Leverage Value Research Articles

Multidimensional analysis of marine fishery resources of Maharashtra, India

The performance of 18 marine fishery resources of the state of Maharashtra in the western region of India was studied using modified and validated RAPFISH methodology (RAPFISH-India), with 45 identified attributes distributed among five evaluation fields: ecology, economic, social, technology and management. The technique relies upon ordination of scored attributes using multi-dimensional scaling. An interdisciplinary approach was carried by analyzing fisheries within each discipline by using all the attributes. Leverage analysis is used to determine the influence of attributes on the ordination. Group wise fishery sustainability scores of all five dimensions were averaged and results indicate that about 60% of fisheries studied fall under ‘Quite Sustainable’ category. The low leverage values indicate the multivariate nature of the ordinations and that the results are not dominated by any one attribute. Fishery specific and dimension specific RAPFISH results are to be considered as very important and shall form the basis for developing fisheries management plans in Maharashtra state.

Association between Degree of Leverages and Firm Value

<p>This study aims to empirically investigate the association between degree of leverages, operating and financial, and firm value in the context of India, one of big ten emerging markets (Garten, 1997). This study examines this association for 231 manufacturing firms listed in National Stock Exchange (NSE) in India over a period from 2001-2002 to 2010-2011. The independent variables, degrees of operating and financial leverage, and a market price-based dependent variable, called price-earnings ratio as a proxy of firm value, are taken to examine this relationship by using standard ordinary least square regression models at the levels of individual firm and portfolio of firms. The findings of this study show a statistically significant negative relationship between firm value and degree of operating leverage and a statistically insignificant relationship between firm value and degree of financial leverage both at the levels of individual firm and portfolio of firms. Using the data from a country like India, one of fastest growing emerging markets in the world, this study provides an important insight on the effect of leverages on the firm value, the association between independent accounting variables and stock price-based dependent variable, to the practitioners, the scholars and the finance managers. </p>

Information asymmetry, leverage and firm value: Do crisis and growth matter?

Drawing on pecking order and agency cost theories, we assess the extent to which information asymmetry is an important determinant of firm value and the extent to which this relationship is conditional on the leverage level of firms. We also assess the impact of information asymmetry on firm value during the pre and post 2007/09 financial crisis period and for high and low growth opportunity firms. Using a large sample of UK firms, our empirical findings suggest that information asymmetry adversely impacts firm value, and that this effect decreases with firm's leverage. We also find that leverage has a negative effect on firm value, and that the marginal effect of leverage is lower for information asymmetric firms. Further, we find that the relation between information asymmetry and firm value is more pronounced in the post-crisis period than the pre-crisis period. Finally, we show that the impact of information asymmetry on firm value is higher (lower) for firms with high (low) growth opportunities.

Capital structure effects on the prices of equity call options

We examine whether values of equity options traded on individual firms are sensitive to the firm’s capital structure. We estimate the compound option (CO) model, which views equity as an option on the firm. Compared with the Black-Scholes model, the CO model with a term structure of volatility (TSV) reduces pricing errors by 20% on average. The compound option effect is particularly strong for highly levered firms and long-term options, in which the pricing improvement is up to 70% of the Black-Scholes error. Without a TSV, the CO model reduces pricing errors of in-the-money options by 12.74% on average and for out-of-the-money by 9.22%. We show that the CO model implies a market value of firm leverage and allows imputation of the firm’s implied volatility, both of which have potential applications in corporate finance.

New correlations for predicting pure and impure natural gas viscosity

Accurate determination of natural gas viscosity is important for successful design of production, transportation, and gas storage systems. However, most of available models/correlations suffer from complexity, robustness, and inadequate accuracy especially when wide range of pressure and temperature is applied. Present study illustrates development of two novel models for predicting natural gas viscosity for pure natural gas (CH4) as well as natural gas containing impurities. For this purpose, 6484 data points have been gathered and analyzed from the open literature covering wide range of pressure, temperature, and specific gravity levels, temperature ranges from −262.39 to 620.33 °F (109.6 to 600 K), pressure ranges from 1.4508 to 29,000 psi (0.0100–199.94801 MPa), and gas specific gravity ranges from 0.553 to 1.5741. Sensitivity analysis on the collected data points through design of experiments algorithm showed that pseudo reduced pressure and pseudo reduced temperature are the most effective parameters as the inputs of the models. The Leverage Value Statistics is applied and doubtful data points are determined.The average absolute relative error and the coefficient of determination of the proposed models for predicting pure/impure natural gas viscosity on a wide range of conditions are 5.67% and 1.87%, 0.9826 and 0.9953, respectively. Reliable accuracy of proposed models in comparison to eight commonly used correlations makes them attractive for possible implementing in natural gas simulation/modeling applications.

Leveraging Values Diversity: The Emergence and Implications of a Global Managerial Culture in Global Organizations

The debate about divergence and convergence of managerial values has focused on the effect of macro-level influences on values. In contrast, little attention has been paid to micro-level influences, i.e., influences operating at the individual level. We therefore examine and identify micro-level influences on managerial values in global organizations and look at their impact at the group and organizational level. We start by reviewing the concepts of convergence and divergence as well as Ralston’s (e.g., 2008) notion of crossvergence. Subsequently, we identify examples in the literature where convergence has occurred for some groups of managers and not others. We argue that managers with similar values will cluster into global values and local values clusters with convergent and divergent values, respectively. We call this phenomenon groupvergence. Propositions are presented about the individual level causes of globalizing managerial values, relating it to exposure to other cultures as well as direct socialization into global values in a professional or a work setting, such as a global organization. The implications of the co-existence of global values and local values clusters in global organizations are examined, including the potential mediating boundary spanner role which members of global values clusters may play between global and local subgroups, groups and organizations. The analysis suggests that the presence of global values and local values clusters in global organizations can allow organizations to leverage value differences both inside and outside of their boundaries and can thus have a positive influence on organizational functioning and effectiveness.

New Applicable Approach to Examine The Leverage–Value Relationship

New Applicable Approach to Examine The Leverage–Value Relationship

A Rapid Learning Approach to the Knowledge Modeling of Radiation Therapy Planning

The purpose of this study is to implement a rapid learning method to train the knowledge models to predict the organ-at-risk (OAR) dose sparing in radiation therapy (RT) based on an array of patient anatomical features. We also aim to establish the evaluation criteria and validation method to ensure an accurate and efficient learning process. A rapid learning approach is utilized to train the knowledge models in this study. 100 clinical cancer cases in the pelvic region were retrospectively analyzed. Among them, 40 cases are low-tointermediate risk prostate cases (Type I), 20 are high-risk prostate cases with lymph node irradiation (Type II), 40 are anorectal cancer cases (Type III). Starting from a base model for type I cases, increasing number of cases with more complex planning-target-volume (PTV)-OAR anatomies (type II and type III) were continuously added into the training case pool. The studentized residual and the leverage values are calculated as evaluation criteria at each step. The efficiency and accuracy of the learning method was quantified by the learning curve. The gEUD in the bladder and rectum are compared between the model predictions and actual values for the validation cases. The Median of the Absolute value of their Differences (MAD) are calculated for the validation cases. The MAD of the predicted OAR gEUD in all three types of cases gradually decreases when increasing number of training cases are added in training. The knowledge models learned by this method reach comparable level of prediction accuracies as in batch training mode even less training cases. The rapid learning approach is able to learn knowledge models for multiple cancer types in the pelvic region with comparable accuracy to the batch training method and with improved efficiency. This approach will facilitate the implementation of the knowledge based radiation therapy planning in clinics.

Determinants of leverage in mining companies, empirical evidence for Latin American countries

This paper applies static and dynamic panel data methods to explore the determinants and the trend of leverage across 14 mining firms in Mexico, Colombia, Chile, Brazil and Peru from the first quarter in 2004 to the third quarter in 2014, and also contrasts the results with relevant theories. We find that tangibility increases leverage, while growth and size do not have significant effect. Profitability reduces leverage, which is consistent with the first alternative of the Hierarchical Order theory. The Colombian firms start with lower levels of leverage and reduce it as tangibility, size, growth and profitability increase and hence, these firms are more financially stable, and their performance, in particular, is consistent with the first alternative of the Hierarchical Order theory. Lagged values of leverage are more robust determinants of present values of leverage than the other explanatory variables.

The cost of collateralized borrowing in the Colombian money market: Does connectedness matter?

We estimate two standard spatial econometric models in order to study the cost of collateralized borrowing among Colombian financial institutions, and its relationship with traditional determinants (leverage, size, and borrowing concentration), and with the observed linkages among financial institutions (spatial variables). Our main findings indicate that (i) the selected models are able to capture the extent and significance to which linkages matter for money market's liquidity pricing in the form of a spatial dependence parameter; (ii) spatial effects play a significant role in the pricing of liquidity in the collateralized money market; (iii) direct and spill-over effects from financial institutions’ size and the spatially lagged value of financial leverage and borrowing concentration most significantly determine the cost of collateralized borrowing; (iv) traditional determinants are of low explanatory power by themselves. Concurrent with contemporary lending relationships literature, our results emphasize the importance of connectedness among financial institutions, and are essential in the context of a macro-prudential perspective of financial stability and systemic risk.

Biogeographical variation in the potential effectiveness of prescribed fire in south‐eastern Australia

AbstractAimPrescribed fire is a common land management for reducing risks from unplanned fires. However, the universality of such effectiveness remains uncertain due to biogeographical variation in fuel types, climatic influences and fire regimes. Here, we explore biogeographical patterns in the effectiveness of prescribed fire by calculating leverage (the reduction in unplanned area burnt resulting from recent previous area burnt) across south‐eastern Australia over a 25 year period.LocationThe 30 bioregions of south‐eastern Australia.MethodsWe quantified leverage in each bioregion from fire records from 1975–2009, controlling for variation in annual weather. We also identified potential drivers of variation in leverage by relating the bioregional leverage values to measures of fuel type and growth, climate, and weather extremes.ResultsLeverage was inferred in four bioregions while in the other 26 bioregions no leverage was detected or prescribed fire had the opposite effect (fire‐follows‐fire). Leverage occurred in the forested eastern section of the study area, where rainfall, fuel load and fire activity is high and fire weather is mild. In all bioregions, weather was a stronger predictor than past‐fire extent of area burnt in a particular year.Main conclusionsOur analysis of leverage shows that the effectiveness of prescribed fire varies regionally in predictable ways, which means that fuel management strategies applied in one region are not necessarily applicable in another. In most bioregions prescribed burning is likely to have very little effect on subsequent extent of unplanned fire, and even in regions where leverage occurs, large areas of treatment are required to substantially reduce the area burned by unplanned fire.

Everyone loves a secret: Why consumers value marketing secrets

Everyone keeps secrets, and organizations are no exception. The current literature on secrecy in organizations is centered on the managerial perspective of secrets as competitive resources. In contrast, this conceptual article takes a consumer-centric approach and presents a detailed explanation of why and how marketing secrets create value for consumers. First, a discussion of agency highlights three consumer roles in the marketing of secrets: Insiders, who know the secret; Aspirants, who know of the secret; and Outsiders, who do not know of the secret. Second, based on two mechanisms of awareness and primacy, a value chain of secrecy is proposed that presents four types of value that consumers can extract from secrets: acquisition value, acknowledgment value, leverage value, and dissemination value. Lastly, secrecy is revisited as a strategic marketing tool for creating value for consumers.

Pass-Through Valuation

Noted scholars argue that (1) economic models of capital taxation have been inadequately adapted to owner-managed enterprises and (2) capital structure researchers have used the wrong models while also improperly measuring key variables. Thus, a model that can overcome these problems should be of interest to academics when teaching capital structure theory and practitioners when determining optimal debt levels. This paper contributes to capital structure practice by using a model that is adaptable to owner-managed enterprises like pass-throughs while also containing relevant variables that are measurable. This paper should be valuable to academics and practitioners in the following ways. First, we examine the effects of personal tax rates on a pass-through’s capital structure choice. Second, we offer rules for managers of pass-throughs on how to choose an optimal amount of debt. Third, we show that increasing market risk by doubling betas does not affect our major conclusions governing a pass-through. Fourth, we compare the pass-through and C Corp gains to leverage values when all factors are the same except tax rates that are unique to the ownership type.

Ownership structure, leverage and firm value

Ownership structure, leverage and firm value

On accurate determination of PVT properties in crude oil systems: Committee machine intelligent system modeling approach

This study is focused on accurate determination of PVT properties of reservoir oil using an ensemble approach referred to as committee machine intelligent system. PVT properties of interest are oil formation volume factor (Bo) and bubble point pressure (Pb). Committee machine intelligent system model developed in this work combine multi-layer perceptron network, radial basis function network, and least squares support vector machine via a modified weighted averaging method, while optimizing these weights using genetic algorithm. Developed committee machine intelligent system model was found to accord excellently with experimental data yielding correlation coefficients (R2) of 0.980 and 0.976 for bubble point pressure (Pb), and oil formation volume factor (Bo), respectively. Comprehensive comparisons were also carried out between a variety of PVT prediction models and committee machine intelligent system model developed in this study. At the end, leverage value statistics method was applied to detect and identify some probable outlying points from the gathered databases.

Mixture Experiments in the Interior: Yantram Designs

We introduce a very rich class of mixture designs in the interior of the simplex, which are useful when all experiments must constitute a complete mixture, that is, when none of the components is absent from the mixture. These designs are called yantram designs, as they are directly derivable from the Hindu yantrams, which are certain numerical configurations of positive integers having certain properties. Not only do these designs work well within the interior of the simplex, they can also be easily refined to satisfy the constraints, if there are any, on the mixture components. Leverage values for such designs are more evenly distributed among interior points compared to simplex-lattice or simplex-centroid designs, which tend to place higher leverages on the vertices or edge design points where the experiments may not be feasible.

Interspecies quantitative structure–activity–activity relationships (QSAARs) for prediction of acute aquatic toxicity of aromatic amines and phenols

We propose interspecies quantitative structure–activity–activity relationships (QSAARs), that is, QSARs with descriptors, to estimate species-specific acute aquatic toxicity. Using training datasets consisting of more than 100 aromatic amines and phenols, we found that the descriptors that predicted acute toxicities to fish (Oryzias latipes) and algae were daphnia toxicity, molecular weight (an indicator of molecular size and uptake) and selected indicator variables that discriminated between the absence or presence of various substructures. Molecular weight and the selected indicator variables improved the goodness-of-fit of the fish and algae toxicity prediction models. External validations of the QSAARs proved that algae toxicity could be predicted within 1.0 log unit and revealed structural profiles of outlier chemicals with respect to fish toxicity. In addition, applicability domains based on leverage values provided structural alerts for the predicted fish toxicity of chemicals with more than one hydroxyl or amino group attached to an aromatic ring, but not for fluoroanilines, which were not included in the training dataset. Although these simple QSAARs have limitations, their applicability is defined so clearly that they may be practical for screening chemicals with molecular weights of ≤364.9.

Valuation of Corporate Shares, Financial Characteristics, the Impact of Corporate Social Responsibility and Corporate Governance (The Case of Indonesia)

This study aims to prove that if there has been an increase in the value of assets, leverage and corporate social responsibility influence on increasing the value of shares in the Indonesian capital market as a result of the implementation of good corporate governance in Indonesia. This study is a survey of a sample of 19 corporations that have implemented good governance and implement corporate social responsibility. We used fixed effect multivariate regression analysis to examine the dependent variables influences the independent variables. The result of the study show that by implementing good corporate governance can increase the value of corporate assets as well as the impact on the increase in value of the corporate stock market value. This is consistent with Dowling’s research that the implementation of good corporate governance is associated with increased long-term corporate image that will have implications on the value of the corporation. Good governance can explain the relationship between the various parties participating in the corporation that determines the direction of the value of corporate stocks. The model as a whole is significant explaining variation in dependent variable. Which is explaining by R-square 0.68 means that 0.32 explaining by external variables out of the model. Corporate governance influence to corporate size, leverage, agency cost and corporate social responsibility is up to 0.5275 it means moderate strong. Corporate governance influence to corporate stock value is only 0.0084 it means less significant. While corporate size, leverage, agency cost and corporate social responsibility influence to corporate stock value is 0.1477 means less significant.

Global patterns in fire leverage: the response of annual area burnt to previous fire

Prescribed fire is practiced around the world to reduce the effect of unplanned fire, but we hypothesise that its effectiveness is proportional to the mean annual area burnt by unplanned fire, which varies among biomes. Fire history mapping was obtained for six global case studies from a range of biomes: Portugal, Spain (both Mediterranean), Alberta (boreal Canada), Sequoia and Kings Canyon National Parks (montane USA), the Sandy Desert (arid Australia) and Kruger National Park (South African savanna). Leverage is the unit reduction in unplanned fire area resulting from one unit of previous fire as measured at a regional scale over a long period. We calculated leverage for each case study using statistical modelling of annual area burnt, controlling for annual climatic variation. We combined the six leverage values with those from four previously published cases to conduct a global test of our hypothesis. Leverage was high in Portugal (~0.9) and moderate in the Sandy Desert (~0.3). However, the other case studies showed no evidence of leverage: burnt area was not influenced by past fire. In all regions, climatic variation had more influence than past area burnt on annual area burnt. The global analysis revealed a positive relationship between mean area burnt and leverage but only when outlying cases were removed. In biomes with low fire activity, prescribed fire is unlikely to reduce unplanned fire area at all, while for many others, the return for effort is likely to be low. Lessons derived from one biome cannot necessarily be applied to another.

An empirical assessment of the effect of corporate international diversification on firm debt and value

We investigate whether firm's foreign assets and foreign sales are associated with its leverage and excess firm value. Our analysis, of a sample of 200 firms and 1,037 firm year-observations during the time period of 1998 to 2008, indicates a positive and significant relationship between long-term debt and foreign assets. Our findings also show that long-term debt is negatively related to foreign sales. These findings indicate that international involvement can significantly affect the size of debt in a firm's capital structure. Changes in firm value are positively related to international diversification, indicating that significant gains accrue for shareholders of internationally diversified firms. These results suggest that the mode of a firm's entry into foreign markets has different market implications for shareholders and debt-holders. We also find that significant wealth gains accrue to shareholders of diversified firms with high or medium size debt structure, when taking into consideration of foreign diversification. These results have important implications on how firms design, operate and manage their loan portfolio. Our results are robust regarding the firm's debt and valuation characteristics, and suggest that foreign operations do not destroy firm value.