Athens Exchange Research Articles

Marketing's Contribution to the Profitability of Greek Enterprises During the Economic Crisis.

The state of economic disposition that Greece has been since 2009 is a focal point in Economic science for further research. Marketing is a function of a great importance for companies’ prosperity. Also Alay Kohli and Bernard Jaworski proved in their paper that the correlation of Marketing and profit is positive and stronger in a “weak” economy. This paper aims to examine the relationship of Marketing Expenses with the Total Sales and with the Gross Profit along with the changes that may happen in the period of Crisis in Greece. The methodology of the study employs the judgmental sampling because not every company provides the needed financial information. The relationship of the variables examined with the linear regression, mainly because this method gives insights in the contribution of the independent variable in the variability of the dependent and also gives the quantitative relationship between the variability among them. The sample of this study consists of 140 from the total of 254 companies of the Athens Exchange Stock. The findings of this paper shows that marketing is the main factor that determines the profitability of the companies and this relationship tends to be stronger in the crisis period in contrast to Return On Marketing Investments ratio that gradually decreased for the same period, this fact reveals that companies failed to change their Marketing Mix so to adapt with all changes that the economic crisis brought in the consumer behavior. For the investors decisions this paper having examined the relationship between Marketing Expenses and Gross Profit and the variance of the ROMI ratio for 2005 to 2011 advices them to be more careful when ROMI changes dramatically from one year to another, marketing demands time for consumers to be acquaint with.

DEA performance assessment of Greek listed metallurgical firms

Purpose – This paper aims to assess two distinct aspects of performance in terms of technical (sales) efficiency and efficiency in market value generation of a sample of Greek metallurgical firms listed on the Athens Exchange by using data envelopment analysis (DEA). Design/methodology/approach – Both aspects of performance are measured by employing the DEA BCC model, combined with bootstrap and generalized proportional distance function (GPDF). Statistical analysis is performed to investigate whether there is a positive link between the two examined performance dimensions. Findings – Inefficiency is uncovered in both performance dimensions, but there is a lower level of performance in market value generation than in technical efficiency. Correlation analysis results do not point out positive links between performance measures for the sample firms. Research limitations/implications – The derived performance measures allow firm managers to set their own priorities and to seek out improvements along the two dimensions of performance; moreover, they may contribute to the reduction of information asymmetry among investors. Originality/value – This paper is one of a few that investigate the link between DEA-based sales performance and performance in market value generation. It contributes methodologically through the adoption of fundamental analysis principles in estimating efficiency in the two performance dimensions and the development of a DEA efficiency model in the presence of negative data.

Liquidity Efficiency in the Greek Listed Firms

The scope of this paper is to investigate the liquidity efficiency of the Food and Beverage listed firms in the Athens Exchange, for the period 2006-2009, following a two stage analysis. In the first stage, Data Envelopment Analysis is employed to estimate liquidity efficiency for each firm of the sample. The results are consistent with the equivalent findings of the authors' analysis with financial ratios for the same period. The DEA analysis is validated by ordinary least squares (OLS) and the results prove that the regression equation can be used to evaluate a new liquidity efficiency for the firms of the specific sector. In the second stage of the analysis a Tobit regression model is applied in order to identify determinants of firms' liquidity efficiency. According to the authors' findings, a number of firms operating factors, like financial leverage, operating cost, firm size and Return on Equity to Return on Total Assets, have a significant impact on liquidity efficiency. In addition, the results of the Tobit regression model confirm the assumptions which are related to the links and their signs between liquidity efficiency and the aforementioned variables.

The adoption of IFRS in publicly listed enterprises of high and medium capitalization and the impact of the size of the audit firm in Greece

In 2002, developments in the global markets during the past decades have highlighted the need for common accounting standards among companies all around the world so as the financial statements to be comparable. From 2005 onwards the Greek Companies listed on the Athens Exchange was an accounting “revolution” of the 21st century, given the difference in philosophy between the Greek GAAP and the International Accounting Standards-IAS (next, IFRS). This study evaluates the implementation of IFRS on the financial statements of Greek publicly listed companies of high and medium capitalization, which are companies that are included in the FTSE 20 and FTSE 40 indexes of the Athens Stock Exchange-ASE, respectively. Also, for those firms we examined the effect of the size of the audit firm. The research was conducted based on the analysis of thirteen ratios. According to our analysis only few of the ratios have changed significantly. Finally, regarding the impact of the size of the audit firm the results reveal controversy with the present bibliography concerning “Big 4” in comparison with “non-Big 4” firms in Greece

Does the Financial Crisis Influence the Month and the Trading Month Effects? Evidence from the Athens Stock Exchange

The aim of this study is to examine the month and the trading month effect under changing financial trends. We choose the Greek stock market to implement our assumption because there are clear and long term periods of financial growth and recession. Daily financial data from Athens Exchange General Index for the period 2002-2012 are considered. The paper employs several linear and non-linear models, although the TGARCH asymmetry model best fits in this sample and for this reason we mainly present the TGARCH results. Empirical results show that changing economic and financial conditions influence the calendar effects. Especially, the trading month effect totally changes in each fortnight according to the financial trend. On the other hand, in Greece the January effect exists during the growth periods, although it does not exist when the financial trend changes. The findings are helpful to anybody who invest and deals with the Greek stock market. Moreover, they may pave the way for an alternative calendar anomalies research approach, so it may be useful to investors who take into account these anomalies when they draw their investment strategy.

The impact of IFRS on ratios of listed and new listed companies of Athens Exchange

In this study we are researching the effect of the implementation of International Financial Reporting Standards (IFRS) on financial ratios of listed companies of Athens Exchange (AE). Emphasis is given to the differences between Greek Accounting Standards (GAS) and IFRS and their impact on the calculation of financial ratios which are based on financial statements prepared in accordance with the first or the second accounting standard. Therefore, the study was applied to two samples of companies. The first sample includes companies that have been listed in AE for years and the second sample includes companies that have recently been listed in AE . Considering the particular characteristics of each group of companies, we are examining the probability of quantitative differentiations in financial ratios due to the transition from the one accounting standard to the other. The results of the research results showed that both samples of companies, when not influenced by other factors, do not have significant differences in their behavior.

THE IMPACT OF THE GREEK ECONOMIC CRISIS ON THE GREEK CONSTRUCTION COMPANIES. BACK TO BASICS: THE STATISTICAL COST ACCOUNTING MODEL

This study applies to the statistical cost accounting model to capture the impact of the Greek economic crisis on the returns of the Greek construction sector using the published financial statements of the construction firms listed on the Athens Exchange during 2005-2011. The evidence from our analysis suggests that the construction sector has been affected by the Greek crisis since there is a great decrease of the construction activities. According to our results, our findings support the theoretical model and reveals that there is a negative impact on the earnings due to the underemployment of the fixed assets. Additionally, we find that the cash and cash equivalent items do not actually help our sample firms to produce profit and the most expensive item of the balance sheet is the non financial short term liabilities.

THE FACTORS THAT AFFECT THE DIVIDEND POLICY OF THE GREEK LISTED FIRMS PRIOR TO THE ECONOMIC CRISIS: A COMPARISON TO NYSE, NASDAQ, NORWEGIAN AND U.K. FIRMS”

This study presents, analyzes and compares the factors affecting the dividend policy of the Greek listed firms, prior to the Greek economic crises, to NYSE, NASDAQ, Norwegian and U.K. firms. Our empirical investigation has a dual objective, to record the dividend policy of the Greek firms and to compare their dividend choices to other, more financially mature, markets. We sent to all Athens Exchange listed firms a detailed questionnaire concerning their dividend choices. Our findings proved to be very interesting since the average listed Greek firm shares the same opinion with the average firm of the compared studies in the following areas: Price affection, risk bearing, past dividends’ pattern and agency costs. Some of our findings proved to be quite close with some of the results of the compared studies in the following subjects: The sector of the company, the target payout ratio, the financing ability and the information content of dividends. Finally, some of our findings are in contradiction to some of the results of the previous studies, these are: The impact of taxation on dividends and the legislation framework.

Working and Features of Stock Market of Greece

The Paper discusses the existing stock market in Greece, its history and working. The Athens Exchange which is the oldest Stock Exchange in Greece has been studied.

Modeling Profitability and Stock Market Performance of Listed Construction Firms on the Athens Exchange: Two-Stage DEA Approach

AbstractThe purpose of this paper is to evaluate the performance of a sample of nineteen construction firms listed on the Athens Exchange by applying a two-step procedure. In the first step, data envelopment analysis (DEA) is used to model performance in two dimensions: profitability efficiency and efficiency in the market value-generating process. This allows the independent identification of the most efficient level of input in minimizing resources and the most efficient level of output in maximizing market value, various benchmarks, and the local returns to scale patterns of the firms of the sample in both performance dimensions. Moreover, it is possible to examine whether a correlation exists between the performance efficiency scores. In the second step, regression models are used to identify the drivers of performance. Performance inefficiency is uncovered in both dimensions, but the real problem of inefficiency of the sampled firms is the lower level of performance in the market value-generating pro...

Modelling profitability and effectiveness of Greek-listed construction firms: an integrated DEA and ratio analysis

Existing research on construction performance measurement is dominated by project level studies, and the firm stakeholders require the development of models that compare performance in terms of efficiency. A new framework that integrates data envelopment analysis (DEA) and ratio analysis using a two-step approach is described to evaluate performance in terms of profitability and effectiveness of a sample of construction firms listed on the Athens Exchange. In the first step, profitability and effectiveness are assessed by employing DEA and by using the profit margin (i.e. income-to-sales ratio), respectively. In the second step, a Tobit and an ordinary least squares model are used in order to identify the drivers of profitability efficiency and effectiveness, respectively. Results do point out positive links between profitability efficiency and effectiveness. Profitability inefficiency can be explained by the size and expenses-to-total revenue ratio, whereas effectiveness can be explained only by the latter explanatory variable. The research framework may benefit not only Greek construction firms, but also firms in other countries to quantify their performance and improve their competitive advantages.

Commonality in returns, order flows, and liquidity in the Greek stock market

Using a unique high-frequency data-set on a comprehensive sample of Greek blue-chip stocks, spanning from September 2003 through March 2006, this note assesses the extent and role of commonality in returns, order flows (OFs), and liquidity. It also formally models aggregate equity returns in terms of aggregate equity OF, in an effort to clarify OF's importance in explaining returns for the Athens Exchange market. Almost a quarter of the daily returns in the FTSE/ATHEX20 index is explained by aggregate own OF. In a second step, using principal components and canonical correlation analyses, we document substantial common movements in returns, OFs, and liquidity, both on a market-wide basis and on an individual security basis. These results emphasize that asset pricing and liquidity cannot be analyzed in isolation from each other.

Mispricing in Stock Index Futures Markets – the Case of Greece

This study investigates the pricing efficiency of FTSE/ATHEX-20 index futures contracts and examines whether arbitrage profits exist in the Greek market. By comparing ex-post mispricing with round-trip total transaction costs faced by different groups of market participants, the empirical investigation suggests that profitable arbitrage opportunities are likely to be common in the Athens Exchange. The current paper also documents and tests the factors that determine the occurrence and the magnitude of the arbitrage opportunities in the Greek futures market. The findings suggest that variables, such as futures maturity, dividends, volatility, liquidity and short-selling restrictions, explain effectively the cash-futures mispricing.

Short selling and equity returns with full information dissemination

This paper sheds further light on whether short selling can be associated with negative returns in the spot market. It provides evidence for the case of the capital market of the Athens Exchange (ATHEX) that is empirically tested for the first time, during the period 2003–2007. This market possesses certain interesting characteristics, as along with constrained sales it entailed the rare feature of wide short sales transparency. The empirical findings indicate that short selling is associated with subsequent negative abnormal stock returns for the heavily sold short stocks of this market.

Construction properties of equity fund of funds: a preliminary note from the Greek market

This study examines return and risk properties arising from the construction of fund of funds (FoF) portfolios utilising actively managed Greek equity mutual funds. The evidence documents that while average return remains constant as the number of funds included in the FoF increases, risk is decreasing leading to improved generalised Sharpe ratios. At the same time, skewness and kurtosis coefficients present small deterioration. The investments strategy employed for the construction of a FoF plays its role: the choice of funds having good past performance results to FoF presenting properties that outperform not only the simple naive strategy, but also the composite index of Athens Exchange. Finally, the benefits of a FoF are maximised with the inclusion of only a small number of funds.

Relative profitability and stock market performance of listed commercial banks on the Athens Exchange: a non-parametric approach

Relative profitability and stock market performance of listed commercial banks on the Athens Exchange: a non-parametric approach

Firm‐specific and economy wide determinants of firm profitability

PurposeThe purpose of this paper is to examine the determinants of profitability for a sample of Greek non‐financial firms listed in the Athens Stock Exchange for the period 1995‐2003. This is a very important period for the Greek economy on the way to European monetary union (EMU).Design/methodology/approachThe methodologies employed include panel data estimation techniques. This research attempts to exploit the determinants of firm profitability of non‐financial Greek firms listed in Athens Exchange utilizing firm‐specific publicly available accounting variables using panel data estimation techniques rather than cross‐sectional analysis.FindingsAccording to the findings, firm profitability was positively affected by size, sales growth and investment and negatively by leverage and current assets. Additionally, we found that the EMU participation and the adoption of the euro were negatively related to firm profitability.Practical implicationsTaking into account the fact that the Greek economy has undergone significant transformation during the period under examination on its way to join EMU and to adopt the euro currency, a model has been formulated where both firm‐specific and economy wide factors determine firm profitability.Originality/valueThis paper focuses on a less developed and efficient stock market. In contrast to previous studies that did not take into account the convergence of the Greek economy to EMU averages and the subsequent adoption of the euro, this paper analyses data for the pre‐EMU and the post‐EMU periods in an attempt to quantify a potential macroeconomic effect on firm‐specific profitability.

Testing the pecking order theory: the importance of methodology

PurposeThe purpose of this paper is to show that different methodologies may lead to different implications about the validity of the pecking order theory.Design/methodology/approachUsing data from Greek firms as a starting‐point, the paper first investigates whether they follow the financing pattern implied by the pecking order theory and then illustrates that conclusions concerning the pecking order should be carefully shaped by researchers, as the methodology used can be misleading. Two different information sources are used; the first is data derived from the financial statements of the Greek firms listed in the Athens Exchange, while the second comprises the answers to a detailed questionnaire.FindingsIt is shown that a negative relationship between leverage and profitability does not necessarily mean that the pecking order financing hierarchy holds. Analysis should not rely solely on the mean‐oriented regression quantitative analysis to test the pecking order theory, as it refers to a distinct hierarchy.Research limitations/implicationsFurther research should focus on investigating the reasons that underlie actual firm financing.Practical implicationsThe fact that the pecking order is actually a hierarchy makes research in this field more complex. Analysts should consider this special feature of the pecking order approach when analyzing the existence of the pecking order financing pattern. The methodology followed is of crucial importance in the analysis of the existence of the pecking order financing pattern.Originality/valueTo the authors' knowledge, this is the first paper to test the pecking order pattern of financing using simultaneously quantitative and qualitative data, and to compare results and conclusions drawn from these two different types of methodology.

The Arbitrage Pricing Theory and the Capital Asset Pricing Models and Artificial Neural Networks Modeling with Particle Swarm Optimization (PSO)

We examine two stocks of Athens Exchange Stock Market, that of 'Coca-Cola' and 'Compucon'. We analyze the arbitrage pricing theory (APT) model and the Capital Asset Pricing Model (CAPM) and we compare the performance between them. Then we develop a neural network model in Synapse Software with the particle swarm optimization algorithm and show the flexibility of hybrid models and the Synapse software, as the superiority in forecasting performance, in relation to the traditional econometric methodology , like Ordinary least square and ARCH-GARCH estimations.

Application of ARCH-GARCH Models and Feed-Forward Neural Networks with Bayesian Regularization in Capital Asset Pricing Model: The Case of Two Stocks in Athens Exchange Stock Market

In this paper we apply CAPM model in the financial time series of the share prices of Technology-Software Sector in Athens Exchange stock market for the period January 1st of 2002 to June 30th of 2008 for the enterprises Dionic and Coca-Cola. In one stock we apply the OLS method and in the other we apply the a GARCH model because of heteroscedasticity presence. In the following phase we simulate the forecasting results with feed-forward neural networks and we compare the new forecasts with that we obtain by OLS and GARCH estimation. The forecasting period is July 1st to July 24th of 2008.