scholarly journals Does Herding Bias Drive the Firm Value? Evidence from the Chinese Equity Market

2019 ◽  
Vol 11 (20) ◽  
pp. 5583 ◽  
Author(s):  
Shah ◽  
Khan ◽  
Meyer ◽  
Meyer ◽  
Oláh
Keyword(s):  
Behavioral Finance ◽  
Firm Value ◽  
Equity Markets ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Firm Level ◽  
Listed Firms ◽  
Trading Period ◽  
Behavioral Impact ◽  
The Impact

Equity markets play a pivotal role in the sustainability of developing countries, such as China. The literature on the detection of herding biases is confined to the aggregate level (firms, sector/industry and market). The present study adds to the behavioral finance literature by addressing the surprisingly unnoticed phenomena of the behavioral impact of herding bias on firm value (FV) at the firm level, using the sample of A-Shares listed firms at the Shanghai and Shenzhen Stock Exchanges (SSE and SZSE) under panel fixed effect specification. Initially, we detect the existence of investors and managers herding (IHR and MHR) biases at firm-level, and later, we examine their impact (distinct and interactive) upon the FV. The empirical results document the presence of IHR and MHR bias at market, sector and firm-level in both equity markets, which potentially drive the FV, while the impact is more pronounced during the extreme trading period. The findings are robust under different time intervals, and industry classification, therefore, offers useful policy implications to understand the behavioral dynamics of investors and managers.

scholarly journals Struktur Modal dan Kinerja Perusahaan (Studi pada perusahaan yang terdaftar di Bursa Efek Indonesia periode 2011 s/d 2012)

2014 ◽  
Vol 5 (1) ◽  
Author(s):  
Novi S Budiarso
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Firm Value ◽  
Stock Exchange ◽  
Optimal Level ◽  
Stock Exchanges ◽  
Listed Firms ◽  
Total Debt ◽  
The Impact

Abstract This paper examine the impact of capital structure on firm performance, in Indonesian Stock Exchange. Firm performance are analyzed from the side of accounting indicators, in this research use liquidity. Because the optimal level of debt of the firm is limited by the liquidity of the assets and it depends on the average usage of the debt in the particular industry. In the other side liquidity  is  conventionally  seen  as  reflecting  investors’  degree  of  risk -aversion, The study collects  of listed firms in Indonesian Stock Exchanges during 2011 to 2012. The listed firms on sub sector trade, services and investment. Multiple Regression analysis approach was employed in carrying out this analysis. Specifically, determined the simultaneous relationships among the various variables. The results show that as partial total debt to asset significantly influences to company’s performance but long term debt to asset not significantly influences to company’s performance. Simultaneously, total debt to asset and  long term debt to asset influences company’s performance. This evidence is consistent with models of optimal capital structure and with the hypothesis that debt level changes release information about changes in firm value/performance.

The Impact of the Business Environment on the Formalization of Informal Firms. The Case of Kosovo

Südosteuropa ◽  
2020 ◽  
Vol 68 (4) ◽  
pp. 505-529
Author(s):  
Kujtim Zylfijaj ◽  
Dimitar Nikoloski ◽  
Nadine Tournois
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Business Environment ◽  
Positive Influence ◽  
Policy Implications ◽  
Tax Reforms ◽  
Firm Level ◽  
Characteristics Analysis ◽  
Significant Negative Impact ◽  
The Impact

AbstractThe research presented here investigates the impact of the business environment on the formalization of informal firms, using firm-level data for 243 informal firms in Kosovo. The findings indicate that business-environment variables such as limited access to financing, the cost of financing, the unavailability of subsidies, tax rates, and corruption have a significant negative impact on the formalization of informal firms. In addition, firm-level characteristics analysis suggests that the age of the firm also exercises a significant negative impact, whereas sales volume exerts a significant positive impact on the formalization of informal firms. These findings have important policy implications and suggest that the abolition of barriers preventing access to financing, as well as tax reforms and a consistent struggle against corruption may have a positive influence on the formalization of informal firms. On the other hand, firm owners should consider formalization to be a means to help them have greater opportunities for survival and growth.

Currency risk impact on the financial performance of multilateral banks

2015 ◽  
Vol 13 (1) ◽  
pp. 91-118
Author(s):  
Philip Kamau ◽  
Eno L. Inanga ◽  
Kami Rwegasira
Keyword(s):  
Financial Performance ◽  
Design Methodology ◽  
Regression Coefficient ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Currency Risk ◽  
Content Type ◽  
Regulatory Status ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the impact of currency risks on the financial performance of multilateral banks (MBs). Financial performance is measured here by after-tax accounting profitability or losses. Design/methodology/approach – Quantitative hypothesis regarding the impact of currency risks on the financial performance of MBs was tested by a two-tailed t test for significance of the b regression coefficient. Findings – A regression analysis was done on the total currency risk and financial performance of MBs after taking into account currency risk over eight years. The analysis of variance of the regression of the b coefficient led to non-rejection of the null hypothesis of no association, F(1, 6) = 0.77, p > 0.05. The results of the two-tailed t test on the b regression coefficient suggest that the relationship between currency risk and financial performance is statistically insignificant. Therefore, it was concluded that there is no significant impact of currency risk on the financial performance of MBs. Research limitations/implications – The results of the study can be generalized only for MBs given their peculiar characteristics as wholesale banks, which are owned mainly by governments and are generally not listed on stock exchanges. Originality/value – The study is of value to those interested in the multilateral banking industry. To the authors’ knowledge it is the first study providing empirical evidence on currency risk impact on MBs financial performance. The study finds that the currency risk impact on the financial performance of MBs is insignificant. The results are also useful to managers of MBs in terms of benchmarking their effectiveness in managing currency risk compared to their peers and learn from better performers. It has also policy implications in terms of justifying the current self-regulatory status, shareholder monitoring and governance of MBs as they are not significantly impacted by currency risk as it appears to be effectively managed.

scholarly journals Capital Structure-Firm Value Nexus: Moderating Role of Profitability

2020 ◽  
Vol 11 (2) ◽  
pp. 375-386
Author(s):  
Hamed Ahmad Almahadin ◽  
Yazan Salameh Oroud
Keyword(s):  
Capital Structure ◽  
Firm Value ◽  
Panel Data Analysis ◽  
Policy Implications ◽  
Ample Evidence ◽  
Functional Models ◽  
The Impact ◽  
The Relationship ◽  
Moderating Role

This study aims to investigate the moderating role of profitability in the relationship between capital structure and firm value in Jordan, as an example of an emerging economy. For this purpose, two functional models were formulated to capture the direct relationship as well as the interaction impact of capital structure on firm value. The robust empirical findings of panel data analysis provide strong evidence of an adverse relationship between capital structure and firm value. The findings confirm that the impact of capital structure appears to be complicated in nature and difficult to examine without controlling for the interaction of profitability as one of the major determinants. Therefore, studying the interaction effect provides ample evidence and enhances the understanding of the link between firm value and capital structure. The empirical results of the study may provide important insights and policy implications to decision-makers.

scholarly journals State Control, Marketization, And Firm Value: Evidence From China

2014 ◽  
Vol 30 (6) ◽  
pp. 1577 ◽  
Author(s):  
Kun Su ◽  
Rui Wan
Keyword(s):  
Panel Data ◽  
Firm Value ◽  
State Control ◽  
Negative Effects ◽  
Firm Level ◽  
Listed Firms ◽  
The Government ◽  
High Degree

<p>Using a firm-level panel data of Chinese listed firms, this paper examines the effects of state control on firm value and the different impacts that have under different degree of marketization deeply. The results show: compared with non-state controlled firms, state controlled firms are imposed by much policy burden and have more serious tunneling or expropriation behaviors. Therefore, firm values in state controlled firms are lower than in non-state controlled firms. For state controlled firms, the lower the government administrative ranks, the more serious the intervention or expropriation behaviors imposed by government, and thus the lower the firm value. Compared with low marketization regions, the negative effects of state control and low government administrative rank control on firm value is relatively smaller in regions with high degree of marketization.</p>

scholarly journals Pakistan’s Experience with the Pakistan–China FTA: Lessons for CPEC

2017 ◽  
Vol 22 (Special Edition) ◽  
pp. 1-24 ◽  
Author(s):  
Theresa Theresa ◽  
Nida Jamil ◽  
Azam Chaudhry
Keyword(s):  
Free Trade Agreement ◽  
Market Access ◽  
Value Added ◽  
Trade Agreement ◽  
Policy Implications ◽  
Firm Level ◽  
Trade Data ◽  
Chinese Markets ◽  
The Impact ◽  
Tariff Reductions

As Pakistan enters the CPEC era, there is a sense of optimism as well as concern in the country, given the uncertain economic impact of this major collaboration between China and Pakistan. Using firm-level and trade data, we empirically test the impact of the 2006 free trade agreement (FTA) between the two countries on the productivity, size and value added of potentially affected Pakistani firms. These results have important policy implications for CPEC initiatives. We start with a difference-in-difference analysis, comparing trends in those sectors in Pakistan made more vulnerable by tariff reductions on Chinese goods relative to sectors for which the tariff did not change significantly. Next, we examine those sectors in Pakistan that were given greater access to Chinese markets through reductions in the Chinese tariff on Pakistani goods relative to sectors for which market access remained roughly the same. In the sectors made more vulnerable by reductions in Pakistani tariffs on Chinese goods, imports to Pakistan have risen, while productivity, value added and value added per worker have fallen relative to other sectors since the FTA. In the sectors for which Pakistan gained access to Chinese markets, exports and employment have risen, but productivity and value added have fallen relative to other sectors since the FTA.

Board composition and value relevance of Ghanaian firms: a seemingly unrelated regression approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ebenezer Agyemang Badu ◽  
Ebenezer Nyarko Assabil
Keyword(s):  
Best Practices ◽  
Firm Value ◽  
Value Relevance ◽  
Practical Implication ◽  
Seemingly Unrelated Regression ◽  
Board Composition ◽  
Content Type ◽  
Listed Firms ◽  
Unrelated Regression ◽  
The Impact

PurposeThe purpose of this study is to examine the connection between board composition and value relevance of financial information in Ghana.Design/methodology/approachThe study uses a panel data of 144 firm-year observations of listed firms in Ghana.FindingsThe study finds that a higher fraction of independent directors is associated with lower firm value. The study further finds that board size is positively related to firm value, whereas duality is negatively associated with firm value.Practical implicationsThe practical implication of this paper is that investors and regulators should be mindful that specifying governance composition should not only be based on “so-called” codes of best practices but also the level of the country's or the sector's development and local institutional structures.Originality/valueThis study uses five different measurements of market share and considers the impact of the provision of the Code of Best Practices in Ghana.

Impact of firm-specific characteristics on managers’ identity disclosure

2014 ◽  
Vol 27 (2) ◽  
pp. 150-168
Author(s):  
Etumudon Ndidi Asien
Keyword(s):  
Chief Executive ◽  
The State ◽  
Annual Reports ◽  
Stock Exchanges ◽  
Original Research ◽  
Content Type ◽  
Listed Firms ◽  
Gcc Countries ◽  
Identity Disclosure ◽  
The Impact

Purpose – This paper aims to examine the impact of firm-specific characteristics on managers’ identity disclosure in the Gulf Cooperation Council (GCC) region. Design/methodology/approach – Research data were collected from 2010 annual reports and financial statements of 403 listed firms in the GCC countries. The data were analyzed by multiple regression models. Findings – Evidence suggesting that managers’ identity is significantly disclosed by firms that separate the office of chairman from that of chief executive officer was documented. It was also found that mature firms significantly disclose their managers’ identity. Our finding suggests that firms’ declaration that they comply with a set of corporate governance code leads them to disclose managers’ identity. However, we find that firms that are related to the state significantly disclose their managers’ identity, contrary to expectation. Research limitations/implications – One limitation is the lack of a uniform classification of industries by the stock exchanges in the GCC region. The implication of this is that researchers are lacking a uniform standard to apply in their research. Another limitation is the use of only 2010 annual reports and accounts; thus, there is a problem of inter-temporal generalizability. As markets in the GCC countries are evolving, it will be interesting to capture the state of managers’ identity disclosure after 2010. Practical implications – The paper has the potential to influence firms in the GCC region to begin disclosing managers’ personal details and other contact information. In addition, there is the prospect that market regulators in the GCC region and other emerging markets who may read this research may now require firms to disclose their managers’ identity. Originality/value – This is an Original research paper.

scholarly journals DO FIRMS FACING INCREASES IN FINANCIAL CONSTRAINTS TEND TO GENERATE CASH THROUGH TAX AVOIDANCE? EMPIRICAL EVIDENCE FROM INDONESIA PUBLICLY LISTED FIRMS

Scientax ◽  
2021 ◽  
Vol 2 (2) ◽  
pp. 232-247
Author(s):  
John Erhan Prasetyo Hermawan ◽  
Riko Riandoko
Keyword(s):  
Firm Value ◽  
Financial Constraints ◽  
Global Financial Crisis ◽  
Tax Avoidance ◽  
Corporate Image ◽  
Avoidance Behaviour ◽  
Regression Result ◽  
Corporate Tax ◽  
Listed Firms ◽  
The Impact

This study examines the effect of increases in financial constraints measured at both firm-specific and macroeconomic level on corporate tax avoidance behaviour. Based on a hand-collected sample of 60 publicly listed firms on Indonesia Stock Exchange (IDX) from the year 2009 to 2016, our regression result shows that firms facing increased firm-specific constraints exhibit lower cash effective tax rates ranging from 0.55 to 9.57 percent which equate to between 0.60 and 10.29 percent of operating cash flows, whereas at macroeconomic constraints do not. The firm-specific constraints result is consistent with our hypothesis and Edwards, et al. (2016), whereas macroeconomic constraints result is inconsistent. Nevertheless, its inconsistency can be caused by several factors, i.e.: (1) the change of corporate tax rate from 28 to 25 percent as fiscal policy after the impact of Global Financial Crisis 2008. It could reduce tax avoidance behaviour; (2) Indonesian Go Public Information Centre stated that the purpose of the firms’ Initial Public Offering (IPO) is not only to finance the firms’ operation due to increases in financial constraints, but also to increase firm value, improve corporate image, grow employee loyalty, maintain business continuity and get tax incentives; (3) the equity financing in Indonesia is more related to equity participation activities conducted among shareholders that’s not listed on the stock or bond markets, e.g. private placement, joint venture, mergers and acquisitions.

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