Lower Returns Research Articles

Business Strategy and M&A Transactions

This paper establishes the relation between the target’s business strategy and M&A transactions. We find that acquirers purchasing an innovation-oriented firm (prospector) experience significantly lower announcement returns and worse long-run operating performance than when they purchase an efficiency-oriented firm (defender). The effect is more pronounced for the acquirer with severe agency problems. Further analysis finds that synergies can be obtained from combining business strategies. We also show that acquirers respond to the presence of a prospector target by using stock payment in their offers.

Bangladesh's pathways to climate-resilient development: A methodical review

Climate resilient development pathways (CRDP) are procedures that reinforce sustainable development and reduce poverty and inequalities while meeting adaptation and mitigation targets. The study systematically assessed Bangladesh's efforts to combat climate change and evaluated its progress toward CRDP with a degree of confidence approach. It also assessed climate change vulnerability, national climate change plans and policies, climate finance conditions, and environmental sustainability. The study revealed that the recent climate change plans and strategies have transformative, social inclusiveness, gender responsiveness, climate resilience, institutional flexibility and coordination, and target setting and monitoring attributes from a moderate to large extent. However, to implement its recently developed climate plans like the Mujib Climate Prosperity Plan, Delta Plan, NAP, and NDC, where funding is essential—the nation needs USD 533.7 billion. The study suggests that though the country has implemented several plans and strategies in recent decades, uneven progress has appeared in some important socio-economic and environmental indicators as well as SDGs which signifies low return against investment. It can be concluded that ensuring maximum socio-economic and environmental return on investment, long-term climate finance, strengthening local govt. organizations, adopting region specific and holistic approaches with private sector engagement would advance CRDP attainment as well as a nature positive economy and system transition in Bangladesh.

Operation Risk Simulation and Interaction Impact of Stormwater and Sewage Systems Based on Storm Water Management Model

With the increasing urbanization rate, higher demand is placed on drainage systems, necessitating analysis of their risk profiles. While many studies focus on the individual hydraulic modeling of stormwater and wastewater systems when considering operational risks, they often overlook the exacerbating effects of combined stormwater and wastewater flows on each other’s risks. In this study, we constructed a model of the combined stormwater and wastewater drainage system in Lijiao, Guangdong Province. We analyzed the operational risks of both stormwater and sewage networks in different scenarios, focusing on full-load pipes, overload pipes, node overflows, and minimum flow velocities. Furthermore, we compared the exacerbating effects of sewage and stormwater on each other’s network operational risks. Simulation results indicated that, for sewage networks with combined sewer sections, the lengths of full-load pipes and overload pipes increased by an average of 27.4% and 16.3%, respectively, during rainy weather scenarios compared to dry weather. After considering the inflow of sewage into combined sewer sections, the average length of full-load pipes increased by 3.8 km, overload pipe length increased by 1.1 km, and overflow volume increased by 2.26 × 104 m3. As the return period of rainfall events increases, these inter-system impacts gradually diminish. Therefore, when modeling drainage systems and assessing operational risks, particularly during low return period rainfall events, the inclusion of both stormwater and sewage in combined sewer networks should be comprehensively considered.

A new nonparametric copula framework for the joint analysis of river water temperature and low flow characteristics for aquatic habitat risk assessment

This study proposed a nonparametric copula hazard framework in the joint risk of river water temperature (RWT) and low flow (LF) events for aquatic ecosystems, specifically ectotherm fish. This nonparametric copula density can adapt to any mutual dependence structure, providing greater flexibility. This can reduce the risk of misspecification if the underlying assumption is violated compared to conventional parametric or semiparametric copula settings. The analysis uses nonparametric copulas densities like Beta kernel copula estimator (BKCE), Bernstein copula estimator (BCE), and Transformation kernel estimator (TKE), conjoined with Gaussian Kernel density estimations (GKDEs) and parametric marginals for joint annual maximum RWT (AMRWT) and LF. The study compares different models for analyzing five Swiss river basins: parametric copulas with best-fitted GKDE and parametric margins, versus nonparametric copula. Six bandwidth selectors are estimated to fit GKDE. BKCE with GKDE margins outperformed most stations, while TKE and BCE density with GKDE margins work best for only one station. However, at one station, BKCE with best-fitted parametric margins is outperformed. All stations except Station 2473 are characterized by temperature and low flows that may be conducive to stress of a number of aquatic species, causing high AMRWT (exceeding 19 °C) and minimum LF or specific discharge, SD) quantiles at low AND-joint return periods (RP). AND (i.e. low flow AND high temperature) hazard events are less likely to occur together than OR hazard events, while univariate RPs happen more often than OR-joint RPs. In addition, the joint RP of AMRWT, given LF at different percentiles, significantly affected AMRWT for various LF conditions. Higher AMRWT with low flow conditions results in lower joint RP (except station 2473), and this stress level would be reduced when conditioned with high LF events at the same AMRWT. Station 2473 has high LF even at low percentiles, and with low AMRWT makes it very less stressful than other station under different LF conditions. Summer river flow maintenance can improve aquatic environments with high RWT. Analyzing joint statistics is crucial to understanding mutual risk in freshwater ecosystems.

Climate shocks, institutional investors, and the information content of stock prices

We analyze how the materialization of physical climate risk in the institutional investors’ portfolios spurs a propagation effect on the information content of stock prices. Institutional investors with a relatively high portfolio exposure to natural disasters divest from disaster-hit stocks, decrease the trading intensity in non-hit stocks, and their trading decisions predict low medium-term returns. At the firm-level, institutional investors propagate the effects of disasters to non-hit stocks through reduced incorporation of firm-specific information, especially when the stocks represent a low portfolio weight. Combined, these results suggest that natural disasters trigger a rational reallocation of information-processing resources by institutional investors.

Balancing Study and Work: Heterogeneous Impact of the Bologna Reform on the Labour Market

AbstractThe Bologna reform, the largest European education reform, was implemented in Russia in 2011. The reform shortened the duration of some undergraduate programmes by 1 year and compressed their curricula. Using a difference‐in‐differences design, I find that the reform had no short‐ or medium‐term adverse effects on employment. However, I find that null average effects on wages mask considerable heterogeneity. I find that female students with high relative returns worked less during their studies, invested in their human capital, and secured stable wages. In contrast, male students with low relative returns underinvested in human capital and experienced a decline in wages.

How suitable are equity release mortgages as investments for pension funds?

This article examines the claim that equity release mortgages, the U.K. equivalent of reverse mortgages in the U.S., are suitable investments for pension funds. We present valuation, stress test and scenario analysis results that suggest that equity release mortgages are unsuitable for pension funds because: (i) they bear returns that are typically below the risk-free rate; (ii) they are not hedges for annuity books, let alone good hedges; and (iii) they are heavily exposed to house price risk, which annuity books are not. Our results suggest that equity release mortgages meet none of these criteria to be suitable for pension funds and are almost entirely dominated by risk-free government bonds. We offer an explanation for why investors appear to be unaware of the low returns on equity release mortgages.

A Study on Risk and Return Analysis and Data Envelopment Analysis of Public and Private Sectors Banks: A Five -Year Study (2018-2022)

Risk and returns are like two faces of the same coin, if an investor wants to gain higher returns, he must also accept the fact that this would also increase the amount of risk involved. Most of the times, individual decision process is influenced by risk and return analysis. The study is focused on analysing the performance of those nationalized banks listed in the NSE with respect to return, risk and beta for the period 1st January 2017 to 31st December 2017. The term risk is a situation in which the possibility of the consequence can be predicted, but uncertainty is the situation where the possibility cannot be predicted. Risk and uncertainty are part and parcel of investment The possibility of risk is a loss for the investors. The methodology adopted includes analysis of the performance of banking sector considering Bank Nifty Index as benchmark. Risk and return of banking stocks as well as Data Envelopment analysis method is used for analysing the efficiency of banks. The entire study is based on secondary data collected from the NSE. The data collected was based on the monthly prices of the bank stocks listed in Bank Nifty. The reason for selecting monthly prices is to measure the shortterm variations in the banking stocks due to various other internal and external factors. The findings of the study revealed that if the investors are ready to take high risk for more returns, the investors are suggested to invest in stocks like Bank of India and Punjab National Bank in which risk and return are high. The investors who prefer low risk and return are suggested to invest in Axis Bank stock.

Market analysis of coupled biochar and carbon credit production from wildfire fuel reduction projects in the western USA

AbstractThe investment potential for biochar production from low‐value forest biomass in the western USA is over USD 20 billion at current carbon prices. This investment could generate approximately 70 million carbon credits annual – roughly the same number currently generated globally by all forestry and agricultural carbon projects. Biochar production that utilizes woody biomass specifically from wildfire fuel thinning projects as a feedstock can contribute financially to much‐needed fuel thinning projects. Each coupled biochar and carbon credit production system has positive returns in certain scenarios. Light upgrades to existing biopower facilities have the highest returns, with internal rates of return generally between 10–30%. Mobile biochar production often had the lowest returns. However, land managers can subsidize mobile biochar production up to USD 150–300 per tonne of biochar and still save money in comparison with pile‐burning low‐value biomass while also generating approximately one carbon credit for every two bone‐dry tonnes of low‐value biomass turned to biochar. The critical barrier to industry growth is the lack of transparent biomass supply chains that enable long‐term contracting for feedstock, production schedules, and investment. Moving forward, there are three potential pathways for the biochar industry to scale and utilize biomass from forest management and fuel thinning projects. Either (1) the carbon market will need to sustain high carbon prices, (2) a subsidy or other mechanism will need to decrease the cost of feedstock biomass, or (3) production will need to take advantage of economies of scale to bring down biochar prices while increasing production.

Implementing Approach-Bias Modification as Add-On to Varieties of Clinical Treatment for Alcohol Use Disorders: Results of a Multicenter RCT

Introduction: Abstinence rates after inpatient treatment for alcohol use disorder (AUD) are modest (1-year rate around 50%). One promising approach is to re-train the automatically activated action tendency to approach alcohol-related stimuli (alcohol-approach bias) in AUD patients, as add-on to regular treatment. As efficacy has been demonstrated in well-controlled randomized controlled trials, the important next step is to add alcohol-approach-bias modification (alcohol-ApBM) to varieties of existing treatments for AUD. Therefore, this prospective, multicenter implementation-RCT examined whether adding alcohol-ApBM to regular treatments (various abstinence-oriented treatments including both individual and group-based interventions) would significantly increase abstinence rates compared to receiving regular treatment only, in a variety of naturalistic settings with different therapeutic approaches. Methods: A total of 1,586 AUD inpatients from 9 German rehabilitation clinics were randomly assigned to receive either ApBM in addition to regular treatment or not. Training satisfaction of patients and therapists was measured after training. Success rates were determined at 3, 6, and 12 months post-treatment. Results: Return rates of the post-treatment assessments varied greatly between clinics, often being low (18–76%). Nevertheless, ApBM significantly increased success rates after 3 months. After 6 and 12 months, the differences were not significant. ApBM was evaluated mostly positively by patients and therapists. Discussion/Conclusion: ApBM was an effective add-on to regular treatment of AUD at 3 months follow-up, across a variety of AUD treatment settings. However, low return rates for the clinical outcomes reduced the effect size of ApBM considerably. The application of ApBM proved feasible in varying clinical settings, offering the opportunity to modify automatic processes and to promote abstinence.

Network centrality, information diffusion and asset pricing

This paper empirically investigates the asset pricing implications of trade network topology in the Australian equity market, emphasizing its role in economic shock propagation and information dissemination. We explore the influence of industries' network positions on the paradigm of risk and return. Empirical results demonstrate that industries located in the centre of the trade network, benefiting from diversified trade relations, yield lower returns without heightened exposure to systematic risk. Exploring the interplay between network centrality and information diffusion, we find that information transmission is slower among central firms due to attention constraints of investors and the complexity involved in analyzing them.

Anti-Pandemic stringency measures and performance of tourism and hospitality firms worldwide: what makes a firm resilient to a crisis?

ABSTRACT This study delves into the impact of COVID-19 pandemic-induced stringency measures on firm performance within the global tourism and hospitality sector, exploring the factors that shield firms from such measures. The results of a sample drawn from 41 countries reveal a negative association between stringency measures and firm performance. Notably, firms in countries with a stringency score at the 75th percentile are found to exhibit a 263% lower return on assets compared to their counterparts in countries with a stringency score at the 25th percentile. Moreover, larger and established firms, as well as those with high (low) sustainable growth (financial constraints) demonstrate a lower susceptibility to the adverse effects of stringency measures. These results underscore the critical need to customize government support schemes, ensuring they align with the vulnerability levels of businesses during abnormal operating conditions. Such customization will promote fairness and equity among businesses, recognizing their distinct challenges.

An Empirical Analysis of Tribal Investors’ Behaviour - A Study of Selected States in North East India

This study tries to understand the behaviour and perception of the tribal investors in the North Eastern India. This study tried to find out using several non- parametric test and factor analysis what are the investment avenues the population in the study responded to and the behaviour. From the study we understood the behaviour of the tribal investors of north east part of India in respect of selected states. The results of the Mann Whitney test in respect show that investment in respect of the Gold, Real Estate and Post office saving are significant across gender in the study. This indicates that these are more important in terms of investment in respect of decision of investment. In terms of significance for self-decision real estate, banking and post office saving are the clear winners and this is quite obvious given the demographic spread of age group and income level and the sector of employment. Earlier studies have shown that government employees at the higher age group are generally risk averse and tend to invest in stable low return assets. Post office savings show as the only significant investment avenue in term of annual income of the tribal investors.

COMPARATIVE ANALYSIS OF COSTS AND RETURNS ACROSS FARM SIZES FOR SUGARCANE PRODUCTION IN MANDYA DISTRICT, KARNATAKA

The study examines the cost and returns of sugarcane cultivation across various farm sizes. The study indicates that the total cost of cultivation tends to vary across different farm sizes, with marginal farms incurring the lowest cost and large farms incurring the highest. It also highlights cost variations between main and ratoon crops, emphasizing labor, material, and power costs. Larger farms incur higher production costs but yield greater net returns, with ratoon crops generally more profitable. ANOVA analysis underscores significant differences in costs and returns among farmer categories. Despite the main crops higher productivity, lower returns compared to ratoon crops contribute to the latters continuity. The paper concludes that the profitability of the ratoon crop serves as a key incentive for continuing sugarcane cultivation despite the higher costs associated with the main crop. KEYWORDS: Sugarcane, Cost, Returns, Ratoon and Main crop

Does the credibility of open market share repurchase matter?

Previous studies indicate that stock prices react positively to announcements of open market share repurchases (OMR). However, global evidence indicates that some firms announce OMR programs without repurchasing shares. Kracher and Johnson (1997) define such firms as guilty of poor credibility firms. This study investigates whether credibility measurements are associated with market responses using a sample of OMR announcements from 2001 to 2021. Benefitting from the complete information disclosure in Taiwan, an accurate completion rate and cost location variables are adopted to measure a firm's credibility. The results show that the proxy of credibility, i.e., the product of the completion rate and the cost location, positively affect market responses. In addition, a probit model is utilized to predict which firm-specific characteristics lead to high credibility. The findings reveal that firms with low market-to-book ratios, low return volatility, high insider ownership, good firm performance, low dividend yield, and are classified as electronics industry have a high probability of conveying credible signals to investors. Overall, the paper supports the existence of credibility effect and suggests that firms should value their credibility.

Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal

This study investigated the effect of media coverage on financial markets in response to COVID-19-related news. By collecting data from the United States Centers for Disease Control and Prevention, we study the effect of The Wall Street Journal's coverage and tone on stock markets. In particular, we attempted to measure media overstatements by comparing the number of articles and stress words with the number of COVID-19 cases. We obtained three main findings. First, investors discount macroeconomic news and objective measures of COVID-19. Second, excessive stress in the media tone leads to greater uncertainty and lower returns. Third, these results hold across sectors, although heterogeneity exists. Overall, long periods of high-stress sentiment and uncertainty affect investors more than single-day news.

A compact all-frequency absorptive dual-band bandpass filter with T-shaped transmission line absorption branches

Multi-band and all-band absorptive filters can greatly promote the miniaturization of radio frequency (RF) communication systems. However, the existing absorptive multi-band filters have problems such as large size, narrow passband, high insertion loss, and low RF signal absorption capacity. Herein, a new all-frequency absorptive dual-band bandpass filter (BPF) is proposed by combining an N-shaped microstrip coupler with T-shaped transmission line absorption branches. The N-shaped microstrip coupler can flexibly implement the dual-band bandpass filtering of RF radio frequency (RF) signals in a compact structure. The T-shaped transmission lines can effectively absorb the stopband signals reflected from the N-shaped coupler at full frequency. The theoretical and experimental results show that the 3-dB fractional bandwidths (FBWs) of the proposed BPF with a size of 0.41 λg × 0.20 λg are 60.5 % at 1.3 GHz and 13.3 % at 4.1 GHz, respectively, and the return losses in all frequency are greater than 10 dB, indicating that the filter has the characteristics of wide passband, small size, and all-frequency absorption of reflected bandstop signals. In short, the combination of N-shaped coupler and T-shaped transmission line provides a way to achieve an all-frequency absorptive dual-band BPF with a small size, wide passband and low return loss.

The change in salience and the cross-section of stock returns: Empirical evidence from China A-shares

This study explores the relationship between stocks' change in salience (CS) and the cross-section of stock returns. We find that the change in salience can negatively predict future stock returns. Investors, attracted by salient attributes of choices, overestimate prominent rising trends in stock historical return performance and extrapolate, leading stocks with prominent rising trends to be overpriced and earning lower subsequent returns. In terms of potential mechanisms, we find that costly arbitrage and lottery preference are two underlying mechanisms behind the mispricing of CS. The CS effect is more pronounced among stocks with greater costly arbitrage and greater lottery preference. Moreover, both institutional and individual investors are shown to generate distortions of expectations induced by salient thinking. Our findings are robust after considering common risk factors, shell contamination, short-term reversals, the prospect theory, and investor attention.

Oil, gold and international stock markets: Extreme spillovers, connectedness and its determinants

This study examines the lower and upper return spillovers and connectedness between important commodity (crude oil and gold) and main international stock markets using the quantile connectedness approach by Ando et al. (2018). The results show stronger return spillovers during bearish and bullish market conditions. Crude oil and gold are net receivers of return spillovers irrespective of quantiles. Furthermore, an intense spillover is observed during high stress periods including COVID-19 in March 2020, and global economic slowdown and the Brexit referendum of 2016, oil price crash in 2014–2016, Tapering Tantrum in 2013, and the subprime crisis of 2008. Moreover, the spillovers in lower quantiles are stronger than in upper quantiles. The volatility uncertainty index (VIX) has a negative impact on the connectedness index at low and median quantiles. Gold and economic policy uncertainty indexes have a positive impact on lower quantile spillovers. In contrast, oil uncertainty index has a negative impact on quantile spillovers. COVID-19 crisis has a positive impact on lower, medium, and upper spillovers.

Stress from attention: The relationship between climate change attention and crude oil markets

Investors' focus on specific topics could translate into actual trading behavior, subsequently influencing market prices. Within the crude oil market, the issue of climate change risk arising from carbon emissions has garnered considerable attention recently, as investors' search behavior regarding this topic may impact crude oil prices. Based on the search information provided by Google, this paper employs quantile and quantile-on-quantile regression (QQR) methods to examine the relationship between investors' attention to climate change risk and crude oil futures price returns. The results reveal the following: (1) Simultaneous opposite correlations are observed, with a significantly positive relationship between attention and returns during high returns and a significantly negative relationship during periods of low returns. The correlation between the two exhibits considerable variation across different market performances. (2) A significant negative correlation exists mainly between attention to physical and opportunity risk and returns, while positive correlations exist mainly between attention to regulatory risk and returns. (3) Higher levels of climate change attention intensify these effects, as evidenced by an increase in the absolute value of the regression coefficients. The findings of this study can serve as a reference for investment institutions and policymakers in constructing investment portfolios and managing the impact of climate risk.