High Growth Prospects Research Articles

Do corporate managers glean information from their stock prices? New evidence from China's strategic emerging industries

Strategic emerging industries (SEIs) have become the pillar industries in China. However, prior studies argue that the Chinese stock market fails to adequately support the development of SEIs by primarily considering its financing function while ignoring its market feedback role. Based on data from 2007 to 2020, our study fills this gap by examining whether managers of Chinese SEI firms glean information from stock prices to guide their investment decisions. We find a significantly positive relationship between stock price informativeness (proxied by the volume-synchronized probability of informed trading) and investment-to-price sensitivity in the SEI firms only, indicating that managers of the SEI firms exhibit prominent learning behaviors. We further reveal that high growth prospects and high sensitivity of corporate fundamentals to macroeconomic factors contribute to the learning behaviors in China's SEIs. Our study sheds light on the role of the Chinese stock market in supporting the SEIs' evolution.

International economic policy uncertainty and analysts' earnings forecasts

We investigate the extent to which international economic policy uncertainty (EPU) impacts analysts' earnings forecasts. Using a sample of Australian firms, we demonstrate that EPU is positively associated with the size of forecast errors and the extent of forecast dispersion. Consistent with Australia being a relatively small but open economy, we show that this EPU effect extends beyond domestic EPU to include global and country-specific EPU, most notably Chinese and US EPU. The effect of international EPU is stronger for short-term forecasts, and for firms with higher growth prospects and profitability. However, the effect of Australian EPU is more pronounced for longer horizon forecasts and for firms in the resources and mining industries, and those with lower growth and profitability. Our results are consistent with heightened international EPU negatively impacting firms' information environment, with increased variation in market participants' beliefs.

Analisis Time Series Dan Cross Section Terhadap Kinerja Keuangan Sub Sektor Otomotif: PT Astra Internasional Tbk, PT Garuda Metalindo Tbk Dan PT Indomobil Sukses Internasional Tbk Tahun 2020-2022

This study aims to analyze the financial performance in the automotive sector of PT Astra Internasional Tbk, PT Garuda Metalindo Tbk, and PT Indomobil Sukses Internasional Tbk during the 2020-2022 period. The analysis was carried out using qualitative descriptive research methods. Explaining that descriptive research is research that seeks to describe a symptom or event that is happening. The results showed that the financial performance of the three automotive companies improved in 2022 compared to 2020. This is indicated by an increase in financial ratios, such as liquidity ratio, activity ratio, solvency ratio, profitability ratio and market ratio. Based on Time Series and Cross Section Analysis, it can be concluded that PT Garuda Metalindo is a company that has high growth prospects than PT Astra Internasional Tbk and PT Indomobil Sukses Internasional Tbk.

The effects of the BoJ's ETF purchases on equities and corporate investment

The Bank of Japan acquired ETFs and stocks to stimulate Japan's stagnating economy and improve financial conditions. Studies found that this program raised equity prices, although its effectiveness in stimulating corporate investment remained unclear. This paper contributes to the literature by identifying the program's channels affecting equities and corporate investment by utilizing data from firms listed on the Nikkei-225 from 2012 to 2019 and estimating a panel GMM. The results show the program raised stock returns and reduced volatility by creating price pressures and inducing investors to rebalance their portfolios; however, it diminished market liquidity by reducing the supply of shares and adjusting market expectations. The program raised investment for firms with high-growth prospects or domestic-oriented revenue by increasing household wealth and reducing equity risk premia to create favorable financial conditions. Overall, this study illustrates the program stimulated investment while having trade-offs regarding market liquidity and cash hoarding.

Cross-border mergers and acquisitions by emerging country banks: What do acquisition premiums tell us?

Our knowledge of international expansion motives and strategies of emerging country banks (ECBs) is limited. Using a worldwide sample of cross-border mergers and acquisitions (CBMAs) and a mixed model, we explore firm- and country-level determinants of acquisition premiums. We show that the effects of target bank and target country characteristics on premiums are contingent on the acquirer’s home country: emerging vs. advanced. More specifically, compared to advanced country acquirers, ECBs pay lower premiums for targets that are: (i) more efficient; (ii) offering better functional diversification opportunities; and (iii) based in markets with higher growth prospects or better institutional development levels. Furthermore, state-owned ECBs pay higher premiums. Our findings suggest that CBMAs undertaken by ECBs might not be motivated by competence-enhancing strategies while being less sensitive to the target country’s institutional development.

Application of Cloud-based Human Resource Management Information System and Women-Entrepreneurial Growth: A Conceptual Consideration

The aim of this study is to offer a conceptual understanding on the link between Cloud-Based Human Resource Management Information System and women entrepreneurship growth. The phenomenon of female entrepreneurship, female business owners themselves and their enterprises, is regarded as one of the carriers of economic and social development. Despite their vast participation and contribution to the economic development, however, female entrepreneurs do not perform as well as their male counterparts in terms of business strategy which results in high growth prospects. The study followed a conceptual approach to indicate how Cloud-Based Human Resource Management Information System will lead to women entrepreneurial growth. The study also proposed a framework on the association between the two constructs. It was concluded that the development of the system will offer greater opportunities for women entrepreneurs to overcome the overarching challenges most especially in their human resource practices which will eventually results in growth opportunities. The study recommended that future research efforts should be carried out to empirically test the proposed framework so as to empirically understand the association between the two constructs.

A machine learning approach to analyse and predict the electric cars scenario: The Italian case.

The automotive market is experiencing, in recent years, a period of deep transformation. Increasingly stricter rules on pollutant emissions and greater awareness of air quality by consumers are pushing the transport sector towards sustainable mobility. In this historical context, electric cars have been considered the most valid alternative to traditional internal combustion engine cars, thanks to their low polluting potential, with high growth prospects in the coming years. This growth is an important element for companies operating in the electricity sector, since the spread of electric cars is necessarily accompanied by an increasing need of electric charging points, which may impact the electricity distribution network. In this work we proposed a novel application of machine learning methods for the estimation of factors which could impact the distribution of the circulating fleet of electric cars in Italy. We first collected a new dataset from public repository to evaluate the most relevant features impacting the electric cars market. The collected datasets are completely new, and were collected starting from the identification of the main variables that were potentially responsible for the spread of electric cars. Subsequently we distributed a novel designed survey to further investigate such factors on a population sample. Using machine learning models, we could disentangle potentially new interesting information concerning the Italian scenario. We analysed it, in fact, according to different geographical Italian dimensions (national, regional and provincial) and with the final identification of those potential factors that could play a fundamental role in the success and distribution of electric cars mobility. Code and data are available at: https://github.com/GiovannaMariaDimitri/A-machine-learning-approach-to-analyse-and-predict-the-electric-cars-scenario-the-Italian-case.

Evaluation of financial soundness of Indian auto Ancillary industries using Altman Z-rate model

The automobile industry is an obvious indication of a country's economic development. Because it requires high performance and quality parts, it is also an innovation and comprehension intensive sector. Because of its deep forward and backward links with many key segments of the economy, the automobile sector is also prominent in India. Because of the strong supply support provided by various auto ancillary manufacturing companies, this sector has a strong multiplier effect and has the potential to be a driver of economic growth. The auto ancillary market is focused on the production and sale of transitional equipment and automotive parts used in the manufacture of automobiles. It is an important part of India's automotive industry. Such industries allow vehicle manufacturers to concentrate on their core competencies. The auto ancillary manufacturing Industry, with its high growth prospects, is one of the emerging industries in Indian markets. The Altman Z rating is a beneficial expedient for identifying a company's economic resilience and the probability of insolvency. The Z rating method was once used in this to find out to check the economic fitness of Indian auto ancillary manufacturing companies. The economic facts of 10 auto ancillary manufacturing companies listed groups on the National Stock Exchange (NSE) have been used to study each unique and rising market Altman Z rating formulae. The findings point out that not all the enterprises listed on the NSE are financially healthy. According to the study, some of the Indian auto ancillary manufacturing companies are sound and dependable without few companies, and some of the auto ancillary manufacturing companies are not likely to face monetary misery or insolvency soon.

Carbon footprint prediction considering the evolution of alternative fuels and cargo: A case study of Yangtze river ships

For reducing carbon emissions in the shipping sector, application of alternative low-carbon and zero-carbon fuels is the consensus. However, requirements of economic development cannot be ignored while focusing on emission reduction. Cargo development is an important prerequisite. Considering the cargo growth as a novelty, a method to calculate the annual carbon emissions of different alternative fuel-powered ships in different cargo growth prospects and power scenarios is proposed. With respect to the time dimension, the relationship between alternative fuels, cargo, and carbon reduction is revealed. The Yangtze River bulk carrier case was studied and the life cycle carbon emission analysis of diesel, LNG hybrid, LNG, hydrogen, methanol, and ammonia were carried out. The annual carbon curves of the high, steady, and low cargo growth prospects were obtained for different scenarios of the power system structure. The results show that LNG hybrid, LNG and methanol fuels are currently the suitable choices. Their life cycle carbon emissions were reduced by 31.5–38.1% compared with those of diesel power. The carbon emissions of green hydrogen and green ammonia were reduced by 78.8% and 91.3%, respectively, compared with those of hydrogen and ammonia. The carbon reduction results of green fuels in their initial application were explored which are at 0.6–10.8%. In addition, there is a balanced annual growth rate, whose annual carbon curve will be steady under its corresponding scenario of power system structure, which could help the ship owners plan their future.

ОЦЕНКА ВОЗДЕЙСТВИЯ ЭПИДЕМИИ КОРОНАВИРУСА НА ЭКОНОМИЧЕСКИЕ ПОКАЗАТЕЛИ РАБОТЫ РОССИЙСКИХ ФАРМАЦЕВТИЧЕСКИХ ПРЕДПРИЯТИЙ

In the context of the COVID-19 virus global pandemic the Russian healthcare system faced important challenges. On the one hand, it is required to provide the population with all the necessary medicines, and, on the other, to support domestic pharmaceutical manufacturers in conditions when foreign manufacturers occupy a priority position in the market in value terms. Thereby hospitals and other medical and preventive institutions sharply increased procurement by tenders from Russian manufacturers since, as a rule, those infected with coronavirus were sent to hospitals. The sharp increase in morbidity and the “waves” of the pandemic created an additional burden on both the hospital system and the medicines manufacturers’ capacity, as a result of which medicines sales increased significantly, and with them, the companies’ revenue and profits. The article gives a general description of the Russian pharmaceutical mar- ket in 2020 and 2021, emphasizing its attractiveness to manufacturers, high competition level and growth prospects. Using the example of the 20 largest Russian pharmaceutical companies it shows the revenue and profit dynamics in 2020 compared to 2019. It was also noted that the demand and, as a result, sales of “anti-covid” medicines changed over 2020 and the 1st half of 2021 along a trajectory sim- ilar to the trajectory of the number of people infected with “waves” in May and October 2020, and then by July 2021. Therefore, it was hypothesized that there would be a correlation between the cases’ number and medicines’ sales of certain therapeutic groups. By “anti-covid” drugs are meant antibacterial, antiviral drugs and immunostimulants. Hence it is possible to build a regres- sion model with the help of which to predict the change in medicines’ sales depending on the epidemiological situation. According to the results of the study, it was revealed that about 50% of sales changes are explained by the morbidity dynamics in Russia. The remai-ning 50% of the changes can be explained by the fact that the considered thera- peutic groups of medicines are used to treat not only the COVID-19 virus, but also other respiratory diseases. The author draws conclusions about the main trends of the new era in the pharmaceutical industry.

Which resource acquisition acts drive growth of informal firms? Evidence from Zambia

PurposeThe study seeks to differentiate informal firms with high-growth prospects by their resource acquisition acts and to improve identification of growth-oriented informal firms for effective design and targeting of support measures.Design/methodology/approachAn original set of firm-level data was collected using face-to-face survey in Lusaka, Zambia. Six clearly defined criteria were used to sample informal firms, apart from general informal business. Regression analyses were conducted to test the association of different resource acquisition acts with two growth dimensions: number of employees and business earnings of the 325 informal firms sampled.FindingsAccessing clientele beyond local market, linking up with formal businesses and acquiring information and knowledge via online sources were found influential to growth in business earnings. Surprising, acquisition of finance and skills showed no effect. Employment expansion, though widely used, may not be a stable indicator of informal firm growth.Research limitations/implicationsThe study highlights the relevance of the emerging entrepreneurship perspective to understanding the topic. It cautions against pre-setting a size threshold for sampling informal firms and against relying on employment expansion as the sole proxy of growth.Practical implicationsThe findings prompt a rethink of the effectiveness of conventional support programmes to drive growth of informal firms such as funding and training. Directing support measures to target growth-oriented informal firms will lead to creation of decent and sustainable jobs and formalisation.Originality/valueWith an original firm-level dataset, the study challenges a long-held assumption that growth of informal firm is negligible and shows that segments of informal firms are sustainable and could attain significant growth and derives new insights into researching and supporting informal firm growth.

Identifying the Heterogeneous Impact of Highly Anticipated Events: Evidence from the Tax Cuts and Jobs Act

We develop a method for estimating the stock market impact of aggregate events. Based on using data on both stock and options prices, our technique accounts for two important sources of bias present in traditional methods. First, our method takes into account market anticipation, without the need for information on specific firm characteristics. Many event studies only measure a fraction of an event's full value effect, so the measured market reaction at event resolution can be misleading, particularly in the case of a very high degree of market anticipation. Second, our method is robust to the possibility of the event being good news for some firms and bad for others, without prior specification of this heterogeneity. We apply the method to the passage of the Tax Cuts and Jobs Act (TCJA), which exhibits both anticipation and heterogeneity. We estimate the market anticipated the probability of passage to be as high as 95% 30 days before the event. The full value impact of the TCJA is found to be 12.36%, compared to 0.68% when market anticipation is ignored. The firm-level impact of the TCJA is considerably heterogeneous, with large and innovative firms with high growth prospects being the largest winners.

2021 Lucas Prize Announcement

Previous articleNext article Free2021 Lucas Prize AnnouncementPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreThe Robert E. Lucas Jr. Prize is awarded biannually for the most interesting paper in the area of Dynamic Economics published in the Journal of Political Economy in the preceding two years. The prize was established in 2016 on the occasion of the celebration of Lucas’s seminal contributions to economics and his Phoenix Prize award.Papers published between August 2018 and June 2020 were considered for the third prize, which has been awarded to Charles I. Jones and Jihee Kim for “A Schumpeterian Model of Top Income Inequality” ( Journal of Political Economy 126 [5]: 1785–1826).This paper pertains to a topic that has received much attention as of late: why is income inequality at the top so high, and why has it risen sharply in the United States, though less so in other countries? The authors provide an empirical analysis and complement it with a model to understand the facts.The authors observe that top income inequality was relatively low and stable between 1960 and 1980 but then rose sharply in the United States, Norway, and the United Kingdom. They argue that rising top income inequality to a great extent reflects rising labor income inequality, where labor income is broadly conceived and includes entrepreneurial income such as “business income.” The authors confirm that labor income is well described by a Pareto distribution, that is, that the expected income above some level is in a constant proportion relative to that level (see their fig. 4). The rising income inequality manifests itself in that this proportion has risen between 1980 and 2005.For their model, they focus on entrepreneurial activity and the resulting income as the driving force. They assume that a small share of entrepreneurs can turn their efforts into fast income growth, until they are replaced by competitors via creative destruction. This interplay produces the Pareto distribution and income inequality. They calculate the resulting efforts provided by entrepreneurs. Higher growth prospects and a lower creative destruction rate imply higher efforts as well as higher inequality. In their measurement, they calculate the contribution of each. A numerical approximation shows that the model can well account for the observed changes in income inequality. Ultimately, then, economic forces due to information technology, taxes, and policies related to innovation blocking may explain the varied patterns.This important paper is part of a growing literature that helps us more deeply understand the engines of growth, the sources of inequality, and their rich interplay. Policy choices seeking adjustments to one are likely to affect the other. Future research can build on the work by Jones and Kim to provide more detailed guidance. Previous articleNext article DetailsFiguresReferencesCited by Journal of Political Economy Volume 129, Number 2February 2021 Article DOIhttps://doi.org/10.1086/713243 Views: 375 © 2021 by The University of Chicago. All rights reserved.PDF download Crossref reports no articles citing this article.

Shareholder Value Implications of the Internal Audit Function

SYNOPSIS In 2013, NASDAQ Stock Market LLC (NASDAQ) issued a proposal to mandate the internal audit functions (IAFs) for all listed companies but later withdrew the proposal. In this study, I investigate whether the mandatory IAF adds shareholder value and how the value implications vary across companies. For companies without IAFs before the proposal, I document a positive (negative) price response to the NASDAQ IAF proposal filing (withdrawal). This evidence suggests that, on average, investors perceive mandatory IAF as value enhancing. I find that the positive market reaction is concentrated among firms with lower external audit quality and institutional ownership. Additionally, I document that the return responses are higher for companies with smaller book-to-market ratios, multiple business segments, and lower Altman z-scores. Those results suggest that investors' perceptions of the mandatory IAF are more positive for weakly monitored firms, firms with high-growth prospects and complex business, and firms in financial distress.

CEOs' market sentiment and corporate innovation: The role of financial uncertainty, competition and capital intensity

Using panel data of 2225 firms headquartered in the US, we examine the effects of CEOs' market sentiment on corporate innovation capacity. We also examine the extent to which sentiment-innovation relation is moderated by: (i) financial uncertainty/vulnerability; (ii) competition; (iii) firm size and growth prospects; (iv) capital intensity; and (v) operational complexity. The results indicate that, both across and within firms, innovation declines when CEOs perceive market conditions to be good (high sentiment periods). In addition, the negative sentiment-innovation relation observed during high sentiment periods is enhanced when firms are large, and have high growth prospects and greater operational complexities. Nevertheless, firm innovation increases significantly during high sentiment periods when firms anticipate uncertainties about future cash flows, when competition is intense, and when capital intensity creates extreme entry barriers. Our core explanations hold even after accounting for endogeneity and using alternative measures of firm innovation.

Supply Chain Disruptions

This study expands the work on contagion effects caused by supply chain disruptions beyond the impacted firm and competitors to its customers and suppliers. Using hand-collected data, we analyze the news announcements to determine those that resulted in disruptions in supply, demand, production, inventory, distribution, or transportation at one or more stages of a supply chain across different types of disruptions and across six market segments. Using event study methodology and regression analysis, we find statistically significant negative share price responses to announcement of supply chain disruptions for the affected firm and its competitors, but not for consumer and supplier firms. Competitors in more concentrated industries, with higher growth prospects, or with higher debt ratios, are more impacted by disruptions by peer firms. Customers firms in less competitive industries, who exhibit higher risk, or have overall lower sales react more negatively to disruption announcements.

When Do Appointments of Chief Digital or Data Officers (CDOs) Affect Stock Prices?

This article investigates the stock market reaction to appointments of newly created chief digital or data officer (CDO) positions. The analysis is based on a sample of 112 CDO appointment announcements by publicly traded companies listed in the US stock market from 2004 to 2017. We ground our arguments in signaling theory along with the institutional entrepreneurship and synergy and redundancy perspective to understand the factors that could influence the market reaction to CDO appointments. Although the results show that the stock market reacts neutrally to announcements of newly created CDO positions, the market does react positively under certain conditions. The market reacts positively when appointing firms exhibit high growth prospects. The article supports the redundancy perspective, and the results show that the market reacts positively when a potentially conflicting and overlapping role such as chief information officer (CIO) is absent in appointing firms. Our analysis also shows that when CIO is absent, the market reacts more positively to outsider CDO relative to insider CDO, thereby indicating the interaction between redundancy and institutional entrepreneurship perspectives.

Ownership concentration and stock returns: Evidence from family firms in India

Public family firms in India represent an interesting case of relatively high ownership concentration combined with high growth opportunities, less competitive product markets and less developed capital markets. Investigating the relationship between ownership concentration and stock market performance, our initial analysis indicates insignificant average abnormal stock returns at low levels of family holdings but weak positive performance at high levels of ownership in the full sample of family and non-family firms and the family subsample. These aggregate results appear robust to alternative metrics of abnormal performance, controls for founder, descendant, and outside CEOs. Further analysis of subsamples of less and more competitive product markets indicates that while the vast majority of family firms enjoying high growth opportunities in less competitive market environments exhibit poor performance at lower ownership levels, those firms with higher family holdings are associated with significantly positive abnormal returns. However, the relation between family ownership and firm valuation under high growth prospects becomes insignificant for a much smaller fraction of firms facing high product market competition. Overall, our results are consistent with the hypothesis that positive alignment of interest effects offset family entrenchment effects on firm performance at high levels of ownership concentration common in India where most firms face high growth opportunities and less product market competition. These results challenge the evidence in western developed economies marked by relatively weaker growth rates and stronger product market rivalry that the performance of family firms tends to decline at high ownership concentration due to entrenchment.

Political Cycles and Bank Lending in Russia

State-owned banks tend to increase lending before elections for the purpose of boosting the reelection odds of incumbent politicians. We employ monthly data on individual banks to study whether Russian banks increased their lending before presidential elections during 2004–2019, a period covering four presidential elections. In contrast to the literature, we find that both state-owned and private banks increased their lending before presidential elections. This result stands for all loans, as well as separately for firm and household loans. The pre-election lending surge is followed by a deterioration of loan quality the following year, indicating the lending increase was not driven by higher growth prospects or some positive economic shock. The effect is substantially greater for large banks and banks more involved in lending activities. Our main finding that all types of banks in Russia increase their lending before presidential elections supports the view that the authorities in an electoral autocracy like Russia can influence lending of both private and state-owned banks for political reasons.

Penyusunan Balanced Scorecard pada PT Cipta Paramula Sejati

ABSTRACTPT Cipta Paramula Sejati is one of the companies engaged in the space and office rental business in Jakarta. PT Cipta Paramula Sejati manages the rental of office buildings and rooms in the Jakarta Design Center Building. Jakarta Design Center is a mall that has three types of businesses related to building space rental. Every company will be faced with various problems, both problems that come from within the company (internal) and problems from outside the company (external). This study aims to analyze the strategic objectives and key performance indicator (KPI) in terms of four perspective Balanced Scorecard (BSC), an also performance measurement methods at PT Cipta Paramula Sejati based on BSC concept. The analytical method used is the BSC. The study used a descriptive approach through in-depth interviews with respondents who were chosen intentionally (purposive sampling). The results of the study obtained twelve strategic targets and fourteen KPI. Based on the results of the BSC compilation of PT Cipta Paramula Sejati, the weighting for each BSC perspective was as follows: financial perspective of 27.78 percent, customer perspective of 27.78 percent, internal business process perspective of 25 percent, and learning and growth perspective of 19.44 percent.Keywords: building management, balanced scorecard, key performance indicator. ABSTRAKPT Cipta Paramula Sejati adalah salah satu perusahaan yang bergerak dalam bisnis penyewaan ruangan dan perkantoran di Jakarta. PT Cipta Paramula Sejati mengelola penyewaan gedung dan ruangan perkantoran di Gedung Jakarta Design Center. Jakarta Design Center merupakan mall yang memiliki tiga jenis usaha yang berkaitan dengan penyewaan ruangan gedung. Setiap perusahaan akan dihadapkan pada berbagai permasalahan, baik itu permasalahan yang berasal dari dalam perusahaan (internal) maupun permasalahan dari luar perusahaan (eksternal). Penelitian ini bertujuan untuk menganalisis sasaran strategis dan indikator yang menjadi tolak ukur kinerja ditinjau dari empat perspektif Balanced Scorecard (BSC), serta menyusun metode pengukuran kinerja di PT Cipta Paramula Sejati berdasarkan konsep BSC. Metode analisis yang digunakan adalah BSC. Penelitian menggunakan pendekatan deskriptif melalui wawancara secara mendalam dengan responden yang di pilih secara sengaja. Hasil penelitian diperoleh dua belas sasaran strategis dan empat belas tolak ukur kinerja. Berdasarkan hasil penyusunan BSC pada PT Cipta Paramula Sejati diperoleh pembobotan untuk masing- masing perspektif BSC adalah sebagai berikut: perspektif keuangan sebesar 27,78 persen, perspektif pelanggan sebesar 27,78 persen, perspektif proses bisnis internal sebesar 25 persen, dan perspektif pembelajaran dan pertumbuhan sebesar 19,44 persen.Kata kunci : pengelola gedung, Balanced Scorecard, indikator tolak ukur kinerja.