Share Prices Of Firms Research Articles

Do Tragic Events Make Investors More Pro-social? Evidence from Japan

This article investigates the impact of the 2011 Great East Japan Earthquake on investor responses to corporate social responsibility (CSR) activities in Japan. Employing Propensity Score Matching and Difference-in-Differences analyses, we analyse investor reactions to both positive and negative CSR news pre- and post-earthquake. Our results indicate a significant increase in share prices for firms that reported positive CSR news post-earthquake, thereby highlighting a heightened investor value on CSR during times of crisis. In contrast, negative CSR news showed a more pronounced negative effect in longer term windows. Additionally, industries directly affected by the earthquake experienced a substantial shift in investor sentiment towards negative CSR news. These findings enhance the understanding CSR’s tole in investor behaviour during crises and offer insights into effective corporate strategies in disaster-prone contexts, particularly in Japan’s unique cultural and economic landscape.

How CSR Performance and Financial Report Quality Affect Corporate Share Prices? Case of Indonesia

Purpose: This research intends to investigate the impact of financial report quality and CSR performance on the firm share prices. Methodology/approach: The 78 firms-years observation of LQ-45 public listed companies in Indonesia from 2019 to 2020 is used in this study. The financial report quality is measured by the accrual-based model of earning management, while CSR performance is measured by the amount of CSR spending. The OLS regression is applied to test the hypotheses. Findings: The findings show that there is no effect of financial report quality on the share prices. On the other hand, CSR performance plays an important role in influencing a company’s share prices. CSR performance has a positive effect on share prices. The financial report failed to ensure that there is no existing information asymmetry within the organization. While CSR performance is a form of social-engaged activities in order to achieve social benefits and legitimation. Practical implications: In the context of legitimacy and agency theory, these findings provide fruitful insight into how the firm performance is valued by investors, which is not only based on financial performance but also based on non-financial performance. Originality/value: By providing a new measurement of CSR performance, this study is different to most existing CSR kinds of literature.

Bankruptcy social cost, government intervention and stock price crash risk

This paper examines the relationship between the social cost of bankruptcy and the risk of corporate stock price collapse through a study of China's A-share non-financial listed companies from 2012 to 2022. It is found that the higher a firm's social cost of bankruptcy is, the lower its firm share price crash risk is instead. In addition, the extent to which the social cost of insolvency affects the risk of firm share price collapse is enhanced in regions with less government intervention.

The Zomato dilemma: a realistic growth trajectory and share price fair valuation?

Learning outcomes This case study is related to start-up post-listing investment analysis. Through this case study, students will be able to perform the business analysis guided by the Venture Evaluation Metric tool, perform financial analysis using the discounted cash flow methods and perform investment analysis recommendation with justifications from the business and financial analysis performed above. Case overview/synopsis This case study sets out the study of a scalable start-up, Zomato, which is a successfully listed start-up firm in India. Despite the start-up development success in the pre-listing, the firm has exhibited a continuous unprofitable finance performance in the post-listing and has further experienced a volatile share price performance, both of which have puzzled existing and potential investors. In addition, some analysts are in the opinions that the firm share price valuation have been inflated with overvaluation since in the initial public offering stage and remain traded with overvaluation in the market. Notably, considering the negative indicators mentioned above, investors are concerned about long-term sustainability of the firm business and financial performance. In the context of post-listing investment, the following questions are material to investors: What is the realistic growth trajectory for Zomato in the medium term? What is Zomato’s share fair value in the medium term? Can one see opportunities or risks ahead of investing in Zomato’s shares? What will be the investment strategy for new investors? Complexity academic level This case study is suited to bachelor’s and master’s level in business schools studying entrepreneurial finance analysis. Supplementary material Teaching notes are available for educators only. Subject code CSS 1: Accounting and finance.

Interest Rate and Volatility of Share Prices of Firms Listed at the Nairobi Securities Exchange, Kenya

Purpose: The study sought to establish the effect of interest rate on volatility of share prices of companies listed at the NSE. The study was anchored the loanable funds theory.
 Methodology: The study employed a descriptive research design. The population of the study was the 20 companies listed at the NSE that forms the NSE share index as of December 2022. The study applied census where all the accessible population of all the 20 NSE share index was used. Data was gathered from secondary sources by the aid of a secondary data collection sheet. Data was obtained from financial and statistical reports released by the CBK. Data was analyzed using descriptive and inferential statistics. The descriptive statistical tools included frequencies, percentages, means, variances and standard deviations. Inferential statistic tools included Pearson’s Product Moment correlation and the multiple regression analysis.
 Findings: The findings indicated that interest rate (β3=0.52939, P=003) have significant positive effect on share price volatility. The study recommended that the monetary committee at CBK should maintain stable interest rates in order to encourage borrowing as it would foster investment in the NSE and other sectors.
 Unique Contribution to Theory, Practice and Policy: The recommendation is in line with the Loanable Funds Theory, as it seeks to establish a reliable and advantageous climate for borrowing. This approach allows businesses and investors to make more effective investment plans, as they can predict the cost of borrowing over time. Additionally, the monetary committee at the Central Bank of Kenya (CBK), responsible for setting the policy rate, should take into account how their decisions influence short-term interest rates in the economy. This consideration is important for the well-being of businesses, investors and the Nairobi Securities Exchange (NSE).

Unlocking Investment Opportunities: Role Of Economic Growth on the Relationship Between Accounting Fundaments and Share Price of Firms in North Eastern Nigeria

Accounting fundamentals has been described as one of the key factors considered by investors when taking investment decisions. Previous studies focused on the role of accounting information on share price and completely underestimated the influencing role of real Gross Domestic Product (RGDP) on the relationship. Scholars have suggested that RGDP is important in understanding and explaining the change in share prices. Therefore, this study extended on the Ohlson model to incorporate RGDP so as to examine the moderating role of RGDP on the relationship accounting fundamentals and share price of listed manufacturing firms in Nigeria Exchange Group. The study covers 65 firms listed on the NGX for the period 2012 to 2021. The data for the study was sourced from NGX fact book and the Central bank Bulletin. The methods used for testing the information content of various accounting information were Ordinary Least Squared (OLS), Random Effects Model (REM), Fixed Effects Model (FEM). The findings from the analysis indicate that RGDP has significant moderating role on the relationship between accounting fundamentals and share prices. The study also reveals that Earning per share and Net book value per share and Price Earnings ratio are positively and significantly related to share price of listed manufacturing companies in NGX. Also reveals that PE is positively and insignificantly related to share price of listed manufacturing companies in NGX. On the basis of these findings, it was concluded that RGDP is a determinant for unlocking investment opportunities through accounting fundamentals in NGX. By implication, the reliability of accounting Fundamentals of listed manufacturing companies for investment decision could be enhanced in the NGX when the changing prices of shares are identified, captured, presented and equally published in the financial information of such firms by the preparers of accounti

Responsible Investment and Stock Market Shocks: Short‐Term Insurance without Persistence

AbstractWe investigate the differential effect of the COVID‐19 shock on the share prices of firms with different levels of ESG (environmental, social and governance) scores. Thereby, we analyse whether and to what extent higher ESG ratings provided insurance for investors in the stocks of those firms during this shock. We focus our analysis on the European market, in which ESG investment plays a particularly important role. Using a broad sample of listed firms, we provide mixed evidence. On the one hand, we show that immediately after the start of the shock, firms with a higher ESG score outperformed their peers. On the other hand, this effect faded less than 6 weeks later. Given the quick recovery of the market, our findings support the idea that ESG stocks provide limited insurance and act as a risk‐mitigating device in severe crises.

THE CASE OF INDONESIAN CONSUMER-GOODS INDUSTRIES: THE RELEVANCE OF INTELLECTUAL RESOURCES IN AFFECTING STOCK PRICES

This paper is aimed to investigate the linkage between the internal intellectual resources and firm share prices in the consumer goods sector in Indonesia. The purposive sampling is applied to form the sample data of 96 firms-years of the consumer-goods firms. We analyze the data by implementing the panel regression and bootstrap procedures. Our study finds that investors give positive appreciation towards the value-added human capital and the structural capital. A positive causality between the independent commissioner and the market price of equity is also confirmed. Our study contributes to supporting the resource-based view theory and offers a viewpoint on corporate value factors that investors should consider when making investments.

Earnings surprise and share price of firms in Nigeria

This study examines earnings surprise and share price of firms in Nigeria. It sought to evaluate the impact of earnings surprise in predicting share price of firms. The paper employed the Ohlson valuation model and variants of the model to ascertain the impact of earnings surprise on share price. The sample consisted of 76 listed firms over the period 2010–2020. The study reveals that earnings surprise has a negative insignificant impact on share price. The study further reveals that with the interaction of earnings surprise with the bottom line metrics of book value per share and earnings per share, earnings surprise also has a negative insignificant impact on share price of firms, respectively. The paper provides fact that earnings surprise interacts with book value per share and earnings per share in determining share price. This paper also presents evidence to the fact that investors are not just concerned with the magnitude of book value per share and earnings per share but are also concerned with the quality of the earnings in terms of its surprise. This paper further presents evidence to the fact that investors do not consider magnitude and surprise of earnings in isolation. Rather, the decision is influenced by the fusion of the magnitude and the surprise of the metric.

Adopting IFRS as a Moderating Variable on the Relationship Between Accounting Information and Market Responses

The purpose of this paper is to examine the impact of adopting International Financial Reporting Standards (IFRS) on the relationship between accounting information and market responses. We investigate the impact of the IFRS adoption on financial statements quality and whether this impact, if any, has a positive implication of the capital market (especially, market liquidity and equity value). Data were collected from 147 non- financial firms listed on the Saudi exchange for the period 2015-2019. The findings show that disclosure quality has increased because of IFRS adoption. Moreover, the results find that the adoption of IFRS improves market liquidity and increases the share price of firms listed on the Saudi exchange. Our findings show that adopting IFRS have positive economic implications on the Saudi business environment.

Sustainable business models to create sustainable competitive advantages: strategic approach to overcoming COVID-19 crisis and improve financial performance

PurposeThe purpose of this study is to evaluate whether the implementation of sustainable business models contributes to improving a firm’s performance during a global crisis, such as the one caused by COVID-19. Based on the triple bottom line theory, the paper explores the relation between the creation of value through solid corporate social responsibility (CSR) strategies, United Nations (UN) Global Compact’s (GC) business model proposals and Global Reporting Initiative’s (GRI) reporting scheme.Design/methodology/approachThe present paper studies companies within the European Union, focusing specifically on the long-term impact of using the world’s most widely used standards for sustainability reporting – the GRI’s standards and/or the UNGC management models, as well as on the firm’s performance based on the financial results during COVID-19 crisis. To achieve this goal, the study analyses the share price of firms publicly listed in the FTSEMIB (benchmark index of Italy’s largest trading platform) out of those companies that are implementing the UN and GRI’s tools.FindingsFindings show how a commitment to sustainable business models and long-term CSR strategies can contribute to firm’s ability to overcome periods of economic crisis. Furthermore, implementing GRI standards and UNGC guidelines within the business model seems to have a positive impact in overcoming a hard context such as COVID-19. In addition, it contributes to a better understanding of stakeholders’ needs, consumer profiling and value creation.Originality/valueThis study evaluates firms’ business models, considering the effects of decisions made in the context of COVID-19. The role of UNGC and GRI is evaluated in terms of their contribution to firms’ financial performance and corporate reputation during a context of hardship. Consequently, this study contributes to academia and practice, adding value in areas related to strategic planning and business model design.

Impact of Dividend Policy on Share Price of Listed Ict Firms in Nigeria

This study empirically investigated the impact of Dividend Policy on Share Price of Firms Listed on ICT Sector of Nigerian Stock Exchange. In order to determine the relationship between dividend policy and share price of firms, dividend policy key proxy variables were used in the study, namely; Dividend Payout (DPO), Dividend Per Share (DPS) and Dividend Yield (DY) while Share Price (SP) on the other hand was measured using Market Price of Shares (MPS). Three hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using OLS Model operated with STATA 15. Ex Post Facto Design was adopted and data for the study were obtained from the Nigerian Stock Exchange Factbook and Annual Reports and Accounts of listed ICT firms in Nigeria spanning from 2016-2020. The findings generally indicate that Dividend Payout, Dividend Per Share & Dividend Yield have exerted significant and positive impact on Firms Share Price at 1% significant level. Based on this, the study concludes that dividend policy is capable of influencing firms’ share prices in Nigeria. By this implication, the study supports the relevant theories of dividend policy reviewed in this study as irrelevant theories of dividends do not hold in the case of Nigeria. The study recommends among others that firms’ willing to maximize share price should consistently increase their dividend payment as this sends signal to the investors about the firm’s market performance and financial health.

The Effect of Marketing Investment on Firm Value and Systematic Risk

Analyzing the financial benefit of marketing is still a critical topic for both practitioners and researchers. Companies consider marketing costs as a type of investment and expect this investment to be returned to the company in the form of profit. On the other hand, companies adopt different innovative strategies to increase their value. Therefore, this study aims to test the impact of marketing investment on firm value and systematic risk. To do so, data related to four Arabic emerging markets during the period 2010–2019 are considered, and firm share price and beta share are considered to measure firm value and systematic risk, respectively. Since a firm’s ownership concentration is a determinant factor in firm value and systematic risk, this variable is considered a moderated variable in the relationship between marketing investment and firm value and systematic risk. The findings of the study, using panel data regression, indicate that increasing investment in marketing has a positive effect on the firm value valuation model. It is also found that the ownership concentration variable has a reinforcing role in the relationship between marketing investment and firm value. It is also disclosed that it moderates the systematic risk aligned with the monitoring impact of controlling shareholders. This study provides a logical combination of governance–marketing dimensions to interpret performance indicators in the capital market.

Determinants of Share Price of Listed Firms in Ghana

The price of a company’s share represents investors’ confidence in the future profitability of the company and also used to represent the value of shareholders’ wealth The study examined factors that influence share price of firms listed on the Ghana stock Exchange. The study specifically examined firm specific factors, book ratios and macroeconomic factors that influence share price of listed firms in Ghana. The firm-specific variables include firm size and the firm being a financial institution. The book ratios used in the study include earnings per share, debt ratio, return on assets, return on equity and dividend per share. The macroeconomic variables include economic growth, inflation rate and interest rate. The study sampled 21 firms over a 10-year period, from 2009 to 2018. The study used descriptive statistics, correlation analysis and panel regression analysis to achieve the objectives of the study. The results of the study show that firm-specific variables such as firm size and the firm being financial institution were positive and statistically significant determinants of share price of listed firms in Ghana. The book ratios of debt to asset ratio, return on asset and return on equity were statistically insignificant association with share price of firms listed on the Ghana Stock Exchange. Other book ratios, such as earnings per share and dividend per share, were positively associated and statistically significant with share price of the sampled firms listed on the Ghana Stock Exchange. On the macroeconomic variables, only economic growth was positively associated with share price and statistically significant at 10% significance level. The other variables – inflation and interest rate – were statistically insignificant. The results show that book or investment ratios are the main determinants of share price for firms listed on the Ghana Stock Exchange.

Firm Performance and Corporate Social Environmental Initiatives in the Wake of a Health Pandemic

The study re-examines the relationship between firm share price performance and Corporate Social Environmental Reporting (CSER) initiatives in the wake of a global health pandemic. A comparative analysis was done between the contributions made by listed and non-listed firms in Nigeria towards the pandemic. A comparative analysis of the share price (SP) of listed companies was carried out before the announcement of the pandemic, after the announcement of the pandemic and COVID -19 contributions. A panel regression analysis was conducted. It involved a sample of 70 listed firms in the Nigerian Stock Exchange over a five-year period (2013-2017). The comparative analysis of contributions revealed that listed firms though fewer in number made significantly more contributions than unlisted firms. The study found significant drop in SP after the announcement of a pandemic by the World Health Organisation (WHO). The study also found that SP performance and firm size has a positive and significant relationship with CSER initiatives. The analysis of contributors from listed and non- listed firms in Nigeria towards COVID-19 reveal that only corporate organizations with adequate resource slack can make significant contributions to curtail the spread of the epidemic. The study recommends that corporate organizations should pursue financial capacity in other to make significant CSER investments and expect a change in societal demands and stakeholder expectations in the no distant future.

The Impact of Cash Flow on Share Price of Firms: A Case Study on Oil and Gas Marketing Industry of Pakistan

This study investigates the impact of cash flows on share prices in the oil sector of Pakistan. The variables used in this research are operational cash flows, investment cash flows and financial cash flows as independent variables and share prices as a dependent variable. To test the impact of cash flows on share prices, simple regression analysis is used. The data of 5 largest listed oil companies for 14 years has taken into consideration which has collected from various government agencies such as the State bank of Pakistan, Federal Bureau of Statistics, and Securities and Exchange Commission of Pakistan. The study found significant relationship between cash flows and share prices in five largest oil companies listed in Pakistan Stock Exchanges (PSX).

COVID‐19 and the Economy

The COVID-19 pandemic and the subsequent measures of social distancing are having a huge impact on the economy. Many businesses were asked to close down temporarily or are facing serious operational challenges, while others are experiencing a sharp increase in the demand for their services. Many individuals have lost work, either because jobs closed down temporarily or permanently or because they present health risks to which the individuals are vulnerable. Schools closed down and many parents are shouldering the entirety of the childcare and educational needs of their children. The economy came to a sudden standstill and the magnitude of the recession that is upon us is now becoming evident. The effects of this unprecedented shock are very heterogeneous across individuals and interact with many pre-existing vulnerabilities across race and class. In the meantime, governments around the world have been searching for the best tools to protect their citizens and businesses during the period of rapid contagion and for ways of restarting the economy once the health risk starts to subside. In an attempt to understand the contours of this crisis and to inform policy, many economists have been using the tools at their disposal to document what is happening and understand how best to respond to the immense challenges facing people, firms and governments. Given the critical importance of providing up-to-date evidence to inform the academic and policy debate, Fiscal Studies is publishing in this issue a symposium of invited papers on COVID-related research, covering a range of issues. With one exception, the work focuses on the UK case, and many of the projects stem from ongoing research by staff at the Institute for Fiscal Studies. The symposium starts by bringing out dimensions of ethnic and other inequalities in the effects of this crisis, in papers by Lucinda Platt and Ross Warwick and by Richard Blundell, Monica Costa Dias, Robert Joyce and Xiaowei Xu. The paper by Cathal O'Donoghue, Denisa M. Sologon, Iryna Kyzyma and John McHale shows how the COVID-19 pandemic is affecting the gross incomes of families in Ireland and the extent to which fiscal policy is offering insurance against this shock. The next two papers turn attention to the health crisis. The first, by James Banks, Heidi Karjalainen and Carol Propper, builds on previous research to discuss the potential long-term consequences of this recession for health outcomes and how these may vary with socio-economic and demographic characteristics. The second, by Carol Propper, George Stoye and Ben Zaranko, considers the huge challenges facing the National Health Service in the UK and the potential implications of this crisis for the delivery of healthcare in the short and medium term. The social distancing measures have had severe consequences not only for the incomes of families, but also for the goods and services that are available in the market and their desirability. This has altered the consumption bundle of families and the value of businesses in different sectors of economic activity. A paper by Richard Blundell, Rachel Griffith, Peter Levell and Martin O'Connell discusses the implications of this crisis for the measurement of the Consumer Prices Index. The share prices of firms can be used to identify the sectors that are struggling the most, as noted in the paper by Rachel Griffith, Peter Levell and Rebekah Stroud. The road ahead is treacherous and governments will be looking into ways of promoting economic recovery while keeping infection rates low and protecting those who have lost their jobs or are unable to return to work under the current health risks. The final paper in the symposium, by Monica Costa Dias, Robert Joyce, Fabien Postel-Vinay and Xiaowei Xu, discusses the challenges of this crisis for labour market policy.

The Impact of COVID-19 on Share Prices in the UK.

The spread of COVID‐19, and international measures to contain it, are having a major impact on economic activity in the UK. In this paper, we describe how this impact has varied across industries, using data on share prices of firms listed on the London Stock Exchange, and how well targeted government support for workers and companies is in light of this.

Influence of Earnings on Market Share Prices of Firms Listed at the Nairobi Securities Exchange

Influence of Earnings on Market Share Prices of Firms Listed at the Nairobi Securities Exchange

SHARE PRICE REACTION TO CASH DIVIDEND ANNOUNCEMENT: AN EVENT STUDY OF LISTED FIRMS IN KENYA

This study aimed to establish the effect of cash dividend announcement on share price reaction of the firms listed on the Nairobi Securities Exchange (NSE). This study used Event Study methodology with purely secondary drawn data from 24 firms listed on the NSE who meet the study threshold with an event window of eleven (11) days during the year 2008-2013. The study adopted the descriptive research design and sampling de-sign being purposive. STATA version SE12 was used to produce a descriptive analysis. The findings indicate that the share price reaction to dividend announcement is posi-tive for a dividend increase and negative for dividend decrease and constant for the constant dividend. The study therefore recommends that the effect of the dividend on the firm’s share price is very crucial for not only the literature but also for the regula-tion and supervision of the capital market and that further development of accounting standards, increased auditing skills, and advances in investor education will likely make dividends even more important in the future. Following these findings, it would be useful to also consider the following directions for future research on whether there is any joint effect of cash dividend, bonus issues, and right issues on the share price of firms listed on NSE.