Market Performance Of Companies Research Articles

Intangibles and performance in oil and gas industry

PurposeThe purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their intangibles.Design/methodology/approachThe research utilized publicly available data on global oil and gas companies from 2000 to 2015. Panel data analysis was used to assess the relationship between intangibles (measured by Calculated Intangible Value (CIV)) and financial and market performance of these companies.FindingsResults show that intangibles had a significant impact on firm performance in multiple financial measures. Firms’ intangibles also influence their market capitalization, indicating that the financial markets discount such information in their pricing.Research limitations/implicationsAlthough the impact of intangibles on corporate performance is found to be significant, the size of that impact is small, suggesting that significant increase in the size of intangibles would only lead to a modest increase in corporate performance. Additionally, the research sample was limited to the top oil and gas firms listed in the Fortune 2000 global list and limits the generalization of the findings. Despite these limitations, the research provides greater confidence in using CIV to assess intangibles in organizations.Practical implicationsThis research highlights the importance and ways of measurement of intangibles for managers in oil and gas companies and its significance for their firms’ performance.Originality/valueThe paper fills the gap in the literature in the assessment of intangibles in the oil and gas sector, as well as in the assessment of using CIV to measure the impact of intangibles on company performance.

DAMPAK STRUKTUR MODAL PADA SENSITIVITAS PENERAPAN KOMPENSASI OPSI SAHAM KARYAWAN TERHADAP KINERJA

This study aims to test whether the management that receive compensation in the form of stock options having an positive impact on company performance. This study considers the external performance measurement by identifying Cumulative Abnormal Return (CAR). In addition, this study aims to test whether the company's capital structure affects the sensitivity level of employee stock option compensation and firm performance. Capital structure is measured with debt to equity ratio. The result indicates that the proportion of Employee Stock Option Plan (ESOP) influence company performance in accordance with the predictions. This shows that the more stock options offered to employees then came a sense of belonging which resulted in more motivated managers to improve company performance. Furthermore, the higher the market performance of companies that can be achieved, the higher the profit (gain) will be obtained by the recipient of stock options. In addition, this study also shows that the impact of stock option grants at the company's performance declined with the greater capital structure of liability. This shows that the capital structure of liabilities will lower the sensitivity level of employee stock option compensation and firm performance. The higher the company's liabilities would reduce the rights of the owner of the dividends each period in accordance with the ownership of shares held since the company must take into account the interest costs to be paid to the creditor.

Income smoothing and market performance: empirical study on manufacturing companies listed in Indonesia stock exchange

In the age of modern accounting, the era where income information is viewed to be no longer the main information that investor seeks, income smoothing is proven to be still existing. This study aims to find why income smoothing (IS) still exists in Indonesia Stock Exchange (IDX) by analyzing its effect on the market performance (MP). The study divides MP into three perspectives: market response is representing current investor; market risk (MR) is representing potential investor; and market value (MV) is representing the management. Purposive sampling method is applied in this study and 65 companies are examined throughout 2011–2013.Using three models to analyze each of the relation, the results shows that IS only significantly affects the MP of companies in the aspect of market response, while the other aspects, MR and MV, yield insignificant results.

How does Dividend Policy Impact the Value of the Firm?-An analysis of selected Indian Sectors

One question that has bothered most finance managers over several decades is the decision on whether to pay or not to pay dividends. Dividend decisions are important because they determine what funds flow to investors and what funds are retained by the firm for investment. Dividend yield has a significant positive effect on share price while retained earnings ratios have a significant negative effect on it. The purpose of the study is to determine short term and long term the effects of dividend policy on the market performance of company. Dividend policy is a widely-researched topic in the field of investments and finance but still it remains a mystery that whether dividend policy affects the stock prices or not. There are many internal and external factors, which simultaneously affect stock returns and it is almost impossible to segregate the effect of each. This study mainly focuses on analyzing the impact of dividend policy on the value of the firm. For analyzing purpose of this study, short-term effect and long term effect on market price of company or market performance of company were examined. To understand the effect of dividend declaration a sample of various companies from various industries, comes under nifty50 was taken for the study. A long term and short term analysis was done to understand the effect of dividend declaration on market value. In this study attempts were made to find out correlation between dividend declaration and changes in market value of the share. The research is purely based on secondary data. It was found in this study that dividend policy is an important tool to affect the market performance of company but its impact has become irrelevant due to available of other factors in market.

Folga Financeira e Desempenho de Mercado: Uma Análise em Empresas do Brasil e da Itália

The aim of the study was to verify the effect of financial freedom on the market performance of companies in Brazil and Italy, by using a descriptive methodology given the aim to document procedures as well as to address the problem from a quantitative approach. The sample comprised 47 Brazilian companies and 29 Italian companies, which presented all the necessary information to carry out the study. The period of analysis corresponded to the years 2010 to 2013. As statistical techniques, we used a descriptive analysis and panel data applied in 5 regression equations. It was observed that the financial slack has a greater impact on the market performance of Italian companies, than on Brazilian companies. It was noted that the positive effect of the financial slack in Brazil’s business scenario contributed to the increase of the market-to-book, but on the Italian scenario the opposite effect was observed. Thus, it was deduced that the effect of financial freedom on market performance depends on the environment in which firms are inserted.

IMPLIKASI PENGUNGKAPAN BEBAN CORPORATE SOCIAL RESPONSIBILITY PADA KINERJA PASAR PERUSAHAAN YANG TERDAFTAR DI BEI

The purpose of this study was to obtain empirical evidence of the influence of CSR disclosure of expenses on the market performance of companies listed on the BEI and examine the differences in market performance of financial and non-financial companies that revealed the expenses of CSR in BEI. The population in this study are the financial and non financial companies listed on the Stock Exchange in 2011-2015. The sampling method that used is purposive sampling method. The samples consisted of 11 financial companies and 18 non-financial companies. Analysis technique used is simple linear regression test and independent sample t-Test. The test results show there is a significant negative influence between the disclosure of CSR expenses with market performance of the companies listed on the BEI. Also found that there are differences in the performance of financial markets and non-financial companies that disclose their CSR expense.

Corporate Social Responsibility Ratings and Financial Performance: An Analysis of Sub-Ratings in Europe

In a previous research article, we studied the relationship between aggregate Corporate Social Responsibility (CSR) ratings issued by the European rating agency, Vigeo, and accounting and stock market performance of a sample of European companies. Because the Vigeo CSR ratings are the sum of sub-rating scores assigned in the following six categories: Business Behavior (BB), Community Involvement (CIN), Corporate Governance (CG), Environment (ENV), Human Resources (HR), Human Rights (HRts), the purpose of the present article is to perform a detailed analysis of the Vigeo sub-ratings in order to confirm and extend the findings of our prior research. The overall objective of the present study is to deepen our investigation into the sub-ratings by measuring their impact on accounting and stock market performance by first using a “Prospective” approach in which the subsequent performance of the sample companies is predicted by their CSR sub-ratings. We then perform a “Retrospective” analysis which looks at the accounting and stock market performance of companies at time N-1 as compared with the CSR sub-ratings issued at time N (in other words, whether the performance predicts the ratings). With respect to the Prospective approach, a negative relationship is found between the CSR sub-ratings and the subsequent accounting and stock market performance of the sample companies. The results of the Retrospective analysis indicate that the sub-ratings are: (1) positively related to the market capitalization (i.e. size) of the sample companies; (2) negatively related to the difference between the risk of the companies and the average risk of their industry sectors; (3) negatively related to the difference between the market return of the sample companies and the average market return of the companies in the sector. The Retrospective approach confirms the three concepts developed in our previous work namely “political visibility”, “priority” and “downgrading”. In addition, certain sub-ratings, namely: environment (ENV), human resources (HR) and community involvement (CIN) dominate in the aggregate ratings, possibly due to their greater visibility and ease of measurement as compared with corporate governance (CG), human rights (HRts), and business behavior (BB), which are more difficult to measure and require a deeper understanding of the individual companies.

How is managerial remuneration determined in India?

PurposeThe purpose of this paper is to analyse the impact of company performance, governance structure and ownership structure in determining the managerial remuneration for 134 listed companies in India over the years 2003-2012.Design/methodology/approachRemuneration paid to the board of directors of companies is taken to represent the managerial remuneration. Exogeneity among the company performance measures is verified with the endogtest suggested in Baum et al. (2007). A fixed effects panel regression with clustered standard errors is employed after checking for the presence of heteroskedasticity, autocorrelation and cross-sectional dependence in the data.FindingsThe study reveals that managerial remuneration increases as the accounting performance of companies improves, whereas the market performance of companies has no significant association with managerial remuneration. The study also shows that foreign institutional shareholding is significantly and positively related with managerial remuneration in India.Research limitations/implicationsThis study highlights the various factors which affect the determination of managerial remuneration in India. These findings can be used as inputs by regulatory authorities in framing and improving governance norms regarding managerial remuneration. This study also suggests that factors other than the number, the independence and objectivity of independent directors are more important in determining managerial remuneration.Originality/valueThe present study proposes more reliable results, obtained through a fixed effects panel regression model with clustered standard error estimates and also checks endogeneity of performance measures with the endogtest, which is the appropriate test to use for verifying endogeneity in panel data.

DAMPAK STRUKTUR MODAL PADA SENSITIVITAS PENERAPAN KOMPENSASI OPSI SAHAM KARYAWAN TERHADAP KINERJA

This study aims to test whether the management that receive compensation in the form of stock options having an positive impact on company performance. This study considers the external performance measurement by identifying Cumulative Abnormal Return (CAR). In addition, this study aims to test whether the company's capital structure affects the sensitivity level of employee stock option compensation and firm performance. Capital structure is measured with debt to equity ratio. The result indicates that the proportion of Employee Stock Option Plan (ESOP) influence company performance in accordance with the predictions. This shows that the more stock options offered to employees then came a sense of belonging which resulted in more motivated managers to improve company performance. Furthermore, the higher the market performance of companies that can be achieved, the higher the profit (gain) will be obtained by the recipient of stock options. In addition, this study also shows that the impact of stock option grants at the company's performance declined with the greater capital structure of liability. This shows that the capital structure of liabilities will lower the sensitivity level of employee stock option compensation and firm performance. The higher the company's liabilities would reduce the rights of the owner of the dividends each period in accordance with the ownership of shares held since the company must take into account the interest costs to be paid to the creditor.

International Power Plc: Financial Performance in the Global Power Industry

This case illustrates ratio analysis using financial data for a global power company. It is best suited for an introductory discussion of ratio analysis for both the cross-section and time-series. Ten years of standard ratios pertaining to profitability, efficiency, liquidity, solvency, capital structure, and market multiples are provided. The case highlights the correspondence between firm performance and equity values. Excerpt UVA-C-2254 Rev. Feb. 26, 2014 International Power PLC: Financial Performance in the Global Power Industry In early April 2006, Ginny Lawson was approached by Don Gathers, director of research for First Capital Financial. Lawson was an associate analyst working directly under Gathers. Her role with the firm was to build financial models and projections for investment opportunities. Gathers instructed Lawson as follows: Ginny, one of my clients is interested in taking a substantial equity position in International Power. I know very little about it. You know I place a high priority on screening companies based on return on equity and earnings growth, but International Power has been underperforming on both of these dimensions. Its price multiples seem a bit rich. Do me a favor and pull together a summary of how the company has been using its capital, any trends relating to the company's liquidity and profitability, and how the financials tend to correlate with the company's market performance. I'll need this by early tomorrow; nothing fancy, just a cursory understanding of the company's financial drivers. . . .

Revolving doors: are they valued in the Spanish stock market?

Purpose The purpose of this paper is to examine the effect of political connections in the value of companies listed on the Spanish stock market. Design/methodology/approach The authors study two issues on this topic: the impact on the company value of the appointment as director of an ex-politician through an event study; and the long run stock market performance of companies with political connections. The authors employ a sample of listed firms in the Spanish stock market for which the authors collected data about their political connections. The authors perform the study during a wide period (1996-2011), comprising four legislatures. Findings The results show that from the market perspective the value ex-politicians bring to the company outweigh their costs, especially in times of crisis or economic recession. Originality/value Given the concern of regulators and legislators to increase transparency and good governance of companies, this paper shed light on the role that politicians play on the company boards and and their contribution to their value.

CEO age and gender: Subsequent market performance

AbstractThe issue of CEO age and gender vs. concurrent performance is extensively examined, but the association with subsequent performance has limited treatment in the financial literature, and with conflicting findings. In the current study, we examine the association between CEO age and gender, and subsequent company market performance using a more recent set of observations and the standard four-factor model to estimate future cumulative abnormal shareholder returns. We find that subsequent abnormal shareholder returns are marginally significantly higher for female CEOs than for their male counterparts, but no material pattern is observed between CEO age and subsequent abnormal shareholder return performance.

Tracking the Market Performance of Companies That Integrate a Culture of Health and Safety: An Assessment of Corporate Health Achievement Award Applicants.

The aim of this study was to assess the hypothesis that stock market performance of companies achieving high scores on either health or safety in the Corporate Health Achievement Award (CHAA) process will be superior to average index performance. The stock market performance of portfolios of CHAA winners was examined under six different scenarios using simulation and past market performance in tests of association framed to inform the investor community. CHAA portfolios out-performed the S&P average on all tests. This study adds to the growing evidence that a healthy and safe workforce correlates with a company's performance and its ability to provide positive returns to shareholders. It advances the idea that a proven set of health and safety metrics based on the CHAA evaluation process merits inclusion with existing measures for market valuation.

An industry analysis of the power of human capital for corporate performance: Evidence from South Africa

Even in industrialised emerging economies, the value-generating competencies of a workforce, known as its human capital efficiency, are a key resource for commercial success. The objective of this research is to empirically investigate the relationship between human capital efficiency (as measured by value-added human capital) and the financial and market performance of companies listed on the Main Board and Alternative Exchange (ALT-X) of the Johannesburg Stock Exchange. Return on assets, revenue growth and headline earnings per share were used as financial performance indicators; while market-to-book ratio and total share return were used to measure market performance. Multivariate regressions were performed, with panel data covering 390 companies in the financial, basic materials, consumer services, consumer goods, industrial and technology industries from 2001 to 2011. First, human capital efficiency was found to have no effect on the market performance of listed companies in South Africa. Secondly, higher human capital efficiency was found to result in the extraction of greater returns from both tangible and intangible assets in all industries. Thirdly, higher profitability was found to be associated with higher human capital efficiency in almost every industry in South Africa, with the exception of the technology industry, where human capital efficiency was found to be independent of headline earnings per share. Finally, higher revenue growth was found to be positively associated with human capital efficiency in those industries which are not consumer-driven. In the consumer-driven industries, human capital efficiency contributes to bottom line profitability even though it is not a driver for revenue growth. Overall, the results of this study confirm that human capital efficiency enhances a company’s financial performance, whether it be through a greater capacity for production and service delivery, tighter cost controls or better use of company resources. Management in all South African industries are encouraged to develop the value-creating abilities of their employees through employer-driven personnel enrichment and training programs and by incentivising workers to pursue further education.

Regional equity market conditions and cross-border mergers and acquisitions (M & A)

Purpose – Do regional equity market conditions (bear market) affect the financial performance of firms involved in cross-border mergers and acquisitions (M & A)? If so, is there a clear difference between inward and outward M & A in selected regions? The author addresses these questions using a sample of cross-border M & A between 1990 and 2013 in three major geographical regions of the emerging markets: Brazil, Russia, India, and China (BRIC), Eastern Europe, and Africa. The author finds that regional equity market conditions – such as bear equity conditions – along with direction of the cross-border M & A (inward vs outward), and differences in economic fundamentals among these regions carry valuable information and have real effects on market reactions to the announcement of cross-border M & A transactions. The paper aims to discuss these issues. Design/methodology/approach – Using an empirical approach, the author takes a regional perspective, with emphasis on three regions (BRIC, Eastern Europe, and Africa), and aim to determine the impact of the state of the regional equity market (bear stock market), and direction and duration of the M & A on market reactions to the announcement of cross-border M & A. Findings – The author documents the impact of regional equity market conditions on the financial performance of firms involved in cross-border M & A. The author underlines that differences in economic fundamentals among regions carry valuable information and have real effects on the performance of target firms. Practical implications – On the one hand, merger arbitrage investors are keen to learn how to profit and position their investments accordingly during those periods. Therefore, this study has also put the limelight on the underlying factors that influence the market reaction around the M & A announcement at the regional level and clearly shows the additional benefits of regional market conditions, direction of the transactions, and the timing to highlight the positive gain of those equity investments regarding the emerging markets. On the other hand, as the purpose of the study is to delve into the market reactions to the M & A announcement while taking into consideration some relevant factors such as regional equity market conditions to assist companies’ managers and CEOs to effectively choose the right time. Social implications – By incorporating the result presented in this study, another “family” of mutual funds, beyond just the combination of risky assets and the riskless asset is being introduced. Those investment portfolios which take into account merger and/or any opportunistic strategies are tailored more to the needs of various clienteles. For assisting the analyst and portfolio manager, the intuitive character of the result makes it versatile and easy to use by investment firms as an additional decision tool. Originality/value – To the author knowledge, this is the first study that delves into the market performance of companies involved in cross-border M & A in the emerging markets by taking a regional perspective and aiming to determine the impact of the state of the regional equity market (bear stock market) on the M & A. It offers additional support to those institutional investors who are pursuing international diversification across various countries including emerging markets such that bear equity conditions (recessions in the regional stock markets) have an additional negative impact and a real effect on the performance of target firms.

GlencoreXstrata…The Profitable and Untethered March to Global Resource Dominance!

Motivated by the economic causes and effects of their merger in 2013, we study the expansion strategy deployment of Glencore International plc. and Xstrata plc., before and after their merger. While both companies went through a series of international acquisitions during the last decade, their merger is strengthening effective vertical integration in critical resource and commodity markets, following Hymer's theory of internationalization and Dunning's theory of Eclectic Paradigm. Private existence of global dominant positioning in vital resource markets, posits economic sustainability and social fairness questions on an international scale. Glencore is alleged to have used unethical business tactics, increasing corruption, tax evasion and money laundering, while attracting the attention of human rights organizations. Since the announcement of their intended merger, the company's market performance has been lower than its benchmark index. Glencore's and Xstrata's economic success came from operating effectively and efficiently in markets that scare off risk-averse companies. The new GlencoreXstrata is not the same company anymore. The Company's new capital structure is characterized by controlling presence of institutional investors, creating adherence to corporate governance and increased monitoring and transparency. Furthermore, when multinational corporations like GlencoreXstrata increase in size attracting the attention of global regulation, they are forced by institutional monitoring to increase social consciousness. When ensuring full commitment to social consciousness acting with utmost concern with regard to their commitment by upholding rules and regulations of their home or host country, they have but to become quasi-utilities for the global industry.

The impact of intellectual capital on companies' market value and financial performance

Intellectual capital determines growth potential, affects above average returns, and is a source of competitive advantage for firms in an information economy. Thus, this study investigated the relationship between the intellectual capital and market and financial performance of companies listed on Belgrade Stock Exchange (BELEX) in Serbia. The research sample consisted of 42 enterprises that made BELEXline index. The period of the research covered five years (2010-2014). Two research hypotheses were tested and partially confirmed: the impact of the intellectual capital of Serbian listed firms on their market performance and on their financial performance. According to research results, human capital and physical capital positively affect market performance of companies. When analyzing financial performance, human capital significantly affects return on equity and return on assets, whereas structural capital affects neither market nor financial performance, except in the case of employee productivity. On the other hand, physical and financial capital of companies are less important for employee productivity, unlike the human and structural capital.

An industry analysis of the power of human capital for corporate performance : evidence from South Africa

Even in industrialised emerging economies, the value-generating competencies of a workforce, known as its human capital efficiency, are a key resource for commercial success. The objective of this research is to empirically investigate the relationship between human capital efficiency (as measured by value-added human capital) and the financial and market performance of companies listed on the Main Board and Alternative Exchange (ALT-X) of the Johannesburg Stock Exchange. Return on assets, revenue growth and headline earnings per share were used as financial performance indicators; while market-to-book ratio and total share return were used to measure market performance. Multivariate regressions were performed, with panel data covering 390 companies in the financial, basic materials, consumer services, consumer goods, industrial and technology industries from 2001 to 2011. First, human capital efficiency was found to have no effect on the market performance of listed companies in South Africa. Secondly, higher human capital efficiency was found to result in the extraction of greater returns from both tangible and intangible assets in all industries. Thirdly, higher profitability was found to be associated with higher human capital efficiency in almost every industry in South Africa, with the exception of the technology industry, where human capital efficiency was found to be independent of headline earnings per share. Finally, higher revenue growth was found to be positively associated with human capital efficiency in those industries which are not consumer-driven. In the consumer-driven industries, human capital efficiency contributes to bottom line profitability even though it is not a driver for revenue growth. Overall, the results of this study confirm that human capital efficiency enhances a company’s financial performance, whether it be through a greater capacity for production and service delivery, tighter cost controls or better use of company resources. Management in all South African industries are encouraged to develop the value-creating abilities of their employees through employer-driven personnel enrichment and training programs and by incentivising workers to pursue further education.

Research on the Merger and Acquisition of Listing Corporation -A case Study of M & A Enterprise Knowledge Assets

M & A is an important means for enterprises to achieve the rapid growth and development, is one of the important strategy for continuous operation in the process of company. M & A of knowledge assets is a kind of business means of rapid access to core technology and knowledge. More and more enterprises want to strengthen their ability through the M & A of other knowledge assets of enterprises, to enhance the market competitiveness of enterprises. With the development of M & A of knowledge assets, the enterprise wants to use the unique knowledge assets to increase the listed company's market performance and improve the financial structure of listed company. This paper draw some conclusions through the study of Chinese listed company which have taken knowledge assets mergers and acquisitions, to help people find some problems in the process of knowledge assets in mergers and acquisitions of listed companies, in order to provide some reference for China's listed companies in the M & A of knowledge assets.

The Tangled Web of Agricultural Insurance: Evaluating the Impacts of Government Policy

This paper examines the effects of changes in major elements of the U.S. federal crop insurance program on the structure of the agricultural insurance industry. We model the interactions between farmers, insurance agents and insurance companies. Two symmetric equilibria are determined: one with competitive insurance companies and one where insurance companies form a collusive monopsony. We evaluate how marginal changes in government policy (changes in the premium subsidy rate, A&O subsidy rate, and loading factor) affect the insurance premium rate, agent compensation rates, agent effort levels, and market demand for crop insurance. Conditional on no prior government policy, farmers prefer a marginal increase in the premium subsidy rate. This change has the lowest associated net social cost, but is the policy least preferred by insurance companies. The insurance companies’ most preferred policy is a marginal increase in the A&O subsidy rate, which has the highest associated net social cost, the highest cost to the government, and does not benefit farmers. We also evaluate the consequences of changes in crop prices. If the market for insurance agent services is competitive, then a change in crop prices does not change agent compensation rates, but otherwise the agent compensation rate will change. This result suggests an empirical test regarding insurance company market performance.