Market Value Creation Research Articles

Analysis of payment methods in merger and acquisition deals within the United Kingdom

Purpose This study aims to examine the effects of payment methods used in mergers and acquisitions (M&A) conducted by UK companies spanning the period from 2007 to 2019. Design/methodology/approach The study used the estimated expected returns method to identify abnormal returns during the deal announcement period, applying event study analysis with both univariate and multivariate regression models to detect cumulative abnormal returns around the announcement timeframe. Findings The results show a short-term positive return increase for acquiring firms, controlling for deal-specific characteristics like target firm location and payment methods. The authors observed a preference for cash financing across domestic and cross-border transactions. Multivariate analysis revealed insignificance between payment methods and deal characteristics like cross-border acquisitions and diversification. Research limitations/implications The study’s focus on publicly traded firms in the UK and the absence of a comparative analysis across different regions and markets limits the sample size and may impact the generalizability of findings. Practical implications The study proposes three practical implications. Firstly, firms should tailor payment methods to each transaction, aligning with strategic goals to optimize value and mitigate risks. Secondly, decision-makers must prioritize comprehensive due diligence and strategic alignment throughout M&A processes to enhance success and maximize synergies. Finally, analysing broader strategic contexts and regulatory landscapes when structuring transactions enables goal attainment, such as market expansion or value creation. Social implications The study’s findings can promote transparency and accountability among corporate decision-makers in M&A transactions. Stakeholders can advocate for transparent decision-making processes, enhancing trust in corporate governance. Originality/value This study provides valuable insights into the impact of payment methods on shareholder value in M&A transactions involving UK companies, informing strategic decision-making and contributing to the understanding of corporate finance dynamics.

ANALYSIS OF THE IMPACT OF DIGITALIZATION ON THE DEVELOPMENT OF OPPORTUNITIES FOR SMALL AND MEDIUM-SIZED ENTERPRISES

The article analyzes how the use of information and communication technologies and digital marketing tools contribute to increasing competitiveness, optimizing business processes, expanding sales markets, and improving customer relations. This article offers a comprehensive examination of the intricate dynamics between innovation, entrepreneurship, and economic growth, drawing from an extensive review of empirical studies, theoretical frameworks, and policy implications. Through a meticulous analysis of the symbiotic relationship between innovation and entrepreneurship, it elucidates their multifaceted contributions to driving sustained economic prosperity. By delving into the nuanced mechanisms and contextual factors that shape this relationship, the article provides insights for policymakers, researchers, and practitioners seeking to foster innovation-led growth in today's complex global economy. In the context of contemporary economic development, innovation and entrepreneurship have emerged as central pillars driving productivity growth, technological progress, and market dynamism. This paper embarks on a journey to unravel the complex interplay between these two phenomena and how their synergistic relationship shapes the trajectory of economic growth. By examining the underlying mechanisms, empirical evidence, and policy implications, we aim to shed light on the transformative potential of innovation and entrepreneurship in fostering sustainable development and competitiveness. Innovation and entrepreneurship are essential engines of economic growth. Innovation is characterized by the creation and adoption of novel ideas, technologies, and business models, and is a catalyst for entrepreneurial activity by providing opportunities for market differentiation and value creation

Market Value Creation Based on Lifestyle and Social Class in Consumer Behaviour in Traditional Markets in Bali

Market Value Creation Based on Lifestyle and Social Class in Consumer Behaviour in Traditional Markets in Bali

Digital Platforms as a Fertile Ground for the Economic Sustainability of Startups: Assaying Scenarios, Actions, Plans, and Players

This study examines the transformative role of digital platforms in fostering sustainable entrepreneurship within emerging economies. We argue that platforms transcend mere communication channels, acting as catalysts for innovation and collaboration among startups, thereby driving economic, social, and environmental progress. Our framework emphasizes platform-enabled startups, navigating the unique challenges and opportunities presented by these dynamic markets. We adopt a dual lens, using a mixed-methods approach to analyze digital development trends through the prism of platforms in emerging economies. This reframes the discourse on technology-driven development, acknowledging the unidirectional flow of platform adoption from developed nations. The research emphasizes the need for prioritizing sustainability standards in these regions. Furthermore, we delve into the interplay between platforms and sustainable entrepreneurship with the following three objectives: (1) deciphering the drivers of platform–startup interaction for sustainability goals, (2) formulating policies to maximize platform benefits while mitigating risks, and (3) developing actionable strategies for stakeholders to cultivate a thriving ecosystem of sustainable platform-based ventures. The findings of this study reveal six key uncertainties that will shape the future trajectories of sustainable entrepreneurship within digital ecosystems, particularly in developing nations. These uncertainties encompass the following: environmental and social standards, ongoing education and development, mobile application development and utilization, global market access, and competitiveness and value creation. Several alternative future scenarios have been constructed based on these uncertainties, including advancements in digital technologies, dynamic market conditions and evolving consumer behaviors, a heightened emphasis on sustainability and corporate social responsibility, and a paradigm shift towards collaborative business models. A comprehensive framework of supportive policies and interventions has been proposed to facilitate the realization of these scenarios. Moreover, the analysis underscores the pivotal roles of digital platform providers and startups as key stakeholders in this evolving landscape.

The impact of climate transition risk on firms’ value – evidence from select Indian-listed companies

PurposeTransitioning to a low-carbon economy requires a positive response by society, including business organizations, towards the green concept and also requires the implementation of long-term green strategies. These requirements could impose various transition risks on the sustainable development of the firms; hence, the present study aims to examine the impact of climate transition risk on a firm’s financial performance and market value creation from the Indian perspective.Design/methodology/approachWe have considered the firm-level environmental risk score (ERS) to evaluate the sensitivity of a firm’s profitability (measured by ROA & ROE) and market value (measured by Tobin’s Q) towards the climate transition risk. The present study used multiple regression analysis to examine the impact of climate transition risk on the firm’s financial performance and market value creation, as evidenced by Nifty 50 companies.FindingsThe empirical results suggested that corporate climate transition risks have been positively associated with the firm’s financial performance indicators but negatively impacted the firm’s market value creation in the case of select Indian-listed firms. Hence, our results indicate that with the increase of firm-level climate transition risk, the firm’s financial performance increases but negatively affects the firm’s market value creation. The robustness tests have also confirmed the same results and supported our analysis.Originality/valueThe present paper contributes to the existing literature on climate risks and firms’ performance by providing insights about firms’ sensitivity towards climate transition risk from the Indian perspective.

Publisher Correction: Design, Branding and Marketing: Experience and Value Creation in Design, Branding, Marketing, Corporate Reputation and Identity

Publisher Correction: Design, Branding and Marketing: Experience and Value Creation in Design, Branding, Marketing, Corporate Reputation and Identity

The Moderating Role of Farming Systems in Market Participation and Value Creation for Medium and Smallholder Farmers in Rural Uganda

The study investigated the moderating role of farming systems in the association between market participation and value creation, targeting medium and smallholder farmers in Uganda, particularly in two districts in northern Uganda, Nwoya and Amuru. A sample size of 385 respondents consisting of medium and smallholder farmers involved in farm operations was calculated. The surveyed participants were selected using simple random sampling, while key informants were selected with a purposive sampling technique. Quantitative data obtained were coded and entered into SPSS version 25.0 statistical package computer software. Exploratory factor analysis was conducted to determine factor loading for the items examined. SPSS PROCESS MACRO v4.2 by Andrew F. Hayes was used to assess the moderation effect. There is a significant strong positive association of market participation and farming system with value creation (r = .861**, p < .01) and (r = .753**, p < .01), respectively. Secondly, market participation and the farming system significantly affect value creation (p<.05), and thirdly, the farming system moderated the effect of market participation on value creation. Policies and programs focusing on improving market access and market information dissemination should be implemented to benefit farmers significantly. Initiatives that promote sustainable and innovative agricultural practices should be encouraged to enhance value creation. A comprehensive approach that combines market participation and a farming system should be implemented to improve value creation. Enhancing farming systems by improving infrastructure, providing necessary support, and aligning farming practices with market demands can significantly impact the value of smallholder farmers' capabilities.

Design, Branding and Marketing: Experience and Value Creation in Design, Branding, Marketing, Corporate Reputation and Identity

Design, Branding and Marketing: Experience and Value Creation in Design, Branding, Marketing, Corporate Reputation and Identity

Presenting an Optimal Model for Explaining Capital Structure Management with a Market Value Creation Approach

Objective: The aim of this study is to present an optimal model for capital structure management with a market value creation approach. Methodology: This study utilized data from companies listed on the Tehran Stock Exchange over a six-year period (2017-2022). A regression model was first used to analyze the impact of various variables on capital structure. Subsequently, a decision tree algorithm and the Root Mean Square Error (RMSE) criterion were employed to provide an optimal model for capital structure management. The primary variables studied include economic value added (EVA), growth rate of shareholders' equity, earnings per share (EPS) growth, company size, financial leverage, and free cash flow. Findings: The results indicated that economic value added, growth rate of shareholders' equity, and earnings per share growth had the most substantial impact on market value added. In contrast, variables such as company size, book-to-market ratio, financial leverage, and free cash flow did not establish a significant relationship with market value added. Additionally, it was found that capital structure alone is not the primary driver of market value creation. Conclusion: This study demonstrates that in capital structure management, companies should focus on variables such as economic value added and earnings growth rather than solely on optimizing the debt-equity mix. These variables can significantly contribute to increasing market value and improving financial performance.

Research on the Influence Mechanism of Global Enterprises' Return Investment on Enterprise Performance

This study focuses on the mechanisms by which global firms' return investment affects performance, using resource dependence, opportunity cost and capital structure as the main theoretical perspectives. The resource dependence perspective suggests that return investment is a strategy for firms to acquire and protect resources, and to reduce their dependence on external markets by repatriating capital, technology, and brand resources. This process may be achieved through internal resource reallocation, organizational culture adjustment and strategic innovation, which profoundly affects firm performance. Opportunity cost theory emphasizes the choice and abandonment in the return investment decision, and firms need to weigh the substitutability and long-term competitiveness of different opportunities, revealing the mechanisms of strategic choices, cultural changes, and business model innovations that may be involved in return investment, thus affecting long-term performance. Capital structure theory provides a framework for understanding the internal and external impacts of return investment on firms. The choice of capital structure directly affects a firm's competitive position in the domestic market, financial flexibility, and long-term value creation. Repatriation investments may adjust the capital structure through debt and equity adjustments to fit the needs of the home market. The capital structure perspective provides insights into the mechanisms by which return investment affects firms' financing decisions, resource allocation efficiency, and financial flexibility. At the industry and market level, return investment may lead to intra-organizational changes and market-level effects. Capital repatriation may drive firms to engage in industry consolidation, reposition themselves competitively in the market, and restructure supply and value chains. Through these mechanisms, firms will reshape their competitive position in their home markets, generate market strategies and competitive advantages that differ from those in international markets, stimulate innovation and development in their home markets, and influence the evolution of the industry as a whole and changes in the market landscape.

Do pressure-sensitive institutional investors moderate CSR decisions towards value creation of Indian firms?

Purpose Research on the significance of corporate social responsibility (CSR) and value creation is nascent as compared to CSR and financial performance. The concept of value is also evolving because of changing business environments, globalization and the expanded idea of CSR. Nowadays, managers expect a more quick, pragmatic approach to satisfy valid stakeholder claims while simultaneously creating competitive advantage through reputation and investor value. The paper aims to examine the impact of CSR on the market and sustainable value creation through CSR expenditure in India and the moderating role of pressure-sensitive institutional investors (PSII). Design/methodology/approach The study used panel data regression methodology on a sample of 1,845 non-financial Indian firms from 2015 to 2021. Findings CSR creates market and sustainable value for non-financial Indian firms in line with stakeholder theory. The authors find a positive moderating role of governance represented by PSII on CSR and market value creation but not on sustainable value. Research limitations/implications The study is based on secondary data. CSR, despite being a regulatory obligation, provided long-term benefits that increased their sustainable growth rate. The results highlight the importance given by financial markets to CSR activities. Other types of institutional investors can also be examined in future research. CSR can be embedded in the core operations of the firm, which can help in fostering a culture of sustainability and responsible business practices that benefit firms and society as a whole. Tax incentives can be provided to firms investing in CSR. Practical implications CSR provides long-term benefits to the firm, which enhances the goodwill and integrity of the firm in the market. The results reveal that besides capital market investors, firms are subject to the scrutiny of consumers, communities and the government as expectations rise and information spreads faster, which can have repercussions. CSR helps in meeting such expectations and the perceived value of the firms. Managers and chief executive officers (CEOs) can pay attention to the type of institutional investors like PSII, which can be formed as a part of the firm’s CSR strategy. Social implications The positive impact of CSR on sustainable value expresses a long-term management orientation based on the improvement of stakeholder relations and the associated environmental impacts referring to cohesion and consensus, market opportunities and strengthened reputation and image. A sustainable company involves a conscious and continuing effort in the equilibrium between contrasting stakeholders’ expectations in an attempt to optimize value creation. Tax exemption can be provided for CSR activities. Originality/value The authors contribute to the scant literature on CSR and value creation, especially sustainable value, as most of the prior studies are not empirical on sustainable value in the Indian context. Managers and CEOs can pay attention to the types of institutional investors like PSII, which can be formed as a part of the firm’s strategy.

Value Creation Agility on Business Performance: An Empirical Study in Retail Fashion SMEs

This study examines the effect of digital marketing capability, relational capability, market knowledge capability and value creation agility on business performance. This study includes 312 owners or leaders of fashion retail small and medium enterprises in Central Java, Indonesia’s respondents. The data obtained were analysed by using the structural equation model. The results show that digital marketing capability, relational capability and market knowledge capability affect value creation agility and business performance. Furthermore, value creation agility affects business performance.

The role of entrepreneurial marketing & innovation capability in the performance of SMEs during covid-19 pandemic: Evidence of MSMEs in West Java

The Corona Virus, or COVID-19, has become one of the world’s issues, not only affecting health but also the Indonesian economy. One of the sectors that has been impacted was micro, small, and medium enterprises (MSMEs), whose performance has decreased. Entrepreneurial marketing and innovation capability have proven to increase the performance of MSMEs. However, it was still questioned whether entrepreneurial marketing and innovation capability would increase performance during COVID-19 pandemic. We collected data through an online survey to 290 MSMEs in West Java. Statistical analysis using SmartPLS reveal that entrepreneurial marketing (opportunity-driven, proactiveness, customer intensity, risk taking, resource leveraging, and value creation) and innovation capability (product innovation, serve innovation, process innovation, and business model innovation) have a significant effect on the performance of MSMEs (profitability, productivity, domestic market share, profit margin, competitiveness of the MSMEs, ability to maintain profit margin, and rate owners satisfaction with innovation level). Innovation capability has a greater influence, with a value of 0.465, compared to entrepreneurial marketing, with a value of 0.156, on the performance of MSMEs. Serve Innovation and Process Innovation have a significant impact on the dimensions of innovation capability that contribute to MSMEs’ performance. Several practical and theoretical implications for entrepreneurs designing marketing strategies are discussed based on the findings.

Perceived Value of Cultured Proteins as Novel Food in Canada: Generation Z Consumers in a Cross Generational Perspective

A national Canadian survey, completed in October 2021 of 10,019 Canadians, provides detailed insight into the Canadian novel food marketplace. Questions gauged consumer perception, and openness to cultured proteins (CPs) across a range of considerations, juxtaposing Generation Z (those born between 1997 and 2005) with the broader Canadian average. Survey respondents, to a degree, are open to CPs commercialization, while mixed about the environmental and ethical value. CPs companies, regulators, policy-makers and investors need to be aware of the multi-dimensional aspects of consumer decision-making, backing claims with validated science. Overall value will need to be matched with taste and nutritional claims, built on trust, in Canada, and globally. Whether it is the social ethics of Generation Z that will become the strongest proponents of CPs (or aspirational consumers regardless of their age), market value creation for the emergent sector can think of brand validation, and the public-private motivations in an adaptive science.

Understanding marketing strategy and value creation in the era of business competition

This study discusses marketing understanding and strategy as well as value creation in business in an era full of competition. To discuss this study, we get support from various publications about marketing and new strategies and products so that a company can compete and make it one of the companies that can survive in an era where competition is—obtaining data through a google school search on literature which is scientific evidence of how business marketing currently has a strategy and creates new value for businesses to compete. After the data is collected, we analyze it under a phenomenological approach, an attempt to get data evidence to answer phenomenal problems on the validity and reliability of findings. Where the business is very competitive, of course, the strategy has one concept and can create value in marketing by following various trends that will occur in the following year; likewise, the marketing strategy has components and planning that follow the characteristics of the business being carried out with of course having a budget that sufficient so that the business can compete as expected.

The market value effect of digital mergers and acquisitions: Evidence from China

Digital mergers and acquisitions (M&As) are increasingly popular around the world. This study examines the effect of digital M&As on the market value of Chinese listed enterprises by combining transaction-level and firm-level datasets from 2010 to 2019. The results of event studies show that the announcement of digital M&As leads to a rise in the short- and medium-term market value of acquiring enterprises, especially the short-term effect is statistically significant. Further multivariate analyses, which employ a difference-in-differences (DID) strategy and propensity score matching (PSM) techniques, provide causal evidence that digital M&As have a positive market value effect on acquirers, which is greater than that of non-digital M&As. This effect survives a vast array of robustness checks and displays some heterogeneity. Finally, we further verify two underlying channels (i.e., innovation and analyst coverage) through which digital M&As achieve market value creation.

Marketing, Value Creation and Values Dynamics: Gazing Out to Asia and Europe from Kitakyushu

If businesses were distinct from society and the planet, primarily serving the shareholder by maximizing profits, the focus of value creation would remain on prices and profitability. Yet, a review of research experiences with Asia, Europe and Kitakyushu in conjunction with the definition of marketing (one that is inclusive of customers, partners and broader society) develops perspectives on how values underly value creation. Such perspectives indicate that there are service models that extend beyond the profit motive, highlighting what I refer to as the dynamics of values on value creation. More precisely, much value creation literature has advanced understanding of the perception of the service receiver, while overlooking values of the service provider. The opinion on values dynamics developed in this article offers a novel conceptualization framework of the interplay of values on marketing’s targets (i.e., customers, partners and broader society). It also calls attention to the critical role of location specificity (in this case, Kitakyushu) for subjective sense-making of value creation actions as opposed to currently mainstream Western realist worldviews. Finally, this article highlights a role for de-emphasizing price and profit-centred thinking and embracing a broader humanist worldview in developing the scholarly sub-field of value creation in marketing.

The role of immersive technologies in value creation in marketing

Technological innovations and their potential as a tool for creating added value in marketing have long been underused, or insufficiently researched. This paper describes the use of immersive technologies and their potential for application in marketing. The use of immersive technologies in marketing has great potential and has attracted a lot of attention in the last few years. Incorporating the use of the concept of immersive technologies is increasingly becoming the subject of research in business and marketing. Initiating the use of immersive technologies in modern business is becoming the root of managing and creating a completely new customer experience. Reality can be shaped by using this type of technological innovation and as such immersive technologies with their role create an extraordinary position in communication with users. The use of immersive technologies, especially the use of Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR) has been used successfully in the entertainment sector for some time, but it becomes clear that there is a much greater need for immersive technologies in various fields and industries to recognize them as a huge potential for value creation in marketing.

Board of directors characteristics: How they are related to ESG rankings and value of Russian companies

Goal: the goal of this paper is to determine effects of board of directors characteristics on corporate value creation, taking into account ESG (Environmental, Social, Governance) principles. Methodology: the methodological tool applied in this study is an econometric analysis of panel data for 48 Russian non-financial public companies with ESG score provided by Thomson Reuters Eikon in the period from 2015 to 2020. Findings: we have found a non-linear impact of board size on ESG performance, and significant positive impact of board independence on both ESG performance and firm market value. We also find that higher board gender diversity leads to higher corporate ESG score and market value, while higher share of foreign directors does not affect significantly these indicators of performance of Russian companies. Board sustainability committee enhances both corporate ESG performance and market value, board strategy committee contributes to ESG score’s increase as well. Originality and contribution of the authors: our study contributes to the development of academic literature devoted to corporate governance effects on firm’s performance on understudied market, in the context of growing demand for corporate sustainability. Application of our findings will allow to formulate the best practices of corporate governance for market value creation of Russian companies basing on ESG principles.

The Research on the Product Humanization Model Based on the Evolution of Consumer Purchase Pat

Digital economy gives new connotation to business model. In the process of business model changing from vertical to horizontal, from exclusive to inclusive, and from individual to social, the central activity of enterprise marketing should be transferred to how to actively interact with consumers, so that consumers can more participate in the process of enterprise marketing value creation. This paper focuses on the model of consumers’ participation in marketing value creation. Firstly, this paper studies the basic model of consumer purchase path evolution, and proposes 5A +1D model based on the basic model. Then, based on the 5A+1D model, an important carrier for consumers to participate in the value creation of marketing is proposed: the product humanization model. Secondly, the paper analyzes the ideal migration mode of consumer purchase path under humanistic products: “W” model, which finally reaches the balance at both ends of 5A+1D model. Under the ecological background of open innovation, this paper extends the chain of consumers’ purchase path and realizes the co-creation of consumers and enterprises’ value, and designs a human-oriented product model based on the chain of consumers’ extended purchase path. The W model achieves the balance between the beginning and the end of the consumer purchase path model, which provides a theoretical basis for the intervention points of enterprises on the overall consumers’ purchase path.