Industry consolidation as a strategy: an acquisition program perspective

Purpose

The purpose of this paper is to enlighten the intriguing process of industry asset consolidation. It is critical for firms to manage their business acquisitions strategically for survival in this industry life cycle process, which develops through multiple company mergers. The companies extensively acquiring industry assets have utilized acquisition programs consisting of both pre-acquisition strategizing and post-acquisition integration; however, the existing literature on acquisition programs focuses on post-acquisition integration activities. This study aims to bridge this gap.

Design/methodology/approach

This study focuses on pre-acquisition strategizing of acquisition programs and proposes a model in which an acquiring company could manage its acquisitions for industry asset consolidation over the industry evolution.

Findings

Empirically, in the multi-case study of telecommunications infrastructure companies, the authors collect an extensive set of archival records accumulated over the whole industry life-cycle, spanning more than 30 years, and they apply a qualitative data analysis to reveal strategic actions within the companies.

Research limitations/implications

The discoveries elaborate on activities comprising the acquisition process model: social legitimacy, strategic alignment, resource fulfillment, consolidation pursuit and merging.

Practical implications

The counterintuitive findings are that the companies strived to ensure legitimacy early in the telecommunication infrastructure markets before they reached strategic alignment with their owners.

Originality/value

The results extend the understanding of industry asset consolidation as an organization-level phenomenon and show how contextual factors connected to industry life-cycle phases, such as regulatory regimes and financial cycles and industry evolution, influence the attributions of an acquisition program.

Value of corporate political contributions from the investors’ perspective

In this study we consider corporate political contributions as a special type of social capital reserved for future contingencies. Firms benefit from making such contributions when the government suddenly intervenes in the market. We explore this value-creation mechanism in terms of the firm-investor relationship, not in terms of the traditional firm-government relationship. When a government intervention is being proposed or approved, firms that have made political contributions coordinating with political candidates are likely to enjoy better stock market returns than those that have not made such contributions. We also argue that firms that have made political contributions may experience lower stock returns than those that have not when the intervention plan is rejected. By focusing on the U.S. government’s Troubled Asset Relief Program (TARP) of 2008, our event study analysis with three news announcements finds that financial institutions that made political action committee (PAC) contributions indeed enjoyed higher stock returns when TARP was proposed and eventually approved. However, we do not find support for the investors’ devaluation of political contributions when TARP was once rejected during the review process. The findings propose that managers can use corporate political contributions as a strategic option to help investors reduce investment uncertainty by presenting their readiness for any unexpected change in the regulatory environment.

The Other Invisible Hand: How Markets—as Institutions—Propagate Conformity and Valuation Errors

The institutionalized status of markets is undoubtedly due to their presumed ability to aggregate individual bids into a single unbiased estimate of value. While not denying this emergent property of market processes, we propose and test an alternative perspective that explains how market processes can also generate the propagation of individual valuation errors that aggregate into price bubbles. Theoretically, we advance a microinstitutional perspective that draws from social and evolutionary psychology linking market processes to a more general process of institutionalization, whereby individuals seeking the adaptive benefits of conformity may—due to bounded and socially biased rationality—instead generate maladaptive individual and collective outcomes. Empirically, we craft an efficient experimental market and find three sets of evidence consistent with our microinstitutionalization perspective. We first show—at the individual level—that market participants exhibit a social bias toward conformity with the market’s collective valuation, even when the emergent market valuation is demonstrably incorrect. We then show—at the market level—that the range of valuations over time also decreases in a conforming direction, again independent of valuation accuracy. Last, we provide the first experimental test of the long-assumed effect of social ambiguity on institutionalization, finding that market participants’ over-attention to the collective valuation is indeed sensitive to variation in social ambiguity. We conclude by highlighting the relevance of our theoretical perspective, method, and findings for future research on institutions and institutionalization processes, as well as future studies on social influence and conformity-based errors.

Funding: S. S. Levine acknowledges research grants from Singapore Management University; the University of Texas at Dallas; and the European Research Council (agreement 695256).

Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2022.0173 .

Founder or descendant CEOs, tax avoidance and firms' future risks: the Indonesian evidence

Purpose

This study aims to examine the impact of founder or descendant chief executive officers (CEOs) on the relationship between tax avoidance and firms' future risk. This issue is important because of an ongoing debate about founder and descendant CEOs' impacts, contributions and implications for firms.

Design/methodology/approach

This study uses a sample of publicly listed nonfinancial Indonesian firms in 2012–2019, most of which are family firms and adhere to a two-tier governance system that was understudied in previous studies. The authors use panel-random effect data regression for the statistical analysis.

Findings

The results demonstrate that founder or descendant CEOs do not affect the positive relationship between tax avoidance and firms' future risks.

Research limitations/implications

This research supports the upper-echelon theory, arguing that top management teams affect firms' strategic policies and outcomes.

Practical implications

CEOs play weaker roles in countries with a two-tier governance system than in a one-tier one. Additionally, in relation to Hofstede's cultural dimensions, Indonesia has collective and feminist characteristics that emphasize elements of togetherness and group so that firms reflect the firms' top management teams and not only CEOs.

Originality/value

This research fills a research gap on the role of founder and descendant CEOs in the relationship between tax avoidance and firms' future risks by analyzing firms in Indonesia, a country with a two-tier governance system and collective and feminine cultural characteristics.

Corporate social responsibility and risk-taking in banking

Purpose

The purpose of this study is to examine whether banks’ commitment to corporate social responsibility (CSR) is related to the diversification of their activities and whether CSR, as a result, affects banks’ risk profile.

Design/methodology/approach

Using a sample of 215 publicly traded U.S. bank holding companies between 1996 and 2016, this study applies regression analysis to examine the links between CSR and activity diversification and risk-taking. It also conducts a mediation test to determine whether CSR affects risk through its influence on banks’ activity diversification.

Findings

The results of this study show that banks engaging in positive CSR activities significantly increase the diversification of their banking activities, consistent with the theory that CSR serves as an implicit risk hedging strategy. Mediation analysis provides evidence that this translates into more stable and less risky banks.

Originality/value

This study contributes to the literature by suggesting that activity diversification is a channel through which CSR reduces bank risk and improves asset quality.

The role of early intergroup experiences for identification with all humanity in adulthood

Identification with all humanity (IWAH), defined as a bond with and concern for people all over the world, predicts concern for global problems, commitment to human rights, and prosocial activities. However, it is still unknown how such a broad social identification develops and if early experiences play any role. Two studies explored the role of diverse childhood and adolescence intergroup experiences in predicting IWAH in adulthood. We focused on experiences such as being raised in diversity and having intergroup friends, helping or being helped by various others, and having experiences leading to re- or de-categorization, and introduced a new Childhood/Adolescent Intergroup Experiences (CAIE) scale. Study 1 (N = 313 U.S. students, M age = 21) and Study 2 (N = 1,000, a representative Polish sample, M age = 47) found that this kind of intergroup experiences during childhood and adolescence predicted IWAH beyond the effects of its other known predictors, such as empathy, openness to experience, universalism, right-wing authoritarianism, social dominance orientation or ethnocentrism. These results, obtained on various samples and in countries with different ethno-cultural contexts, point to potential ways of enlarging IWAH during childhood and adolescence.

Cryptocurrency adoption and continuance intention among Indians: moderating role of perceived government control

Purpose

This study aims to investigate the influence of perceived government control (PGC) on cryptocurrency adoption and continuance intention among Indians through an integrated model of the extended Unified Theory of Acceptance and Use of Technology (UTAUT) with the Information System Success Model (ISSM).

Design/methodology/approach

This study examined the items of cryptocurrency adoption, continuance intention and PGC adopted from the information systems and cryptocurrency literature. The survey was administered to 391 Indians through an online questionnaire. Partial least squares structural equation modeling was used to analyze data.

Findings

Results have shown that social influence, effort expectancy and perceived trust are the major drivers for cryptocurrency adoption. All paths leading to cryptocurrency adoption were found to be significant in the hypothesized directions. The study also found that PGC moderates the relationship between adoption and continuance intention.

Originality/value

This study advances existing literature by empirically verifying the integrated UTAUT and ISSM in the context of cryptocurrency adoption for investment purposes. The findings offer crypto-developers and crypto-exchange insight into how adoption is diffusing in emerging markets. The findings provide policymakers with meaningful insights into the role of government regulations in cryptocurrency continuance intention.

Study on effect of collaborative governance participation willingness of online food delivery platform restaurants and consumers from perspective of control theory: Based on moderating effects of perceived risks

The popularization of the Internet and the convenience of e-commerce are driving the online restaurant industry’s rapid development of worldwide. However, serious information asymmetries in online food delivery (OFD) transactions not only aggravate food safety risks, resulting in simultaneous government and market failures, but also intensify consumers’ perceived risks. This paper innovatively constructs a research framework for the governance participation willingness of OFD platform restaurants and consumers under the moderating effects of perceived risks from the perspective of control theory and then develops scales for analyzing the governance willingness of both restaurants and consumers. Using data collected through a survey, this paper explores the effect of control elements on governance participation by restaurants and consumers and analyzes the moderating effects of perceived food safety risks. Results showed that both government regulations and restaurant reputation (formal control elements) and online complaints and restaurant management response (informal control elements) can increase governance participation willingness among both platform restaurants and consumers. The moderating effects of perceived risks are partially significant. When the risks perceived by restaurants and consumers are strong, government regulation and online complaints can more effectively boost the governance participation willingness of restaurants and consumers, respectively. At this moment, consumers’ willingness to pursue problem solving through online complaints is evidently enhanced. Accordingly, the perceived risks and the online complaints jointly motivate restaurants and consumers to participate in governance activities.

Ethical considerations of the vaccine development process and vaccination: a scoping review

BACKGROUND

Various vaccines have been developed and distributed worldwide to control and cope with COVID-19 disease. To ensure vaccines benefit the global community, the ethical principles of beneficence, justice, non-maleficence, and autonomy should be examined and adhered to in the process of development, distribution, and implementation. This study, therefore, aimed to examine ethical considerations of vaccine development and vaccination processes.

METHODS

A scoping review of the literature was conducted based on the Arkesy and O'Malley protocol to identify eligible studies published until November 2021. We searched Web of Science, PubMed, Scopus, and SciELO databases. The search was conducted using combinations of Medical Subject Heading (MeSH) search terms and keywords for Ethics, COVID-19, and vaccines in abstract, keywords, and title fields to retrieve potentially relevant publications. We included any study that reported one of the four principles of medical ethics: autonomy, justice, non-maleficence, and beneficence in the COVID-19 vaccine development and distribution and implementation of vaccinations. Letters, notes, protocols, and brief communications were excluded. In addition, we searched gray literature to include relevant studies (ProQuest database, conferences, and reports). Data were analyzed using framework analysis.

RESULTS

In total, 43 studies were included. Ethical considerations concluded two themes: (1) production and (2) distribution and vaccination. The production process consisted of 16 codes and 4 main Categories, distribution and vaccination process consisted of 12 codes and 4 main Categories. Moreover, the ethical considerations of special groups were divided into four main groups: health care workers (HCWs) (five codes), children and adolescents (five codes), the elderly (one code), and ethnic and racial minorities (three codes).

CONCLUSION

Due to the externalities of pandemics and the public and social benefits and harms of vaccination, it is not feasible to adhere to all four principles of medical ethics simultaneously and perfectly. This issue confronts individuals and policymakers with several moral dilemmas. It seems that decision-making based on the balance between social benefit and social harm is a better criterion in this regard, and the final decision should be made based on maximizing the public benefit and minimizing the public harm.

Assessing manifestations of bossing in the context of personality traits of business managers

Introduction

Abusive supervision or bossing represents a specific form of mobbing as a long-term, systematic negative action by superiors toward subordinates.

Methods

From the point of view of the operationalization of this construct, the original BOSSm18 methodology is presented in the paper in the context of the B5 methodology, which enables specification of personality traits in terms of the original Big Five concept.

Results

Based on the research dataset of 636 business managers, the paper presents the results of the basic psychometric parameters of the methodology and the content specification of the extracted factors. The research findings support a multidimensional understanding of the bossing construct.

Discussion

The limiting factors of the interpretation and generalization of the results relate to the consideration of cultural contexts and situational conditions of perception of bossing manifestations.

Democratizing effects of digital ledger technologies: Implications for economic mobility

There is a large body of empirical and theoretical literature on the effects of technological change on individuals, labor markets, and overall economic activity. Theories of skill-biased technical change (SBTC) suggest that technology increases the earnings power of skilled workers, but substitutes for less skilled workers. Distributed ledger technologies (DLTs) provide a new context for examining and understanding the impact of technology change on labor, competition, and economic outcomes. This paper explores the theoretical frameworks through which DLTs could enhance economic mobility and provides examples from several areas, including: i) the creation of new jobs and higher value-added jobs, and the modularization of complex tasks; ii) improvements in the way people learn and acquire human capital; iii) increased competition in the marketplace; and iv) more inclusive access to financial services with fewer intermediaries.

A Comparison Research on Dynamic Characteristics of Chinese and American Energy Prices

This study compares the dynamic characteristic of Chinese and American energy prices from the perspectives of learning expectation, volatility, persistence, and so on. First, the most suitable learning speeds for energy prices are determined and the energy price expectations are calculated by the learning models. Second, volatility characteristics and Granger-spillover effects among different energy prices and expectations are examined using the stochastic models based on the coefficient significance and DIC criteria. Third, the dynamic correlation coefficients are obtained by the selected stochastic models that have the lower DIC values. Fourth, expectation, volatility, and foreign energy price are introduced into the persistence model, and the persistence characteristics and reasons behind Chinese and American energy prices are empirically tested and compared. Finally, conclusions and suggestions are given based on the theoretical analysis and empirical results.

Sandwiched SDEs with unbounded drift driven by Hölder noises

We study a stochastic differential equation with an unbounded drift and general Hölder continuous noise of order $\lambda \in (0,1)$ . The corresponding equation turns out to have a unique solution that, depending on a particular shape of the drift, either stays above some continuous function or has continuous upper and lower bounds. Under some mild assumptions on the noise, we prove that the solution has moments of all orders. In addition, we provide its connection to the solution of some Skorokhod reflection problem. As an illustration of our results and motivation for applications, we also suggest two stochastic volatility models which we regard as generalizations of the CIR and CEV processes. We complete the study by providing a numerical scheme for the solution.

The Relationship between Leadership in BPM and Company Profitability

This paper studies the relationship between leadership as an activity of business process management (BPM) and company performance. Business process data about leadership and business processes in SMEs were collected via questionnaires on the population of 3007 SMEs in Slovenia. Aspects of leadership such as the involvement of employees, middle management, customers and suppliers were studied. The financial data of the SMEs of the sample were obtained from publicly available financial statements to assess relative residual income profitability ROEr and ROEa. Data analysis was performed using Bartlett’s, Kaiser–Maier–Olkin and nonparametric Mann–Whitney U tests. We confirmed a positive relationship between employee involvement in leadership as an activity of BPM and company profitability. It was proved that companies that involve employees and middle management in improving core business processes to a greater degree are more profitable. Intense involvement of employees in changes in core business processes results in higher company profitability, which has been detected by the higher risk-adjusted profitability measure ROEa. Companies that involve middle management to a greater degree by leading employees based on their interests are more profitable. The results are important for managers as decision-makers and other company stakeholders, especially those responsible for business process improvements. Theoretical and practical implications and further research possibilities are discussed.

Family ownership and control as drivers for environmental, social, and governance in family firms

Sluggish market demand can deteriorate the financial situation of a company and affect a shareholder’s decision to adopt environmental, social, and governance criteria (ESG). According to the socioemotional wealth theory, family firms place significant emphasis on sustainable development and long-term orientation, but this emphasis can be either internally or externally driven according to the type of involvement chosen by the owning family. Therefore, this study uses listed family firms to explore the relationship between different types of family involvement (i.e., family ownership and control, the influence of market competition, and the institutionalisation level of the environment in which a firm decides to pursue ESG criteria). We performed a multivariate regression analysis on a sample of 1,151 Chinese companies to test these relationships and found that both family ownership and control are positively related to ESG scores. Market competition negatively moderates the influence of both family ownership and control on the adoption of ESG criteria. Moreover, the influence of family control is negatively moderated by the institutional environment. Thus, types of family involvement seem to be relevant for the firm’s engagement with ESG criteria.

First Price Sealed-Bid Auctions with Bidders’ Heterogeneous Risk Behavior: An Adversarial Risk Analysis Approach

Bidders’ bidding behavior is analyzed in first price sealed-bid (FPSB) auctions using an adversarial risk analysis (ARA) framework. However, using nonstrategic play and level-k thinking solution concepts, modeling is performed by assuming only two bidders. Also, the aleatory and concept uncertainties have not been yet taken into account by using an ARA framework for these auctions. In this paper, we apply an ARA approach to model bidders’ bidding behavior in a more realistic way for FPSB auctions. We assume n bidders that may have different wealth and heterogeneous risk behaviors. We use nonstrategic play and level-k thinking solution concepts, and we take into account aleatory uncertainty in addition to epistemic uncertainty. Finally, concept uncertainty is taken into account to find ARA solutions for these auctions. We also provide numerical examples to illustrate our methodology.

IMPACTS OF SOCIAL CAPITAL ON HOUSING PRICES: THE CASE OF SPECIAL RELATIONSHIP-BASED TRANSACTIONS

In Taiwan, many housing transactions are special relationship-based transactions that involve family and friends, debt relations, urgent purchases and sales, and government agencies. As such, the prices in such transactions should differ from those in what we consider to be normal arm’s length transactions. In this regard, social capital theory can be used to analyze these transactions. The empirical data on housing transactions conducted in Taipei City from January 1, 2012 to December 31, 2018 were collected for this study. The empirical results showed that the prices in transactions involving debt relations and urgent purchases and sales were 22.6% lower than those in normal arm’s length transactions. The prices in transactions with government agencies were 48.9% lower than those in normal arm’s length transactions. The prices in transactions with first-degree, second-degree, and third-degree relatives were respectively, 57.3%, 53.1%, and 50.3% lower than those in normal arm’s length transactions. The prices in transactions involving friends were 28.0% lower than those in normal arm’s length transactions. The empirical results highlight the importance of the impacts of personal relationships or social relations on housing prices in special relationship-based transactions. The results also supported the social capital hypothesis.

An investigation on dynamic connectedness of commodity market with financial market during the Russia–Ukraine invasion

Purpose

This study unravels an attempt to investigate the dynamic connectedness of agri-commodity (wheat) of Russia with 10 financial markets of wheat importing counties during the Russia–Ukraine invasion.

Design/methodology/approach

This study took the daily prices of Wheat FOB Black Sea Index (Russia) along with stock indices of 10 major wheat-importing nations of Russia and Ukraine. The time frame for this study ranges from February 24, 2022 to July 31, 2022. This time frame was selected since it fully examines all of the effects of the crisis. The conditional correlations and volatility spillovers of these indices are predicted using the DCC-GARCH model, Diebold and Yilmaz (2012) and Baruník and Křehlík (2018) models.

Findings

It is found that there is dynamic linkage of agri-commodity of with stock markets of Iraq, Pakistan and Tanzania in short run while stock markets of Egypt, Turkey, Bangladesh, Pakistan, Brazil and Iraq are spilled by agri-commodity in long run. In addition, it documents that there is large spillover in short run than medium and long run comparatively. This signifies that investors have more diversification opportunity in short run then long run contemplating to invest in these markets.

Originality/value

To the best of the authors’ understanding this is the first study to undertake the dynamic linkage of agri-commodity (wheat) of Russia with financial market of select importing counties during the Russia–Ukraine invasion.

The effect of ownership composition on corporate financial performance in the European frontier markets

Purpose

This study investigates the influence of ownership composition on market-based and accounting-based financial performance in the European frontier markets (EFMs), a target region for global investors.

Design/methodology/approach

Ownership composition is defined as shareholders' concentration and structure (i.e. foreign, domestic, state and free-float), whereas financial performance is measured as Tobin's Q and return on assets. The system generalised method of moments panel data estimation technique is employed on a sample of 241 companies.

Findings

Findings reveal that companies from European Union (EU) frontier markets are controlled, on average, by one to five large shareholders. Being a signal of expropriation rationale of majority shareholders regardless of the capital structure, this highly concentrated ownership and decision-making model negatively affects the market-based and accounting-based financial performance of the companies and thereby supports the agency theory in the frontier markets.

Research limitations/implications

The findings provide empirical evidence for authorities, investors, analysts and corporations regarding the effect of ownership percentage and structure in the Eastern European region, assisting also other frontier and emerging markets in corporate governance and other regulatory decisions.

Originality/value

The ownership–performance relationship varies from developed to emerging markets with conflicting results. This study provides evidence on monitoring and expropriation effects of majority shareholders in the context of different categories of shareholders. In doing so, it combines the analysis of both ownership concentration and structure in the EFMs.

Microprudential bank capital regulation in a complex system

This paper analyzes the efficacy of microprudential (bank-level) capital requirements in mitigating failure cascades in a network of interconnected banks. In simulation exercises, microprudential capital requirements redistribute the troubled assets of undercapitalized banks more broadly within the network, reducing the immediate likelihood of individual bank failures but increasing the likelihood of large failure cascades. This effect is strongest for simulation parameters that mimic economic downturns. If banks increase leverage in response to weaker capital requirements, failure cascades increase only minimally. These results suggest that current microprudential capital requirements might be counterproductive to the goal of mitigating bank failure cascades.

A systematic literature review on the determinants of sustainability reporting systems

In the last decade, the use of sustainability reporting as a tool for communicating and reporting on the performance of sustainability objectives by companies has led to a growing awareness of its value and development in the corporate world. Therefore, exploring this phenomenon for a better understanding and identifying its characteristic elements is important. This study aims to systematically review the literature to establish the distinctive elements of sustainability reporting and provide a complete theoretical framework that allows the classification of the drivers that are crucial for adopting sustainability reporting. Through the analysis, we describe the characteristic elements of sustainability reporting in a homogeneous and concise summary. The drivers that result, may prove useful not only in the context of non-financial reporting but also in encouraging adequate economic-business reflections that may inspire new research trajectories for scholars in this field.

Price guidance and discovery of the Chinese stock index Futures: Based on the rising, falling and fluctuating states

Stock index futures have been around for more than 12 years in the Chinese market, but there are conflicting viewpoints on the role of Chinese stock index futures in the market. Many crises, including COVID-19, have heightened the financial system's vulnerability and instability. Do China's stock index futures play a role in stabilizing the market and discovering prices in turbulent times? This study employs a combination of VEC, PT, and IS methodologies to investigate the lead-lag relation and price discovery ability of stock index futures markets. By evaluating price interactions in three different scenarios, we reveal that stock index futures play a prominent role in price discovery, particularly in markets with excessive volatility. However, their impact on price discovery is weaker during stable market conditions. To the best of our knowledge, this study is the first to categorize the Chinese stock market into different states, providing valuable insights into the price discovery function of stock index futures. Our findings have important implications for policymakers and investors, as they highlight the need for increased attention to market manipulation and excessive speculation during volatile market conditions to protect the interests of investors.

Co-movement between Covid-19 and G20 stock market returns: A time and frequency analysis

In our study, we employ DCC-GARCH and Wavelet coherence analysis to examine the co-movement between global covid-19 indicators (cases, recoveries and deaths) and stock returns of main equity markets in G20 countries using daily data spanning between February 2, 2020 and August 28, 2021. Our empirical results show that the co-movement between COVID-19 and G20 stock returns has been switching between negative and positive correlations across the entire time window. The wavelet coherence analysis further reveal that negative (positive) co-movements predominantly exist as lower (higher frequencies) for cases and deaths and are more mixed for recoveries. The findings also show that the short-frequency components correspond to periods around the initial announcement of the initial pandemic and also around the announced of subsequent variants of the COVID-19 virus. Policy and market implications from our study are also discussed.

Are Twitter sentiments during COVID-19 pandemic a critical determinant to predict stock market movements? A machine learning approach

The problem of stock market prediction is a challenging task owing to its complex nature and the numerous indirect factors at play. The sentiments regarding socio-political issues such as wars and pandemics can affect stock prices. The spread of the COVID-19 pandemic continues to take a toll on the economy and fluctuations in sentiment of the concerns about the health impacts of the disease can be captured from the microblogging platform, Twitter. We examined how these sentiments during the Covid-19 pandemic and the health impacts arising from the disease along with other macroeconomic indicators provide useful information to predict the stock indices in a more accurate manner. We developed a machine learning model namely, long-short term memory (LSTM) networks to predict the impact of the Covid-19 induced sentiments on the stock values of different sectors in the United States and India. We did the same predictions using the timeseries statistical models such as autoregressive moving average model and the linear regression model. We then compared the performance of the LSTM and the timeseries statistical models to find that the machine learning model has produced more accurate predictions of the stock indices. The performance of the models across the sectors and between the United States and India are compared to draw economic inferences.

Media coverage and stock market returns: Evidence from China Pakistan economic corridor (CPEC)

The primary source of investor interest that disrupts the financial markets is news that reflects the macroeconomy. This study intends to track changes in investors' positive and negative market attention and their effects on stock market returns by examining the print media portrayal of the China-Pakistan economic corridor (CPEC). We access the daily and weekly coverage of the CPEC by national and international newspapers from the Bloomberg database over the period from January 2015 to December 2019. Using the Harvard psychological dictionary, we categorize the news headlines into positive and negative news sentiments. We then relate the news sentiment to the stock market returns, using quintile analysis, ordinary least squares (OLS), and vector autoregressive (VAR) models. The results show that investors react quickly and significantly to positive news. They pay more for the same stock if the positive news stream increases; hence, the stock market return also increases. In contrast, investors do not react with the same passion to an increase in negative news. These findings are in line with the theoretical rationale of the disposition effect. These outcomes may be useful for active investors and practitioners to devise investment strategies in the presence of the hype surrounding the CPEC in the print media.

The impact and profitability of day trading following the relaxation of day trading restrictions in Taiwan

The relaxation of day trading restrictions in Taiwan at the start of 2016 resulted in a significant increase in day trading volume, which piqued our interest in researching the impact and profitability of day trading, expected (unexpected) day trading, and day trading at high (low) levels of VIX using time series models, with the following key findings. First, we show that a high market trading volume triggers a high day trading volume resulting from liquidity markets that day traders prefer, but a high day trading volume does not trigger a high market trading volume resulting from speculative markets that other market participants don't prefer. Second, contrary to our perception, while the VIX index rises, day trading would be more profitable after the relaxation. We infer that a high VIX index may be accompanied by a volatile market, which may generate profits by widening the intraday spread of a day-tradable stock. Third, as compared with unexpected market trading volume, we reveal that unexpected day trading volume may be more unexpected than market trading volume, being more likely to enhance market volatility and stock returns. These impressive and interesting findings may not be disclosed before the relaxation, which may contribute to the existing literature.

Do the trade credit influence firm performance in agro-industry? Evidence from Thailand

This paper aims to examine the relationship between trade credit and corporate performance. Empirical evidence on the impact of trade credit investment on firm performance remains unclear. For agro firms, the implications of this relationship have not been thoroughly discussed. Using a panel sample consisting of publicly listed agro firms in Thailand for 2001-2020. The sample set consists of 51 Thai-listed firms with 708 firm-year observations. We employ panel ordinary least squares (OLS) regressions and GMM regressions to obtain the estimation results. We find that going to invest in trade credit increases operating performance significantly, which is what the commercial, financing, and transaction theories of trade credit predicted would happen. Furthermore, cost-benefit analysis should serve as a guide for firms' trade credit investment decisions. In particular, firms should be aware of the extra cost of trade credit investment and weigh it against the benefits of improved performance.

Does managerial short-termism always matter in a firm's corporate social responsibility performance? Evidence from China

Using data on Chinese A-share listed firms from 2008 to 2017, we explore how corporate social responsibility (CSR) performance is affected by managerial short-termism and what factors influence the association between the two. First, by employing text analysis in conjunction with machine learning, we construct a new managerial short-termism indicator. Using panel fixed models, we find that managerial short-termism has an adverse impact on CSR performance, and the results are consistent in a series of robustness checks. The heterogeneous test results show that the negative effect is significant only for firms with lower internal corporate governance, for firms in less competitive industries, for firms with less analyst attention, and for state-owned enterprises (SOEs). Additionally, a better institutional environment weakens the negative impact of managerial short-termism on CSR performance. The findings shed light on policy implications for emerging countries.

Information flow between global financial market stress and African equity markets: An EEMD-based transfer entropy analysis

The flow of information between markets is important to guide investors and policymakers in the effective allocation of assets and proactive market regulation, respectively. This study examines the impact of information flow from global financial market stress on the African stock markets using the daily US financial stress index (USFSI) and other advanced economies' financial stress index (OAEFSI) to proxy the global financial stress index. To understand the information flow dynamics across various investment horizons, the ensemble empirical mode decomposition (EEMD)-based transfer entropy is employed. Our findings reveal that African equity markets are highly risky for information flow from global financial market stress. However, we identify diversification prospects based on market conditions for Ghana and Egypt in the short term and Tanzania, Cote D'Ivoire, and Egypt in the medium term. Empirical results also show that the information flow from global financial stress to African stock markets depends on time scales, economic relations, and the state of global financial markets. The findings are important for investors, portfolio managers, practitioners, and policymakers.

Cognitive social capital for knowledge absorption in specialized environments: The path to innovation

The purpose of this research is to empirically analyze how regional specialization influence innovation in enterprises, as well as the mediation effect of absorptive capacity and cognitive social capital, as knowledge diffusion mechanisms. A questionnaire was developed and distributed, obtaining a sample of 197 energy firms in Spain. For the assessment of this data, the PLS-SEM technique, a multivariate analytical approach, has been used. The results show a positive and significant direct effect between the degree of regional specialization and the innovative performance of firms. In addition, the cognitive social capital and absorptive capacity variables show a positive and significant mediation effect in the relationship proposed, as well as between them, thus constructing a double mediation and proving to be relevant mechanisms for knowledge diffusion. Then, it is concluded that cognitive and geographical proximity matters, since enable firms to obtain resources for knowledge upgrading and innovation. Thus, it is crucial for firms to develop their capacity to absorb new external knowledge, as has been evidenced as a key factor to leverage the opportunities of the context in which firms are located. This paper has important implications for the long-standing complex debates about whether regions should develop, primarily whether they should do so through specialization or diversification.

Pension accounting information and firm value: An analysis of FTSE 100 companies

This study is among the first to take known results in pension accounting and use a sample of UK listed FTSE 100 companies to show that the results are mostly the same as in previous research (on the US companies) into associations between pension accounting information and firm value. We investigate the association between published pension accounting information and the market value of a sample of UK listed FTSE 100 companies in the ten-year period 2006 to 2015. We analyse UK listed firms that report under the IFRS accounting framework (IAS 19), which is a contribution to earlier literature that concentrated on US listed firms that report under the US (FASB) accounting framework that has significantly different pension accounting rules to the IFRS accounting framework. Moreover, the analysis is conducted on a sample of firms that used the method of immediate recognition of actuarial gains and losses in other comprehensive income (or the 'Fair Value OCI method') even before mandatory adoption of this method from 2013. We employ a static panel regression analysis on a sample of 70 companies. Empirical findings suggest that there is an association between pension accounting information and firm value, but in some cases, there is less association than there is between other types of accounting information and firm value. Core earnings are value relevant but overall pension earnings (net) are not value relevant although pension costs, pension interest expense and pension income have an association with firm value. Balance sheet numbers have less association with firm value than is the case for core earnings, pension costs, pension interest expense or pension income.

How do accounting records affect corporate financial performance? Empirical evidence from the Indonesian public listed companies

Previous studies demonstrate that accounting choices could, directly and indirectly, affect firm performance. We investigate whether accounting choices and financial ratios could affect firm performance. We extend the financial ratio variables by adding accounting choice and interaction variables. Based on the panel random effect regression analysis of 100 Indonesian public listed firms, we report that activity ratio, leverage, and depreciation method choice tend to be associated with firm profitability. We conclude that higher assets and leverage tend to be associated with higher efficiency and fewer monitoring costs. However, there is a difference in direction between equity and asset for the leverage variable. This may be explained by the existence of premiums (or discounts) in the equity component, but not in the asset component.