
Cumulative Abnormal Return ◽  
Environmental Reporting ◽  
Financial Report ◽  
Significant Difference

This study was carried out to examine the economic consequences ofvoluntary environmental reporting on shareholders' wealth among Malaysian Listed Companies that voluntarily disclosed environmental information in their financial report. One hundred andfifty two (152) companies of Bursa Malaysia (MSE) had been identified as a sample in the current study. Seventy six (76) companies were classified as environmental reporting companies while the remaining companies were classified as non-environmental reporting companies. The classification was done in order to determine the differences between share price, profitability and market equity for both types of companies. The study hypothesizes that voluntary environmental reporting leads to an improvement in the shareholders wealth. However, the results show that there is no significant difference between cumulative abnormal return for environmental and non-environmental reporting companies. Based on the results obtained, it can also be concluded that profitability and size of the companies do not have any significant roles in deciding whether or not to produce environmental reporting companies.

Pengaruh Intellectual Capital, Profitabilitas, Dan Leverage Terhadap Nilai Perusahaan Pada Perusahaan Sektor Properti, Real Estate, Dan Konstruksi Bangunan Yang Terdaftar Di Bursa Efek Indonesia

2018 ◽  
Vol 9 (2) ◽  
pp. 1-14
Author(s):  
Haryani Chandra ◽  
Hamfri Djajadikerta
Keyword(s):  
Real Estate ◽  
Intellectual Capital ◽  
Firm Value ◽  
Stock Price ◽  
Stock Exchange ◽  
Value Added ◽  
Simple Random Sampling ◽  
Positive Influence ◽  
Public Companies ◽  
Equity Ratio

Go public companies have main purpose to increase firm value consistently. Increased firm value can reflect the increase in the prosperity of shareholders. The purpose of this research is to determine whether intellectual capital, profitability, and leverage have an influence on firm value. This research is expected to help companies to determine the focus on managing the factors those have an influence towards firm value and help investors and potential investors to make investment decisions. This research is conducted on firms listed in property, real estate, and building construction sector in Indonesia Stock Exchange during 2010 until 2015. Samples are selected by simple random sampling method. The research method used is the regression analysis. Intellectual capital is measured by value added intellectual coefficient (VAIC), profitability is measured by return on assets (ROA), leverage is measured by debt- to-equity ratio (DER), and firm value is measured by the year-end closing stock price. The results showed that intellectual capital, profitability, and leverage have partially a significant positive influence on firm value. In addition, intellectual capital, profitability, and leverage have significant influence simultaneously on firm value. Keywords: firm value, intellectual capital, leverage, profitability

Effect Of Leverage, Inflation And GDP To Share Price Pt. Astra Otoparts Tbk.

ProBank ◽  
2018 ◽  
Vol 3 (2) ◽  
pp. 17-21
Author(s):  
Heriyanta Budi Utama ◽  
Florianus Dimas Gunurdya Putra Wardana
Keyword(s):  
Gross Domestic Product ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Share Price ◽  
Domestic Product ◽  
Coefficient Of Determination ◽  
Test Results ◽  
Purposive Sampling

The purpose of this study was to obtain empirical evidence about the effect of leverage, inflation and Gross Domestic Product (GDP) of the share price at PT. Astra Autopart, Tbk. companies in Indonesia Stock Exchange in 2011-2015. The sampling technique in this study using a purposive sampling. With the technique of purposive  sampling, all the members of the research samples by criteria. Samples that meet the criteria are used research data. Then followed the classic assumption test and test hypotheses by linear regression. The results of this study demonstrate the regression results in regression equation that Y = 2605,424 + 1561,550 X1 + 2,338 X2 + 38,994X3. T test results showed that the leverage anda GDP (Gross Domestic Product) is positive and significant effect on stock prices, while inflation is not positive and significant effect on stock prices. F test results showed that jointly leverage variables, inflation and GDP variables affecting the stock price significantly. The test results R2 (coefficient of determination) found that the variable leverage, inflation and GDP able to explain 35,4% of the stock price variable, while the remaining 64,6% is explained by other variables.Keywords: leverage, inflation, GDP, and the share priceThe purpose of this study was to obtain empirical evidence about the effect of leverage, inflation and Gross Domestic Product (GDP) of the share price at PT. Astra Autopart, Tbk. companies in Indonesia Stock Exchange in 2011-2015.The sampling technique in this study using a purposive sampling. With the technique of purposive  sampling, all the members of the research samples by criteria. Samples that meet the criteria are used research data. Then followed the classic assumption test and test hypotheses by linear regression.The results of this study demonstrate the regression results in regression equation that Y = 2605,424 + 1561,550 X1 + 2,338 X2 + 38,994X3. T test results showed that the leverage anda GDP (Gross Domestic Product) is positive and significant effect on stock prices, while inflation is not positive and significant effect on stock prices. F test results showed that jointly leverage variables, inflation and GDP variables affecting the stock price significantly. The test results R2 (coefficient of determination) found that the variable leverage, inflation and GDP able to explain 35,4% of the stock price variable, while the remaining 64,6% is explained by other variables.Keywords: leverage, inflation, GDP, and the share price

Is NPA and Stock Return Related: An Empirical Study of Back Testing Model

2017 ◽  
Vol 10 (1) ◽  
Author(s):  
Madhvi . ◽  
Amit Gautam ◽  
Amit Srivastava
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Stock Price ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Share Price ◽  
Correlation Studies ◽  
Back Testing ◽  
Trading Model ◽  
The Relationship

This paper examines the relationship between NPA announcements by banks and the impulsive movement in stock price brought out by these announcements. Primary focus of this study is to determine whether we can create a swing trading model based on back testing the data for the banking stocks listed on the Indian bourses.To achieve this objective we created a databasespanning ten years (2006 to 2016) and collected the daily share prices of eight banks listed on Bombay Stock Exchange (BSE). The relationship between share price and changes in NPA is studied on the basis of correlation studies and panel-data analysis. Although correlation studies does not establish any significant relationship, but the result of panel-data analysis clearly shows a negative relationship between the two. The result is further utilized to develop swing trading model and get benefit out of it. The novelty of the present study is that it clearly guides the swing traders as to how to earn benefit because of fluctuations in share price due to announce of NPA result.

Capital Market Consequences of Audit Office Size: Evidence from Stock Price Crash Risk

2020 ◽  
Vol 39 (2) ◽  
pp. 1-26
Author(s):  
Jeffrey L. Callen ◽  
Xiaohua Fang ◽  
Baohua Xin ◽  
Wenjun Zhang
Keyword(s):  
Capital Market ◽  
Stock Price ◽  
Bad News ◽  
Crash Risk ◽  
Public Firms ◽  
Big 4 ◽  
Empirical Tests ◽  
Office Size ◽  
Market Consequences ◽  
Robust Evidence

SUMMARY This study examines the association between the office size of engagement auditors and their clients' future stock price crash risk, a consequence of managerial bad news hoarding. Using a sample of U.S. public firms with Big 4 auditors, we find robust evidence that local audit office size is significantly and negatively related to future stock price crash risk. The evidence is consistent with the view that large audit offices effectively detect and deter bad news hoarding activities in comparison with their smaller counterparts. We further explore two possible explanations for these findings, the Auditor Incentive Channel and the Auditor Competency Channel. Our empirical tests offer support for both channels. JEL Classifications: G12; G34; M49.

scholarly journals PENGARUH INFLASI, PROFITABILITAS, STRUKTUR MODAL, DAN EARNING PER SHARE TERHADAP HARGA SAHAM PERUSAHAAN CONSUMER GOODS

2019 ◽  
Vol 8 (6) ◽  
pp. 3930
Author(s):  
Septia Wulandari Suarka ◽  
Ni Luh Putu Wiagustini
Keyword(s):  
Data Collection ◽  
Consumer Goods ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Participant Observation ◽  
Share Price ◽  
Significant Positive Effect ◽  
Positive Effect

The purpose of this study is to analyze the significance of the influence of inflation, ROE, DER, and EPS on stock prices. This research was conducted at Concern Goods Companies that are listed on the Indonesia Stock Exchange (IDX) for the 2015-2017 period. The number of samples of this study were 31 companies. Data collection is done by the method of non-participant observation. Based on the results of the analysis found that inflation, ROE. DER, and EPS simultaneously have a significant effect on stock prices. Partially Inflation and DER have no significant effect on stock prices, this indicates that investors do not see Inflation and DER as a decision to buy shares. While partially ROE and EPS have a significant positive effect on stock prices, this shows that investors pay attention to ROE and EPS in deciding to invest. The higher the ROE and EPS, the higher the investor's interest in investing in the company's capital, so that the share price will go up. Keywords: Inflation, ROE, DER, EPS, stock price    

Good times, bad times: the stock market performance of firms that own high value brands

2016 ◽  
Vol 50 (5/6) ◽  
pp. 670-694 ◽  
Author(s):  
Kevin Voss ◽  
Mayoor Mohan
Keyword(s):  
Chief Executive Officers ◽  
Stock Price ◽  
Ad Hoc ◽  
Chief Executive ◽  
Share Price ◽  
Content Type ◽  
Price Performance ◽  
Stock Market Performance ◽  
Using Data ◽  
Executive Officers

Purpose The purpose of the this paper is to correct a deficiency in the published literature by examining the share price performance of firms that own high-value brands in uptrending, downtrending and sideways markets. Design/methodology/approach The authors examined stock price performance for an index of firms that owned brands in the Interbrand list of the “Best Global Brands” from 2001 through 2009 using the Fama-French method. Findings The authors’ index outperformed the Standard & Poor’s 500 when the market was up or downtrending, but not when it moved sideways. Research limitations/implications The authors find that an index of firms that own the produced better returns than the Standard & Poor’s 500 market index. Owning highly valued brands may be a marketplace signal to the investing community regarding the firm’s management acumen. Practical implications Owning high-value brands seems to influence share price performance, a metric used to judge chief executive officers. Thus, brand investments align with the shareholders’ interest. The authors help alleviate the perception (Challagalla et al., 2014) that marketing managers make investments on an ad hoc basis. Originality/value For the first time, the authors evaluate the effect of owning one or more of the world’s most valuable brands on the market value of common stock using data from downtrending, uptrending and no-trend periods. This research is also among the first to introduce volatility into the Fama-French method and it is an important explanatory variable. This paper’s approach has interesting comparisons to other papers taking a similar analytical approach.

Transnational Corporate Governance: The State of the Art and Twenty-First-Century Challenges

2021 ◽  
pp. 614-646
Author(s):  
Dionysia Katelouzou ◽  
Peer Zumbansen
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Shareholder Wealth ◽  
Performance Measure ◽  
The State ◽  
First Century ◽  
Access To Health Services ◽  
Wide Range ◽  
Shareholder Wealth Maximization ◽  
Twenty First Century

This chapter explores corporate governance as a transnational regulatory field. Mirroring the rise in importance of the idea of shareholder wealth maximization as a firm’s definitive performance measure, corporate governance became a hotly contested field of competing visions of firms’ institutional and normative infrastructure in search of creating the most advantageous conditions to attract capital in volatile markets. This shift occurred at the same time that regulatory transformations in Western postindustrial societies since the early 1980s had begun to significantly shift public service provision and state-organized frameworks for old-age security guarantees and access to health services. Today’s corporate governance laboratory is a transnational force field, fought over by a host of different state and nonstate actors and also by private actors such as institutional investors. Meanwhile, following the financial crises in 2001, 2008 and 2020 and the simultaneously growing pressure on corporations from human rights, gender equality, and environmental groups, the corporate governance debate again is shifting. This time, a diversity of issues are being discussed under the corporate governance rubric, indicating a more comprehensive engagement with the firm’s purpose and functions and its societal obligations and responsibilities. Given the crucial role of firms as the residual claimants of a wide-ranging retreat of the state from its role in guaranteeing and providing a wide range of social functions, corporate governance is a mirror for the transformation of public and private power, and it has to address the twenty-first-century challenges, including global value chains and the proliferation of institutional investors, unfolding on a planetary scale.

Company Dividend Policy Models: Neutral Approach

2020 ◽  
Vol 3 ◽  
pp. 40-52
Author(s):  
Sergey Krylov
Keyword(s):  
Policy Implementation ◽  
Stock Price ◽  
Dividend Policy ◽  
Share Price ◽  
Marketing Performance ◽  
Implementation Approach ◽  
Policy Models ◽  
Price Earnings Ratio ◽  
Effective Instrument ◽  
Dividend Irrelevance

The article treats a concept of the formalized modeling of the dividend policy scores and company marketing performance scores derived (stock market position) within neutral dividend policy implementation approach conditions as an instrument of the scores analysis and forecasting. The methodology of the research consists of the Dividend Irrelevance theory, Dividend Policy Significance theory and sustainable company development concept. It has been stated that a formalized approach of the dividend policy implementation presumes a construction of the basic relevant scores models characterizing the company dividend policy and its marketing performance as Dividend Payout, Dividend Cover, expected Share Price, Dividend Yield, Price / Earnings Ratio (common stock price/earnings ratio). The formalized models of the scores mentioned are applicable for a forecast-analytical scores evaluation and their variances as well by estimating an impact of the models defining factors exercised by the appropriate factoring analysis method within the neutral dividend policy implementation approach conditions. The conclusion is drawn, that the formalized models of the dividend policy scores and company marketing performance scores derived, having been developed, are an effective instrument for their forecasting and analysis so that proactive decisions to manage the company dividend policy implementation within neutral approach conditions are ensured.

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