Publicly-traded Companies Research Articles

Caregiver-Reported Quality in Hospices Owned by Private Equity Firms and Publicly Traded Companies

This study compares differences in caregiver-reported hospice quality across categories of ownership, including for-profit private equity firm (PEF)/publicly traded company (PTC)–owned and non-PEF/PTC–owned hospices as well as not-for-profit–owned hospices.

Effects of Environment, Social, and Governance (ESG) Disclosures on ESG Scores: Investigating the Role of Corporate Governance for Publicly Traded Turkish Companies

The world has experienced climate-related issues, which increase the importance of ESG disclosures and corporate governance (CG) of companies, which take place at the heart of economies. Therefore, improving ESG disclosures and CG practices becomes significant to combat climate change at the company level. Considering that Türkiye restructured ESG disclosures in 2022, this study investigates the role of CG on the nexus between ESG scores of publicly traded companies (PTC) and ESG reports. So, the study analyzes 102 PTC (full sample), 51 PTC in Borsa Istanbul Corporate Governance Index (in-sample), and the remaining 51 PTC (out-sample) using ESG disclosures of 2022 and applying novel super learner (SL) algorithm. Our results show that (i) SL has a higher prediction performance reaching ∼94.3%; (ii) the environment (governance) layer has the highest (lowest) total relative importance (contribution) to ESG scores in all samples; (iii) C8, S6, and E5 are the most important ESG principles in the full sample, in-sample, and out-sample, respectively; (iv) the contribution of each ESG principles to the total ESG scores varies by sample; (v) CG plays a smoothing role for the relative importance of each ESG principle, while the relative importance in the out-sample shows much higher volatility. Overall, the study reveals the non-linear contributions of ESG principles on ESG scores and suggests that PTC should prioritize highly important ESG principles, consider the moderating role of CG on the link between ESG scores and ESG disclosures, and use ESG disclosures as a strategic tool to develop ESG scores and disclosures.

Evaluating the Relationship Between Global Stock Markets and Real Estate Markets Before and After the Coronavirus Pandemic

The relationship between the stock market and the real estate market has been the focus of several studies in the past. The nature of this relationship continues to remain ambiguous, with results varying according to a country’s economic condition and the level of co-integration between the two markets. This paper reviews the variables that influence the behavior of the stock market and the property market in the United States and the UAE. It examines whether these markets appear to be interlinked in these countries. To make the research more relevant, we have also reviewed the relationship between these two markets and how they have been influenced by the Coronavirus pandemic. As per our findings, the key variables impacting this relationship include the wealth effect, the percentage of real estate assets owned by publicly-traded companies, the news, the number of mortgage-backed securities available in the market, and the amount of risk associated with these securities. Besides this, initial public offerings (IPOs) and market liquidity also play a vital role. Regarding the Coronavirus pandemic, the primary impacts of this health crisis appear to be limited to the short-term. The most significant effects include a rise in stock market volatility, a decline in buying and selling activity, and delays in real estate construction projects in response to government restrictions and new Coronavirus-related deaths. Keywords: Real estate, stock market, coronavirus pandemic, the impact of the stock market, property market, real estate prices, share prices, COVID-19 pandemic

Changes in Diagnoses and Site of Care for Patients Receiving Hospice Care From Agencies Acquired by Private Equity Firms and Publicly Traded Companies

Private equity firms and publicly traded companies have been acquiring US hospice agencies; an estimated 16% of US hospice agencies are owned by private equity (PE) firms or publicly traded companies (PTC). To examine the association of PE and PTC acquisitions of hospices with Medicare patients' site of care and clinical diagnoses. This cohort study of US hospice agencies used a novel national database of acquisitions merged with the Medicare Post-Acute Care and Hospice Public Use File for 2013 to 2020. Changes in sites of care and patient characteristics for hospice agencies acquired by PE or PTCs were compared with changes for patients in nonacquired for-profit hospice agencies. Private equity and publicly traded company acquisitions. This study used a difference-in-differences approach within an event-study framework to examine the association of PE and PTC acquisitions of hospice agencies with changes in patient diagnoses and sites of care. Dependent variables were annual hospice-level measures of the Hierarchical Condition Category (HCC) score and proportion of patients diagnosed with cancer or dementia. Sites of care included the proportion of patients receiving hospice care in their personal home, nursing home, or assisted living facility. A total of 158 hospice agencies acquired by PEs, 250 acquired by PTCs, and 1559 other for-profit hospice agencies were included. Preacquisition, hospice agencies that would later be acquired by PE or PTC served a mean (IQR) 30.1% (12.0%-44.0%) and 29.4% (13.0%-43.0%) of their patients in nursing homes respectively, a greater proportion compared with the 27.1% (8.0%-43.8%) served by for-profit hospices that were never acquired. Agencies acquired by PE between 2014 and 2019 saw a significant relative increase of 5.98% in dementia patients (1.38 percentage points; 95% CI, 0.35-2.40 percentage points; P = .008). In PTC-owned hospices, the proportion of patients receiving care at home increased by 5.26% (2.98 percentage points; 95% CI, 1.46-4.51 percentage points; P < .001), the proportion of dementia patients rose by 13.49% (3.11 percentage points; 95% CI, 2.14-4.09 percentage points; P < .001), and the HCC score decreased by 1.37% (-3.19 percentage points; 95% CI, -5.92 to -0.47 percentage points; P = .02). These findings suggest that PE and PTCs select patients and sites of care to maximize profits.

Machine learning in the boardroom: Gender diversity prediction using boosting and undersampling methods

This paper addresses the crucial issue of boardroom diversity and proposes a novel approach utilizing machine learning to predict gender diversity on the boards of Chinese publicly-traded companies from 2008 to 2017. The study employs tree-based boosting with under-sampling as the machine learning technique. Various tree-based boosting techniques are utilized, and the evaluation is based on accuracy, precision, recall, F1 scores, and ROC scores. The findings reveal that extreme Gradient Boosting (XGBoost) with undersampling outperforms other models in terms of predictive performance. Moreover, the paper extracts interpretable principles in the form of if-else statements from the model to enhance its interpretability. This approach contributes to achieving corporate governance goals by promoting board gender diversity using machine learning techniques.

Effect of country governance on firm performance

This study examines the effect of country-level governance quality, moderated by culture, on firm performance. The sample included data from 2,511 publicly-traded companies from nine countries from 2009 to 2018, totaling 15,981 firm-year observations. The data to estimate firm performance were collected from the Refinitiv database, while metrics for country governance and cultural dimensions were obtained from the World Bank and Hofstede Insights, respectively. Multiple linear regression models were used to analyze the relationship between country-level governance indicators and firm performance, including the moderating role of culture. The main results showed that governance indicators have a positive and statistically significant relationship with the performance of the analyzed firms. In most of the estimated models, culture has shown to have a positive moderating effect on the relationship between country governance and performance. This research provides evidence that the governance environment in which firms operate influences their performance, suggesting that managers’ knowledge about the specific organizational environment of regions or countries is vital in the corporate decision-making process.

Impact of Environmental, Social, and Governance (ESG) Factors on Stock Prices and Investment Performance

This study examines the relationship between Environmental, Social, and Governance (ESG) factors and stock prices as well as investment performance. ESG factors have become increasingly relevant in investment decisions as investors prioritize companies with sustainable practices. Using a sample of publicly-traded companies, this research analyzes the impact of ESG factors on stock prices and investment returns. The findings suggest that companies with strong ESG performance tend to have higher stock prices and better investment performance than those with weak ESG performance. The study also highlights the significance of the individual components of ESG, such as environmental policies and corporate governance practices, on stock prices and investment returns. Overall, this research provides valuable insights for investors seeking to incorporate ESG factors into their investment decision-making processes.

Environmental, social and governance e o ciclo de vida das firmas: evidências no mercado brasileiro

ABSTRACT The study analyzed the association between environmental, social and governance (ESG) and the life cycle stages of Brazilian publicly-traded companies listed on the B3 S.A. - Brasil, Bolsa, Balcão (B3) from 2010 to 2020. It explores a theoretical gap regarding the relationship between the life cycle stages of companies and ESG initiatives in Brazil, an emerging country. The findings are relevant for understanding how the life cycle stages act as signals of the level of ESG actions of companies and how the market perceives these actions and their ability to create value. The research provides evidence that the fundamentals of the firm life cycle theory function as indicators for several organizational perspectives, including ESG practices. The sample consisted of 109 companies whose data were collected from Thomson Reuters® and analyzed using multiple regression. The model proposed by Dickinson (2011) was used to analyze the life cycle stages. It should be highlighted that the data were also analyzed using the fixed effect as an estimation of the econometric model, but there was a loss of statistical significance in the relationship found, possibly due to the sample selection performed in the unbalanced panel. Based on the sample analyzed and the econometric models used, the results indicate that companies in the birth and turbulence stages have lower levels of ESG practices, particularly in the environmental and social pillars, compared to companies in the maturity stage. The findings also show that ESG initiatives in the Brazilian capital market are associated with measures of companies’ profitability, liquidity, indebtedness, market value, and number of analysts. The research contributes to the analysis of the relationship between the adoption of ESG practices and the life cycle stages of companies in an emerging market, with implications for stakeholders regarding the targeting of resources to sustainable actions.

Relative Valuation of Private Held Companies: Valuation Multiples in the Czech Brewing Industry

Abstract This article focuses on the topic of the relative valuation from the perspective of non-publicly traded companies and the determination of industry multiples allowing the subsequent application of this approach to specific industries. I chose the Czech brewing industry as the target industry, represented by the 50 most important entities (covering more than 99% of the industry’s turnover). Due to the fact that no market value data are available for this type of company, I first used an income valuation approach – the discounted cash flow (DCF) method to assess the market value of each company in the sample. I then quantified valuation multiples of P/E, EV/EBIT, EV/EBITDA, P/S, EV/S, P/BV, and EV/IC for each company, from which I determined industry statistics. I verified their suitability for use in the relative valuation approach and compared them with the results of existing studies on the most commonly used valuation approaches in the Czech Republic. Furthermore, I compared my own calculations of industry multiples for non-publicly traded companies with available data on industry multiples of publicly-traded companies in the brewing industry across Europe. The results of the comparison show that these multiples are on average lower for non-publicly traded companies than for listed companies.

Is College Education Less Necessary with AI? Evidence from Firm-Level Labor Structure Changes

ABSTRACT As a general-purpose technology, artificial intelligence (AI) is expected to transform almost all industries and aspects of our society. Thus, it is important to understand the potential changes within the firms related to how AI applications change their labor force. Using a panel dataset with over 1,300 publicly-traded companies in China from 2007 to 2018, we examine the relationship between AI applications and firm labor structure with workers with or without formal college education. The study indicates that AI applications were positively associated with the overall employment as well as the employment of nonacademically- trained workers with no college degrees at the firm level. These associations were more significant in the service sector than in the manufacturing sector. Further causal analysis shows increasing AI applications have a positive effect on a firm’s employment of nonacademically-trained workers and its overall employment but a negative effect on academically-trained workers. We attribute the findings to the technology deskilling effect of AI. The findings suggest that, in response to the potential labor force transformation with increasing AI applications, information-systems research needs to focus on structural changes of labor forces and the implications for preparing human employees to work with AI side by side.

Two-class structure of Forbes Global 2000 firms sales per employee similar to countries income distributions including some COVID-19 pandemic effects

Sales per capita (per number of employees) of the two thousand Forbes Magazine top publicly-traded companies (G-2000) for years 2015, 2020 and 2021 are statistically analyzed. Employing an econophysical model, the sales distributions per capita for the three years exhibit a two-class structure: a Pareto power law in the higher part and exponential in the lower part resembling a Boltzmann-Gibbs distribution. This distribution is consistent with income distributions around the world as if a fraction of a firms' wealth goes to its employees in the form of wages and salaries. We highlight some changes in sales between 2020 and 2021 on selected industries that had the biggest negative and positive impacts partially due to the COVID-19 pandemic.

Executive compensation in Europe: realized gains from stock-based pay

Shareholder value ideology and the rise of executive pay are widely acknowledged but only partly explored aspects of financialization. This paper adds to the empirical evidence on the extent to which stock-based pay incentivizes and rewards corporate executives, demonstrating that CEO pay, and hence pay inequality, is substantially under-stated in Europe. It shows that the actual realized gains (that is, take-home compensation) from stock-based pay of CEOs in the largest European companies are underestimated by the use of ‘fair value’ measures, in the case of some countries dramatically. We base our work on a sample of 301 large, publicly-traded companies listed in the S&P Europe 350 index from 11 EU countries. We document that on average half of the total compensation of the European CEOs in our sample is stock-based, measured by actual realized gains, with differences among countries. Based on our work, we argue that realized gains measures of CEO pay should be the standard for assessing the incentives and rewards of senior corporate executives in Europe. We consider this to be a preliminary step to question shareholder value-based corporate strategies in Europe.

Sales per employee of the world’s top combined publicly traded and state-owned companies

Sales per capita (per number of employees) of the 2000 Forbes Magazine top publicly-traded companies (G-2000) and some of the world’s leading state-owned enterprises (SOE) are statistically analyzed. This hybrid or combined cumulative probability sales distribution per capita exhibits a two-class structure: a Pareto power law in the higher part and exponential in the lower part resembling a Boltzmann–Gibbs distribution, where money is conserved in economic trade like energy is conserved in elastic collisions. This global per capita sales two-class distribution is qualitatively similar to income and wealth distributions in many countries around the world.

Assessing the impact of investors' expectations on the capitalization of publicly-traded corporations on the Russia stock market

Subject. This article investigates the impact of investors' expectations on the capitalization of publicly-traded corporations of Russia stock market. Objectives. The purpose is to assess the impact of investors' expectations on the capitalization of corporations that are publicly traded on the Russian stock market, to expand tools for assessing the expected return of investors. Methods. The study employs models for assessing the profitability of financial assets, namely, Capital Asset Pricing Model (CAPM) and modified CAPM, as well as general scientific and statistical methods for analyzing economic processes. Results. Using the CAPM, I determined expected profitability of twenty Russian publicly-traded companies, operating in the electric energy, oil and gas, and metallurgical sectors of the economy, and assessed the model’s effectiveness. Based on the tools of correlation and regression analysis, I estimated the impact of expected return of investors on changes in company capitalization. The paper reveals the relationship between investors' expectations and changes in the capitalization of Russian corporations. Conclusions. The modified model showed higher forecast efficiency compared to the classical model. There is a strong correlation between expectations of investors, determined under the modified model, and changes in Russian corporations’ capitalization. This enables the company management to influence the market value of the enterprise. The findings may be useful for investors, to enhance the forecast accuracy and make appropriate investment decisions, and for corporate management, to assess the value of company's equity capital, forecast the movement of stock prices, and influence the company's capitalization through the proposed model.

News as sources of jumps in stock returns: Evidence from 21 million news articles for 9000 companies

Material news events can be potentially important sources of jumps in stock returns. We collect 21 million news articles associated with more than 9000 publicly-traded companies and use textual analyses to derive measures to summarize the news. We find that stock return jumps (including time-variation in jump-size distributions and jump intensity) are significantly related to news flow frequency and content and those effects increase substantially over the last few decades. The sensitivity of jump probability to news is stronger for firms with higher media visibility, analyst coverage, and institutional ownership. This sensitivity also varies across different news categories.

Value Distribution to Stakeholders: A Study on Power and Strategic Importance in TSX IPOs

Stakeholder theory has developed over the past few decades and has established an increasing presence in business studies. In this context, the concepts of stakeholders' power and strategic importance have been studied in the literature, however, some aspects remain unclear, such as the relationship between these concepts and the value distributed to stakeholders by companies. This research seeks to provide theoretical clarification based on empirical evidence about the distribution of value to stakeholders. Our purpose is to verify the association between the power and the strategic importance of stakeholders and the distribution of value to them by publicly-traded companies on the Toronto Stock Exchange (TSX). In order to obtain the information relevant to the treatment given by companies to their stakeholders, data collection took place in the prospectuses presented by companies for the TSX IPO process in the period from 2008 to 2019. 104 prospects were studied in which the data collection was done through content analysis with the aid of the Nvivo 12 software and the data analysis was done using ordinary least squares (OLS) regression to test our hypotheses. The results observed reveal that not only is power and strategic importance relevant to the distribution of value to Stakeholders but also that stakeholder 'strategic importance has greater influence when compared to its Power.

The role of CEO emotional stability and team heterogeneity in shaping the top management team affective tone and firm performance relationship

In this paper, we aim to bridge the micro-macro divide by addressing continued calls from strategic leadership and affect researchers to examine the black box to consider how CEO characteristics relate to top management team (TMT) affective experiences, and, in turn firm outcomes. We further consider the role of one key contextual factor in this relationship: TMT heterogeneity. We predict that CEO personality, specifically, emotional stability, is positively associated with TMT affective tone. Moreover, we posit that the relationship between TMT affective tone and firm performance depends on TMT task-related heterogeneity, such that positive affective tone benefits firm performance in heterogeneous TMTs, whereas negative affective tone benefits firm performance in homogeneous TMTs. Using a novel methodology that measures key psychological aspects of the CEO and TMT, we examined 50 TMTs from publicly-traded companies to test our predictions. Our findings offer theoretical contributions to the strategic leadership, affect and diversity literatures as well as managerial applications for CEO selection and management and managing diversity in upper echelons.

Corporate cash and governance: A global look into publicly-traded companies' aggregate cash ratios

I conduct international panel-data regressions to investigate the determinants of cash holdings by publicly-traded firms for 20 countries over the period 2007–2017. The precautionary, transaction-costs, and agency motives explained ratios of the firms' aggregate cash to their total assets. On the last motive, higher cash ratios were associated with managers with worse ethical behavior, lower accountability, weaker investor protection, harsher auditing and reporting standards, and greater potential to face holdup problems by lending banks. The agency motive had a greater marginal impact than the precautionary and transaction-costs motives while having a limited explanatory power over total variation in the cash ratios.

The impact of toxic chemical releases and their management on financial performance

This paper examines the extent to which environmental performance affects firm profitability, where environmental performance is measured by toxic chemical releases per sales dollar and toxic chemical management (treat, recycle, or recovery) per sales dollar. Conclusions are drawn based on a sample of U.S.-based publicly-traded companies that reported to the Environmental Protection Agency's Toxics Release Inventory (TRI) program between 2001 and 2017. The results show that publicly-traded companies that reduce emissions see an increase in their Tobin's q. In addition, the effects of reducing emissions, treating toxic chemicals to minimize their environmental impact, or combusting toxic chemicals for energy, are more significant for companies that consistently fall under the mandatory reporting requirements of the TRI program. However, recycling toxic chemicals is associated with negative financial consequences for these companies.

Sticky Cost Behavior: Evidence from BRICS+T Countries

The aim of this study is to determine the sticky cost behavior of publicly-traded companies in Brazil, Russia, India, China, South Africa and Turkey (BRICS+T) that are classified as developing economies during the period 2010-2019. In addition to the purpose, the firm characteristics that play a role in the sticky cost behavior of firms and the effect of the Gross Domestic Product (GDP), which is a macroeconomic indicator, has been investigated. The study revealed that the firms in BRICS+T exhibit a sticky cost behavior. Furthermore, it also suggested that inventory intensity, which is one of the firm characteristics, does not affect cost stickiness and that asset, employee and property, plant and equipment intensity raise the level of cost stickiness while debt intensity declines the level of cost stickiness. Last but not least, it was found out that GDP, which is a macroeconomic indicator, raises the sticky cost level when it tends to rise.