Higher Stock Price Research Articles

Retail investors and the behavioral component of idiosyncratic volatility

Utilizing the unique institutions and datasets in China, we find that the idiosyncratic volatility (IVOL) of stock returns correlates positively with retail investor activities at both the market aggregate and individual stock levels. Further analysis indicates that this effect is more pronounced in small-cap, high-priced stocks, and those with low institutional ownership. However, this relationship does not extend to the STAR Board, which is largely inaccessible to most retail investors. Additionally, employing the exit of Google from China as a quasi-natural experiment, we demonstrate that the relationship between retail investor activities and IVOL is likely causal. Lastly, we find that retail investor activities in China do not provide informative signals about future returns, and our findings are not attributable to information incorporation. Overall, our study suggests that IVOL contains an important behavioral component, to which noisy retail investor activities contribute.

A Study of the Impact of Equity Incentives on Pricing Efficiency in Capital Markets

Equity incentives are crucial for talent acquisition and fostering corporate innovation; yet, the current literature predominantly focuses on the business level, with less research on the correlation between equity incentives and the capital market. This study empirically investigates the influence of equity incentive schemes on capital market pricing efficiency, utilizing data from Chinese A-share listed businesses between 2010 and 2023, focusing on stock price synchronization and post-surplus announcement drift as analytical viewpoints. The findings indicate that the execution of corporate stock incentive plans can significantly enhance the price efficiency of capital markets. The mechanism test indicates that corporate stock incentive plans enhance the efficiency of capital market pricing. Regarding various incentive mechanisms, both stock options and restricted shares influence capital market pricing efficiency. However, when the share price approaches the exercise price (grant price), restricted shares adversely affect pricing efficiency, whereas stock options positively impact it. Subsequent research indicates that the beneficial impact of equity incentives on capital market pricing efficiency is more pronounced in enterprises with high stock price information content and in those where incentive recipients comprise key technical people. The study's results elucidate the theoretical debate over the practical effects of equity incentive schemes and offer recommendations on the appropriate types of equity incentives for various enterprises to enhance capital market pricing efficiency.

Decomposing momentum: The forgotten component

We split up the standard momentum return over months t−12 to t−2 at the highest stock price within this formation period. Of the overall momentum profits in month t, 84% can be attributed to the return prior to this peak price although research has exclusively focused on the post-peak return so far. The return predictability of the forgotten component is consistent with investor underreaction as underlying mechanism. Contrary to standard momentum strategies, the corresponding long-short returns are positively skewed, avoid momentum crashes, show no market state dependence, and yield consistent return premiums in both the US and international stock markets.

Examining Leverage and Sales Growth: Their Influence on Stock Prices of Agricultural Firms on the Indonesia Stock Exchange

Information available in the capital market influences investor confidence, which in turn impacts market efficiency. Stock prices are a crucial factor for every investor to consider when investing in shares. Higher stock prices indicate better performance of the issuing company, and vice versa. This study aims to determine the effect of leverage and sales growth on stock prices of agricultural companies listed on the Indonesia Stock Exchange from 2018 to 2022. The research sample consists of 18 agricultural companies selected through purposive sampling. Data were analyzed using EViews 12 SV software. The study's findings reveal that leverage has a negative impact on stock prices. High leverage indicates a heavy reliance on debt, which increases the risk of bankruptcy and high interest burdens, thus reducing the attractiveness of the company's shares to investors. Meanwhile, sales growth does not have a significant impact on stock prices, as the probability value is above 0.05.

Pengaruh Biaya Lingkungan Dan Kinerja Lingkungan Terhadap Kinerja Keuangan

The basic materials sector company is one of the sectors that is expected to have bright prospects in the future and is one of the sectors that has a sizable role in contributing raw materials. If we look at the stock prices of several basic materials companies, they have experienced erratic increases and decreases. The high and low stock prices are influenced by how the company's financial performance is. The data used in this research is secondary data, namely in the form of annual reports of companies in the basic materials sector for 2017-2021. This research is descriptive with a quantitative approach. The statistical method used is simple regression analysis, panel data regression method, F test, t test, and analysis of the coefficient of determination. The results showed that environmental costs had a partial positive and significant effect on the financial performance of basic materials sector companies listed on the Indonesian Sharia Stock Index. Environmental performance had a partial positive and significant effect on financial performance in basic materials sector companies listed on the Sharia Stock Index. Indonesia. Then environmental costs and environmental performance have a positive and significant simultaneous effect on financial performance in basic materials sector companies listed on the Indonesian Sharia Stock Index.

Shared analyst coverage, 52-week high, and cross-firm return predictability

In this study, we show that the return predictability of analyst-connected firms is positively correlated with nearness to 52-week high stock prices. Our results are robust to tax loss selling and penny stocks and when controlling for market factors and macroeconomic conditions. The impact of the 52-week high on the analyst-connected momentum effect is stronger among focal stocks of smaller firms, those with lower institutional ownership, and those with less analyst coverage. Moreover, the greater the number of shared analysts, the stronger the relationship between firm fundamentals, resulting in stronger return predictability. When both focal and analyst-connected firms have stock prices near (far from) their 52-week highs, there is a stronger underreaction to good (bad) news about analyst-connected firms.

Tiny trades, big questions: Fractional shares

This paper investigates fractional share trading. We develop a latency-based method for identifying a large sample of fractional share trades. We find that high-priced stocks, meme stocks, IPOs, SPACs, and popular retail stocks exhibit considerable numbers of these tiny trades. We surmise that this reflects dollar-based order entry, with many tiny trades being fractional components of larger orders. We show that our fractional trade measure is predictive of future liquidity and volatility, suggesting a new metric to capture the information in retail trades. We identify how data and reporting protocols preclude knowing the extent of fractional share trading, inflate volume data, and provide censured samples of these off-exchange trades.

The Impact of ESG Performance of Energy Enterprises on Stock Value

ESG, as an increasingly important evaluation indicator for today's enterprises, is being widely used. This article aims to study the relationship between ESG performance in the energy industry and stock value. This article takes the data of energy companies listed in the Shanghai and Shenzhen A-share markets from 2015 to 2022 as samples, controls for two variables: energy type and industry profitability, and uses the P/E ratio estimation method for analysis. Research has found that energy companies with environmental friendliness, high social reputation, and good management practices have higher stock prices, making them more likely to be favored by investors. The relevant research in this article can effectively help investors optimize their decision-making by analyzing the ESG situation when choosing the energy industry. At the same time, this study can provide some development insights for new and traditional energy enterprises.

How does monetary policy affect income and wealth inequality? Evidence from quantitative easing in the euro area

SummaryThis paper evaluates the impact of quantitative easing on income and wealth of individual euro area households. We first estimate the aggregate effects of a quantitative easing (QE) shock, identified by means of external instruments, in a multi‐country vector autoregression (VAR) model with unemployment, wages, gross operating surplus, interest rates, house prices, and stock prices. We then distribute the aggregate effects across households using a reduced‐form simulation on micro‐data, which captures the portfolio composition, the income composition, and the earnings heterogeneity channels of transmission. The earnings heterogeneity channel is important: QE compresses the income distribution because many households with lower incomes become employed. In contrast, monetary policy has only negligible effects on the Gini coefficient for wealth: While high‐wealth households benefit from higher stock prices, middle‐wealth households benefit from higher house prices.

Impact of Social Media Sentiments on Stock Market Behavior: A Machine Learning Approach to Analyzing Market Dynamics

Social media has become a valuable tool for informed decision-making. This research delves into the influence of Twitter sentiments on the stock market’s movements and price fluctuations, specifically focusing on Tesla Inc and the tweets of Elon Musk. A combination of deductive and inductive reasoning approaches is used to explore the intricate relationship between the social media platform and the stock market. Methodologically, the Twitter data undergoes rigorous processing to derive features for the machine learning predictive model, and the sentiments are extracted using the Valence Aware Dictionary and Sentiment Reasoner (VADER) tool. This study emphasizes the usefulness of social media in predictive modeling while underscoring the importance of evaluating data reliability considering challenges such as spam tweets and geographical relevance. Multiple machine learning models are tested against four distinct datasets addressing the high stock price volatility. XG Boost and Random Forest Regressor emerge as the most effective performers, particularly when moving averages are included, showing enhanced performance. This research establishes an evident correlation between social media sentiments and stock market movements, however with limited predicting power. It is also noted that integrating traditional financial metrics enriches the understanding of stock market dynamics while enhancing the model’s predictability.

The Influence of Institutional Ownership, Intellectual Capital, Profitability, Leverage and Corporate Social Responsibility (CSR) on Firm Value at Food and Beverage Industry Companies Listed in the Indonesian Stock Exchange in the Period of 2018-2022

The Influence of Institutional Ownership, Intellectual Capital, Profitability, Leverage and Corporate Social Responsibility (CSR) on Firm Value at Food and Beverage Industry Companies Listed in the Indonesian Stock Exchange in the Period of 2018-2022

Fractional Trading

Abstract Fractional trading (FT)—the ability to trade less than a whole share—removes barriers to high-priced stocks and facilitates entry by capital-constrained retail investors. We observe a surge of tiny trades, measured using off-exchange one-share trades, among high-priced stocks compared to low-priced stocks after FT is introduced to the U.S. equity markets. These tiny trades, when coordinated during attention-grabbing events, are forceful enough to exert large price pressure on high-priced stocks. Further evidence suggests that FT can even fuel meme-stock-like trading frenzies and bubbles in high-priced stocks, for which the feedback effect likely plays a role. (JEL G10, G12, G14, G18, G32, G41)

What accounts for the effect of sustainability engagement on stock price crash risk during the COVID-19 pandemic—Agency theory or legitimacy theory?

In this study, we conduct a textual analysis of the third-party disclosure of corporate sustainability news focused on the Standard and Poor's 500 firms in the United States market during the first and second quarter of 2020. We find a positive relationship between corporate sustainability news release and firm-specific stock price crash risk. This finding is surprising, but it indeed aligns with agency theory. It indicates that the coronavirus disease (COVID-19) pandemic exacerbated the tendency of managers under increasing financial pressure to use the sustainability information release as a mechanism to mask and withhold bad news for extended periods at the expense of shareholders. This tendency results in high stock price crash risk. Our results are robust to alternative empirical specifications, estimation methods, and tests for endogeneity. Moreover, additional evidence reveals that agency theory dominates legitimacy theory in explaining the effect of sustainability on this risk during the COVID-19 pandemic.

The Determinants of Manufacturer Firm Value in the Indonesia Stock Exchange During Pandemic: Signalling Theory Perspective

The importance of a company's value cannot be overstated as it directly correlates with the prosperity of shareholders. Elevated company value translates to increased shareholder wealth, primarily manifested through higher stock prices. This research endeavors to empirically assess the impact of liquidity, leverage, and profitability – independent variables – on firm value within the food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2021. Employing a quantitative approach, secondary data from the official website (www.idx.co.id) was utilized, encompassing companies within this subsector. The research employed purposive sampling, selecting 28 companies from a total population of 84. Statistical Product and Service Solution (SPSS) version 23 facilitated data analysis using multiple linear regression. Findings revealed that liquidity (X1) exhibited a significance value of 0.511, surpassing the 0.05 significance level (0.511 > 0.05), with a negative t value of -0.663. This implies that liquidity (X1) does not exert a significant influence on firm value (Y). Likewise, leverage (X2) yielded a significance value of 0.326, exceeding the 0.05 level (0.326 > 0.05), accompanied by a positive t value of 0.993

Pengaruh Likuiditas, Profitabilitas dan Solvabilitas terhadap Harga Saham

The following research is carried out as a step in testing the suitability of the hypothesis that the company's liquidity, profitability, and solvency have an impact on the high and low stock prices. the author will use the independent variables in the form of the current ratio, return on assets, and debt to equity ratio, while the dependent variable will use the stock price of a manufacturing company. The following research will involve a sample of manufacturing companies that have been listed and remain actively marketed on the Indonesia Stock Exchange (IDX) in the period 2019 to 2021. The population we have selected includes around 181 companies. We will use the simple random sampling method to select the sample, which involves random selection from the existing population. A total of 22 companies will be sampled in the following research. The multiple regression statistical method will be used to analyze the relationship between various variables in manufacturing companies and the dependent variable that is to be predicted in the following research. In this study, the results found that simultaneously, the liquidity ratio, profitability ratio and solvency ratio did not have a statistically significant effect on the prediction of stock prices in the capital market. In addition, statistically, the liquidity ratio, profitability ratio and solvency ratio partially do not show a significant effect on estimating the price of shares in the capital market on the Indonesia Stock Exchange (IDX).
 Keywords: Liquidity, Profitability, Solvency, Stock Price, Manufacturing.

Pengaruh Likuiditas, Profitabilitas dan Solvabilitas Terhadap Harga Saham:


 The following research is carried out as a step in testing the suitability of the hypothesis that the company's liquidity, profitability, and solvency have an impact on the high and low stock prices. the author will use the independent variables in the form of the current ratio, return on assets, and debt to equity ratio, while the dependent variable will use the stock price of a manufacturing company. The following research will involve a sample of manufacturing companies that have been listed and remain actively marketed on the Indonesia Stock Exchange (IDX) in the period 2019 to 2021. The population we have selected includes around 181 companies. We will use the simple random sampling method to select the sample, which involves random selection from the existing population. A total of 22 companies will be sampled in the following research. The multiple regression statistical method will be used to analyze the relationship between various variables in manufacturing companies and the dependent variable that is to be predicted in the following research. In this study, the results found that simultaneously, the liquidity ratio, profitability ratio and solvency ratio did not have a statistically significant effect on the prediction of stock prices in the capital market. In addition, statistically, the liquidity ratio, profitability ratio and solvency ratio partially do not show a significant effect on estimating the price of shares in the capital market on the Indonesia Stock Exchange (IDX).
 Keywords: Liquidity, Profitability, Solvency, Stock Price, Manufacturing

PENGARUH GOOD CORPORATE GOVERNANCE DAN KINERJA LINGKUNGAN PADA NILAI PERUSAHAAN

Firm value is an investor's perception of the company's level of success which is often associated with stock prices. High stock prices make the value of the company also high. A high company value will make investors not only believe in the company's current performance but also in the company's prospects in the future. This study aims to analyze the effect of good corporate governance and environmental performance on firm value. This research was conducted on mining companies listed on the Indonesia Stock Exchange (IDX) for the 2016-2020 period. This study uses secondary data, namely from the annual reports of mining companies on the IDX for the 2016-2020 period. Data were collected using purposive sampling technique with a number of observations of 30 companies. Data were analyzed using multiple linear regression. The results of this study can show that good corporate governance and environmental performance have a positive effect on the value of mining companies listed on the Indonesia Stock Exchange in 2016-2020. The implication of this research is that GCG and environmental performance provide a positive signal for investors in assessing the performance of a company. In addition, the company also strives to align its economic goals with its social goals in order to pay more attention to the environment so that it will be accepted by the community and the company has good prospects in the future.

Examining the Effects of Economic Policy Uncertainties on the Stock Market Index: Analysis by Nonlinear ARDL Method for G7 Countries

Uncertainties are important factors that influence the decisions made by societies. Economic uncertainties closely affect society’s consumption and investment behaviour. Rising stock markets increase investors’ confidence, resulting in more purchases and higher stock prices and, in this context, an increase in consumer spending. When stock prices decrease, company investments are also negatively affected as consumer spending declines. Thus, increases and decreases in stock prices affect the general economy as they affect business confidence and consumers. The study analyses the effect of uncertainty in economic policies on stock markets, leading to a decrease in investor confidence in the economy. Such effects in G7 countries were examined using the nonlinear autoregressive distributed lag (ARDL) model for the period 1998:M05–2020:M09. This method was able to capture symmetries and asymmetries in the relationship between economic policy uncertainties and the stock markets. The results showed that heightened uncertainty in economic policy in Japan has a significantly negative effect on the stock market index, but in Germany and Italy, it has a significantly positive effect. Rising interest rates have negatively affected the stock market index in the United States, Canada, Japan, Italy, and the United Kingdom. The increase in the industrial production index is positively related to the stock market index in the United States, Canada, Japan, Italy, and France. Additionally, uncertainties in economic policy have asymmetric impacts on the stock market index in the United States, Canada, Japan and Italy, and symmetrical impacts in Germany, France and the United Kingdom.

Unveiling the Motivation of Fraudulent Financial Statement in ENVY: Fraud Triangle Theory

This study aims to unravel the motivations behind the production of fraudulent financial statements by PT. Envy Technologies Indonesia Tbk. It employs a case study approach and the fraud triangle theory to shed light on this critical issue. This research is of paramount importance because fraudulent financial statements can have severe repercussions, adversely affecting shareholders and the broader capital markets. The primary findings of this investigation indicate that three key factors played a significant role in encouraging fraud within PT. Envy Technologies Indonesia Tbk. These factors are pressure, opportunity, and rationalization. The impetus for such fraudulent actions is traced back to the pressure exerted on maintaining high stock prices. The opportunities for manipulation arise from a deficiency in internal oversight mechanisms, enabling misconduct. Furthermore, rationalizations are formulated to justify the diversion of IPO funds in a manner that aligns with the information disclosed in the prospectus. This research offers a nuanced understanding of the factors that drive financial statement fraud in Indonesian public companies. It highlights that fraudulent activities are often the result of a combination of pressures, opportunities, and rationalizations. Recognizing these factors can be instrumental in implementing preventive measures to mitigate the occurrence of such fraud in the future.

The Impact of Social Media Related Events on the Price Volatility of Mega-Cap Technology Stocks

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of the impact of social media events on stock price volatility. The main purpose of the research is to examine the impact of the Reddit posts from January 2022 through July 2023 on the price volatility of the six U.S. mega-cap technology stocks. Unlike most of the previous studies that focus on Twitter, this study focuses on Reddit. This study not only examines how Reddit posts relate to volatility but also how trading volume and stock price relate to volatility. Therefore, while focusing on the impact of social media events on volatility, the study controls for the effects of trading volume and price. Based on the previous research on social media events on different platforms, it is expected that Reddit events significantly affect stock price volatility. Again, based on the previous research on social media events on different platforms, higher trading volume and higher stock prices are expected to have a positive relationship with stock price volatility (i.e. higher volumes and higher prices are associated with higher volatility). Overall, the findings in this paper support these expectations. First, the ANOVA test results reject the null hypothesis of no predictive relationship between the three independent variables (i.e. “Socialmedia”, “Price”, and “Volume”) and the stock price volatility of the six mega-cap stocks. For the whole group of firms, the regression analyses show that the positive Reddit events are associated with lower volatility when compared to negative Reddit events, and that higher trading volumes and prices are associated with higher volatility. Therefore, for the group of six mega-cap stocks, the results support our hypothesis. When individual regressions are performed for each stock, the results are mixed. The results for Alphabet (i.e. Google), Tesla, Meta, and Microsoft are more in line with the expectations, while the results for Apple and Nvidia are not. For Google and Tesla stocks, when there is a positive social media event, the volatility is lower. This finding indicates that a positive event calms the investors of these stocks. For Meta and Microsoft stocks, when there is a positive social media event, the volatility is higher. This finding may imply that increased volatility due to a positive event possibly stems from the extra demand for these stocks in a very short period. For Apple and Nvidia stocks, there is no significant relationship between social media events and volatility. Overall, we conclude that, a prospective investor who wants to invest in a pool of “mega-cap technology stocks”, social media events should be a factor when making an investment decision. On the other hand, a prospective investor who is a “stock picker”, needs to evaluate each individual regression result when making an investment decision.