Stock Price Increases Research Articles

Inquiry letter supervision and stock price informativeness-research based on the stock price non-synchronicity

ABSTRACT Based on the sample of listed companies in China, this paper discusses the impact of the annual report inquiry letter sent by stock exchanges on stock price informativeness. Research results show that the inquiry letter increases the stock price non-synchronicity, indicating a positive impact of the inquiry letter on stock price informativeness. This effect is more pronounced for companies with low information transparency and poor corporate governance, suggesting that inquiry letter increases stock price informativeness through the information channel and governance channel. The positive impact of inquiry letter on stock price informativeness is affected by the frequency of receiving inquires, whether accounting firms are required to express verification opinions and the number of questions in the inquiry. Results of this paper support the positive role of inquiry letter in improving market information efficiency.

Does the Capital Market Opening Improve the Price Discovery Efficiency of Stock Market? An Empirical Research Based on Shanghai-Hong Kong Stock Connect

Whether capital market opening improves the price discovery efficiency of stock market is an important issue. Shanghai-Hong Kong Stock Connect (hereafter, SHKSC) is a milestone event in the opening up of China’s capital market. Based on SHKSC, using the method of PSM + DID, we study the impact of capital market opening on the price discovery efficiency from two dimensions-stock price information content and price reaction speed to information. Our research shows that capital market opening did not increase stock price information content, but speed up the reaction of price to information. Therefore, capital market opening improves capital market’s price discovery efficiency in terms of response speed of stock price to information. Further analysis shows that capital market opening affects stock price reaction speed through improving market information environment and reducing insider trading, but it has not yet had a substantial impact on listed companies’ earnings quality, which is the main participant in the capital market, and therefore has failed to influence the stock price information content. In order to maximize the effectiveness of capital market opening, it is necessary to introduce more effective policies to improve the information disclosure quality of listed firms and reduce the level of insider trading.

Trading restrictions and investor reaction to non-gains, non-losses, and the fear of missing out: Experimental evidence

This study investigates, in an experimental setting, how retail investors react to trading restrictions. Investors in our experiment trying to buy stock learn that their brokerage has suspended buy orders. We manipulate whether the stock price increases or decreases following this restriction. When the stock price increases, investors miss out on a potential gain (non-gain). When the stock price decreases, investors avoid a potential loss (non-loss). Even though both non-gains and non-losses are notional, investors who experience non-gains react more negatively to trading restrictions. We measure investors’ susceptibility to fear of missing out (FoMO)—and find that high-FoMO investors react more negatively to trading restrictions than low-FoMO investors but are relatively less-affected by non-gains versus non-losses. In contrast to the universal outrage against trading restrictions described in the popular press, investor reactions in our experiment are driven by a combination of context-specific factors (non-gains versus non-losses) and investor-specific factors (FoMO).

Does investors’ valuation of corporate environmental activities vary between developed and emerging market firms?

We compare the market reactions of developed and emerging market firms to reconstitutions of the FTSE Environmental Opportunities (FTSE EO) index. Our primary finding is that developed market firms that were added to or deleted from the FTSE EO experience significant increases in stock prices and trading volumes even after controlling for institutional ownership and size effects. In contrast, emerging market firms experience declines in both stock prices and trading volumes.

Dividend as a Moderation Variable to Increase Stock Prices

One of the strategic decisions in the company is related to dividend decisions. It becomes the basis for investors to invest in shares. Investors value income from dividends distributed by companies for more than income from capital gains. Investors prefer to receive payment now than future ones because they are faced with uncertainty. Regular dividend distribution indicates the company has bright prospects in the future. Accordingly, Dividends have a significant influence on the increase in share prices. Data were collected using the documentation method of 34 samples of the most liquid Islamic stocks listed on the IDX. This research uses the SPSS analysis technique and uses a partial test (t-test). The tests to determine the significance of each independent variable in influencing the dependent variable with a one-way test and using moderation regression to test and analyze the effect of dividends per share on stock prices, whether to strengthen/weaken the dependent variable. The study results found that profitability and solvency , as well as dividends, have a relationship with stock prices. The relationship between ROA and share prices as moderated by dividends is negative for stock prices. The relationship between ROE and share price, which is moderated by dividends, is positive but not significant. Dividends can significantly strengthen the DER relationship to the share price. In addition, dividends were able to strengthen DAR's relationship with share prices significantly.JEL: G11, G12, G41

KETERKAITAN EARNING PER SHARE (EPS), CURRENT RATIO (CR), DAN DEBT TO EQUITY RATIO (DER) TERHADAP HARGA SAHAM PERUSAHAAN

The food and beverage company's earnings per share (EPS) share price and earnings are down in 2020. Current Ratio (CR) and Debt to Equity Ratio (DER) showed good progress, but neither was followed by an increase in stock prices. The purpose of this study is to determine the effect of Earnings Per Share (EPS), Current Ratio (CR), and Debt to Equity Ratio (DER) on stock prices both partially and simultaneously. This research uses a quantitative approach with secondary data in the form of Earning Per Share (EPS), Current Ratio (CR), and Debt to Equity Ratio (DER) data and stock prices. The determination of samples in this study used purposive sampling so that 9 companies from 29 food and beverage companies were obtained. The analysis technique used is a regression analysis technique of panel data using the help of the Eviews10 application. The conclusions obtained indicate that Earnings Per Share (EPS) partially have a positive and significant effect on the stock price. Current Ratio (CR) and Debt to Equity Ratio (DER) partially have no significant effect on stock prices. Earnings Per Share (EPS), Current Ratio (CR), and Debt to Equity Ratio (DER) simultaneously have a positive and significant effect on stock prices

HOW EARNING PER SHARE (EPS) AFFECTS ON SHARE PRICE

This research is a quantitative research using a causality approach that will see and identify the causes and effects of the EPS variable on stock prices. The population in this study are all companies included in the 2018-2019 LQ-45 list, which are 45 companies. The sample was taken based on purposive sampling criteria so that 27 companies were obtained, with the data used were secondary data in the form of published financial statements and can be accessed through www.idx.co.id. The data analysis technique used simple linear regression with SPSS for windows 24.0 test tool. The results of the study show that the EPS variable has a positive and significant effect on the company's share price, this means that EPS is essentially considered important to determine the amount of the stock price and company value, so that most investors can make decisions based on EPS. The evidence that EPS has an effect on stock prices is the 27 companies listed in LQ-45 showing a change in the increase or decrease in the value of EPS which has an effect on the occurrence of an increase or decrease in the Company's stock price.

Pengaruh Tingkat Percaya Diri CEO terhadap Risiko Penurunan Harga Saham dengan Efisiensi Investasi sebagai Mediasi

CEO has a role to make investment decisions. Age, education and work experience are factors can effect the CEO's confidence level to making decisions. When the investment decisions biased and risk lowering the company's performance, there will be a CEO's decision to delay bad information. Long delays bad information will increase stock price crash risk on future. Therefore, the purpose of this study is to examine the effect of the CEO's confidence level on future stock price crash risk with investment efficiency as a mediation. The manufacturing sector is used as the object of research with 98 companies as research samples with a research period from 2011-2019. Path analysis was used as an analytical technique and Sobel test as a measure of mediation. The results of this study prove that investment efficiency is able to mediate the effect of CEO's confidence level on future stock price crash risk.
 Keywords: CEO's Confidence Level; Investment Efficiency; Future Stock Price Decrease Risk.

Management geographical proximity and stock price crash risk

PurposeThis study provides empirical support for the cultural economics model between executive team and firm performance and offers important implications for policy selection and appointment of managers in China.Design/methodology/approachFrom the perspective of relationship embeddedness, the authors explore the impact of management geographical proximity (GP) on stock price crash risk in China. Using archival data from China's unique dataset about birthplace culture, the authors find that management GP experiences a large increase in corporate stock price crash risk for the period 2009–2018.FindingsThe impact of management GP on stock price crash risk is more pronounced when the company is located in areas with weaker formal legal environment and stronger Confucian culture. Furthermore, the impact has a significant links with firm characteristics such as information transparency, over-investment and tax aggressiveness.Originality/valueFirst, the research extends the literature on the empirical determinants of stock price crash risk. These studies focus on formal institution, not on informal institution, such as relational culture. Second, the research provides evidence for economic consequences on relational governance from executive birthplace culture to explore the economic consequences of geographical relational governance but takes stock price crash risk to present executives' behavior strategies and market reaction via exploring asymmetrical variation of market stock price. Finally, the paper provides reference to corporate governance arrangement and executive appointment.

Pengaruh Perubahan Tarif Pajak Penghasilan, Struktur Modal Dan Kebijakan Dividen Terhadap Harga Saham

The purpose of this study is to analyze the effect of changes in income tax rates according to PP no. 30 of 2020, capital structure and dividend policy on stock prices in manufacturing companies in the Food and Beverage sector listed on the Indonesia Stock Exchange in 2016 –2020. This type of research uses descriptive quantitative. The population in this study were 30 companies. The sampling technique in this study was purposive sampling, so that a sample of 15 data from 3 companies was obtained for 5 years. Methods of data analysis using multiple linear regression analysis with the help of SPSS application. The results of the partial analysis show that the tax rate and dividend policy have no effect on stock prices. While the capital structure has a positive influence on stock prices. However, simultaneously stock prices are affected by changes in income tax rates, capital structure, and dividend policy. Based on the results of the study, it can be concluded that the high and low tax rates are not able to affect stock prices. the higher the capital structure will be followed by an increase in stock prices. While the dividend policy can not affect changes in stock prices.

CEO regulatory focus and myopic marketing management

This study details the mechanisms on how CEO regulatory focus affects the salience of the gains versus losses involved in myopic marketing decision-making, and how such CEO psychological attributes interact with internal equity-based compensation, external pressure from equity analysts, and environmental turbulence to affect firms’ myopic marketing management propensities. We find that when faced with short-term earnings pressure to meet earnings expectations and when time is no longer a resource, predominantly promotion-focused are more likely to engage in myopic marketing management to benefit from the temporary stock price increase, which comes from meeting or beating earnings expectations. Conversely, predominantly prevention-focused CEOs are less prone to such short-termist actions which results in long-term value loss. For the moderating variables, we find that: (1) equity-based compensation tends to attenuate myopic marketing tendencies of promotion-focused CEOs but have no impact on prevention-focused CEOs, (2) whether equity analysts improve monitoring or aggravate short-term earnings pressure depends on the CEO’s regulatory focus, and (3) environmental turbulence does not increase the myopic marketing management tendencies of predominantly promotion-focused CEOs but rather intensifies the relunctance of prevention-focused CEOs to take short-termist actions. We further find that myopic marketing management mediates the impact of CEO regulatory focus on future firm performance. These findings have important implications for firms and boards when selecting new CEOs and structuring the compensation of existing CEOs. Firms need to simultaneously consider the fit between the CEOs’ regulatory focus, firms’ needs, the business environment, as well as CEO compensation structure.

How does performance vary between early and late adopters of Industry 4.0? A qualitative viewpoint

PurposeIndustry 4.0 is a new trend among organizations. Some organizations have been early adopters or later adopters of Industry 4.0. The purpose of this paper is to investigate how performance effects vary between early and late adopters of Industry 4.0.Design/methodology/approachThis study applies a qualitative research methodology using grounded theory. 14 senior management professionals who have implemented Industry 4.0 participated in this study through a theoretical and snowball sampling approach. These professionals were from manufacturing and service sectors, from North America, Europe and Asia. The study used semi structured open-ended interviews to capture the organizational performance on operational, financial, environmental and social dimensions.FindingsThe findings were analyzed in terms of four broad themes which emerged from the interviews. In operational performance the operational and implementation cost will be higher for early adopters. The late adopters may enjoy the advantage in terms of improved business models. In terms of financial performance, the early adopters may see a marginal increase in profit and increased stock price compared to late adopters. The performance on the environmental dimension will see early adopters enjoying material efficiency, energy savings and an improved image of the company compared to late adopters. In social performance, the early adopters will provide a better quality of work life, safer manufacturing environment. However, the resistance from labor unions will be higher for early adopters compared to late adopters.Practical implicationsOrganizations must decide the timing of implementation of Industry 4.0. This study will act as a guide wherein they can decide to be an early adopter or late adopter based on knowledge of the resulting performance consequences.Originality/valueThis is the first paper that studies the performance effects of early versus late adopters of Industry 4.0.

The perfect storm of personal consumption

The COVID-19 pandemic forced the governments of almost all countries to introduce lockdowns in 2020, which sharply reduced the supply in a number of large service sectors: transport, recreation, catering, tourism. The recession began without a crisis, and the unique supply of cheap money and fiscal incentives prevented the development of a “liquidity crunch”. On the contrary, it led to an increase in stock prices, real estate prices, and a reduction in bankruptcies. There was no drop in the value of pension and investment funds. The working population has faced a reduction in employment in labor-intensive service industries, a violation of traditional lifestyle models. The course of the recession in these conditions has changed the structure of personal consumption in developed countries, with its severe adaptation in medium-developed and less developed countries. The pandemic and the recession have caused an uneven compression of activity and consumption across social strata that leads to an increase in social disparities on exiting the recession. The drivers of the demand-side recovery in developed countries are the growth of investments in housing and durable goods, and developing countries are gradually restoring normal consumption of non-durable goods and exports.

Interdependence between monetary policy and asset prices in ASEAN-5 countries

In this paper, we investigate the interdependence between monetary policy and asset prices in ASEAN-5 countries. Within country-specific models and proxying asset prices by the composite stock market indices of these countries, we find strong interdependence between monetary policy and asset prices. We show that real stock prices decline as interest rates increase due to a contractionary monetary policy shock. Interest rates rise in response to an increase in real stock prices induced by a real stock price shock, although it does so a couple of months after the shock. We find the interdependence of monetary policy and asset prices to hold up within panel models. The delay in interest rate response to real stock price shocks originates from three of the ASEAN-5 countries, namely Indonesia, the Philippines, and Thailand.

The Effects of Leverage, Investment Decision, Dividend Policy and Profitability, on Firm Value of the Automotive Sector Companies

<p>This paper examined the impact of leverage, investment decision, dividend policy and profitability on the firm value of the automotive sector companies from 2010 - 2016. There are 12 firms chosen using a purposive sampling technique implementing specific criteria. Those firms are publicly listed on the Indonesia Stock Exchange. Panel data regression (Pooled OLS, Fixed Effects, and Random Effects) is used in this research. The results have shown that leverage, dividend policy and profitability, have a positive and significant impact on firms' value. A rise in these factors will lead to an increasing stock price, whereas even though has has a positive impact, but investment decision not a substantial effect on company value.</p>

Petrol ve Doğalgaz Fiyatları İle Hisse Senedi Fiyatları İlişkisi: BİST Sinai Sektöründe Ampirik Bir Araştırma(The Relationship Between Oil and Natural Gas Prices and Stock Price: An Empirical Research in BIST Industrial Sector)

Purpose – Determining the factors affecting stock prices is an important research subject in terms of finance. The aim of this study is to determine the relationship between oil and natural gas prices and the stock prices of companies operating in the industrial sector. Design/methodology/approach – For the purpose of the study, the panel cointegration test was applied with crude oil, Brent oil and natural gas prices in US dollars and US dollar stock prices of 111 companies included in the Borsa Istanbul Industrials index and whose data are available continuously for the period of January 2010 and December 2019. Three separate models were designed in which stock prices are the dependent variable and crude oil, Brent oil and natural gas prices are independent variables respectively. Long and short term causality relationships were investigated with panel vector error correction model for models with cointegration. Findings – As a result of the analysis, the cointegration relationship between oil prices and stock prices has been determined. On the other hand, a long-term relationship could not be determined between natural gas prices and stock prices. The panel vector error correction models also conclude that the increase in oil prices increases stock prices. Discussion – In the study, it was determined that the increase in the price of oil, which is a cost element for industrial enterprises, increases the prices of stock. The fact that the increase in oil prices expresses the increase in production, the parties to whom income transfer is made due to the rising oil prices evaluate their income as investment in capital markets or the increase in the net cash inflows of the enterprises that increase their sales prices in parallel with the increase in oil prices may result in these findings.

Pengaruh Umur CEO, Struktur Dewan Komisaris, Frekuensi Rapat Komite Audit, Konsentrasi Kepemilikan, dan Tenur Audit terhadap Volatilitas Idiosinkratik

Idiosyncratic volatility is a series of sharp increase or decreas in stock prices due to a company's fundamental. This study argues that transparent financial reports should reduce idiosyncratic volatility. Transparent financial reports are the function of CEO age, board of commissioner size, board of commissioner meetings frequency, Audit Committee meetings frequency, ownership concentration, and audit tenure. Therefore, this study examines the effect of these variables on idiosyncratic volatility. Samples were gathered from Indonesian public firms for the periode of 2014-2018. Using regression analysis for the test of hypothesis, results show that while board of commissioner meetings frequency and audit tenure have negative effects on idiosyncratic volatility, the size of the board of commissioners, concentration of ownership have positive effects on idiosyncratic volatility. On the contrary, CEO age and audit committee meetings frequency have no effects on idiosyncratic volatility.

Digital Signal Processing for Predicting Stock Prices

With the exponential growth of big data and data warehousing, the amount of data collected from various stock markets around the world has increased significantly. It is now impossible to process and analyze data using mathematical techniques and basic statistical calculations to forecast trends such as closing and opening prices, as well as daily stock market lows and highs. The development of smart and automated stock market forecasting systems has made significant progress in recent years. Digital signal processing is required for analysis and preprocessing because of the accuracy and speed with which these large amounts of data must be processed and analyzed. In this paper, we evaluate some of these predictive algorithms based on three parameters such as speed, accuracy and complexity, we analyze the data using the dataset from kaggle.com and we implement these algorithms using pythons. The results of our analysis in this paper shows a significant correlation between the yearly prices until the year 2018 where there is a significant increase in stock price.

Risk‐Taking Incentives and Earnings Management: New Evidence*

ABSTRACTWe reexamine the positive association between stock option vega and earnings management previously documented by Armstrong, Larcker, Ormazabal, and Taylor (2013; henceforth, ALOT). In contrast to ALOT, prior empirical research and practitioner literature emphasizes earnings management's goals of increasing stock price and reducing volatility. Specifically, we assess whether the association is robust to (i) employing discretionary accruals that are less prone to misspecification, (ii) focusing on a more recent time period, and (iii) including additional controls for period‐specific factors. Our main findings are as follows. First, we fail to find a positive association between vega and earnings management after controlling for performance‐related misspecification in discretionary accruals. Second, we find no association between vega and earnings management in a more recent time period, suggesting the results of ALOT may be sensitive to period‐specific factors. Last, the positive association vanishes when we control for year fixed effects, growth opportunities, or monitoring, suggesting the original results of ALOT's research may be sensitive to correlated, omitted variables. Overall, our results question the extent to which vega incentivizes earnings management. Our results may be of interest to boards of directors in designing executive compensation contracts, to regulators in crafting policies that maintain high levels of financial reporting quality, and to researchers seeking to identify settings where earnings management incentives are most salient.

Exploring Nonlinear Effects of CEO Power on Stock Price Crash Risk

This study investigates the role of powerful CEOs on future stock price crashes. Our results reveal an inverted U-shaped relationship between CEO power and stock price crash risk. Specifically, powerful CEOs tend to conceal more negative news, increasing stock price crash risk, which indicates the presence of incentives to take private benefits. However, extremely powerful CEOs decrease stock price crash risk, suggesting that sufficient entrenchment may mitigate further private benefits from concealing negative news. Additionally, the nonlinear relationship is observed only in competitive industries. This fact implies that strong external monitoring mitigates CEOs’ incentives to pursue private benefits, but raises extremely powerful CEOs’ career concerns, which encourages them to conceal more negative news.