Stock Market Value Research Articles

Effects of supply chain quality event announcements on stock market reaction: an empirical study from China

PurposeThis study aims to explore the impact of supply chain quality event (SCQE) announcements on enterprises’ stock market value.Design/methodology/approachThis study adopts the event study approach and analyzes the changes in shareholder value of companies listed in China based on data from 118 SCQE announcements. In the event study, the market, market-adjusted and Carhart four-factor models are used to estimate abnormal stock market returns, and a cross-sectional regression model is performed to examine the effects of SCQE announcements on enterprises’ stock market value.FindingsSCQE announcements have a negative impact on shareholder value. From the perspective of the supply chain network structure, the market reacts more negatively to SCQE announcements issued by the enterprises with higher supply chain concentration. From the perspective of companies’ characteristics, announcements that do not reflect the establishment of supply chain quality cooperation have a more negative effect on stock market value, which indicates that the supply chain network structure and firm-level characteristic can moderate the market reaction.Practical implicationsThe findings demonstrate a quantitative evaluation of how SCQE announcements affect the stock market value of listed companies and provide guidance for managers to enhance the value of SCQE announcements.Originality/valueThis study fills the research gap on the impact of SCQE announcements on stock market value by using secondary data and first explores the relationship between SCQE announcements and stock market value from the perspective of supply chain network. Furthermore, this study contributes to the literature on SCQE using an empirical study in China.

Do US top executives benefit from market concentration?

Abstract The income share of the top 1% of earners in the USA increased to 20% in 2014. The increase in income inequalities is contemporaneous with the rising market concentration across industries. This article shows that both developments are linked: top executives in more concentrated markets receive more pay than those in less concentrated markets. Superstars—the best-paid and most experienced chief executive officers—are paid significantly more than other executives in concentrated markets. Investors also receive higher returns in more concentrated markets, while the average worker’s wage does not increase. The link between market concentration and top executive pay is higher in information-technology and R&D-intensive industries. While larger firms pay their executives more, they pay relatively less (more) than smaller firms if their market is more (less) concentrated. We do not find effects of the governance quality and trends in firm stock market valuation on the executive pay premium from concentration.

Macroeconomic determinants of stock market volatility: Evidence from post socialist countries

This paper aims to estimate macroeconomic determinants of stock market volatility (SMV) for post-socialist countries using unbalanced panel data from 1995 to 2020. We evaluated the impacts of the stock market and macroeconomic determinants on SMV using the Feasible Generalized Least Squares (FGLS) model based on the data of selected eleven post-socialist countries in terms of two consecutive years. The findings reveal that economic freedom has a strong and good impact at any time; however, although the previous year's turnover ratio (TOR) had a positive impact, it has an unfavorable impact on SMV in the current year. Furthermore, the year's inflation rate, level of corruption, economic growth rate, and stock market value have all shown a negative impact. The study's findings serve as a useful reference for stock market practitioners and policymakers in these nations in making decisions.

Corporate investment and stock market valuation

AbstractWe study the driving forces behind the positive association observed between corporate investment and stock market valuation, and how they interact with managerial equity incentives and informativeness of investment. We build a dynamic model where managers use investment choices to influence investors' opinions about firms' future prospects and increase the market valuation. The incentives to manipulate the valuation processes increase with managerial equity incentives and informativeness of investment. Our empirical findings support the model's predictions that the tendency of using investment to boost market valuation is stronger when managerial stock ownership is high or when earnings quality is low (i.e., there is strong reliance on investment for information).

Long-horizon stock valuation and return forecasts based on demographic projections

We incorporate low-frequency information from demographic variables into a simple predictive model to forecast stock valuations and returns using demographic projections. The demographics appear to be an important determinant of stock valuations, such as the dividend–price ratio. The availability of long-term demographic projections allows us to provide (very) long-horizon forecasts of stock market valuations and returns. We also exploit the strong contemporaneous correlation between returns and valuations to improve return forecasts — something which is not possible in a predictive regression with only lagged predictors. Extensive pseudo out-of-sample forecast comparisons and tests demonstrate the predictive value that an accurate demographic projection can deliver. Although the availability of historical Census Bureau projections is limited, we demonstrate that they could have been employed in real time to improve true long-horizon stock return prediction. We show how the model can be used to adjust predictions under alternative demographic assumptions, incorporating, for example, the demographic impact of COVID-19 or recent changes to immigration policy. • Demographic ratios help predict valuation ratios, such as the dividend–price ratio. • Models including future demographic projections can outperform a model containing only current demographic information. • Traditional predictive regression can be augmented to include predicted values of demographic ratios. • Demographic predictions improve both pseudo and true out-of-sample stock return prediction at the five-year horizon.

OPERATIONAL RISKS AND FINANCIAL PERFORMANCE – THE CONTEXT OF THE JORDANIAN BANKING ENVIRONMENT

The 2008 financial crisis and the eruption of the COVID-19 pandemic have forced banks in Jordan to change their operation pattern. Thus, the main purpose of this study is to examine the impact of operations risk measured by the capital that commercial banks must hold to cover operational risk exposure on listed Jordanian commercial banks performance, represented in two dependent variables: earning per share (EPS) and stock market value (MV). The study used a panel data methodology constructed from the financial statements of all 13 commercial banks listed at Amman Stock Exchange (ASE) for the period 2006-2019. Based on regression analysis, the results explored a significant positive impact on EPS and MV as a proxy of the financial performance. Also, the results, indicated that operational risks, have more explanation power on EPS than on MV. These results contributed to the current literature by providing a roper understanding of the impact of operational risk on financial performance in emerging markets, which could draw some recommendations to banks’ management toward improving the analysis of operational risk.

The impact of governmental COVID‐19 measures on manufacturers' stock market valuations: The role of labor intensity and operational slack

This study investigates the impact of the Chinese government's Level I emergency response policy on manufacturers' stock market values. We empirically examine the roles of human resource dependence (labor intensity) and operational slack within the context of supply chain resilience. Through an event study of 1357 Chinese manufacturing companies, we find that the government's emergency response policy triggered statistically significant positive abnormal returns for manufacturers. However, we also find that there exists a negative impact on abnormal returns for manufacturers that are labor‐intensive, giving rise to arguments based in resource dependence theory. In addition, the results indicate the positive role played by operational slack (e.g., financial and inventory slack) in helping manufacturers maintain operations and business continuity, effectively mitigating risks and adding to the manufacturers' resilience. With these findings, we contribute to operations and supply chain management by calling attention to the importance of human resource redundancy while at the same time identifying financial slack and inventory as supply chain resilience strategies that were able to mitigate pandemic‐related risks.

Determinants and Value Relevance of Voluntary Assurance of Sustainability Reports in a Mandatory Reporting Context: Evidence from Europe

This paper investigates the determinants of sustainability report (SR) assurance and whether this assurance is value relevant within the context of the European Union (EU), where, under the Non-Financial Reporting Directive (NFRD), sustainability reporting is mandatory for large public interest entities (PIE) as of fiscal year 2017. Using a sample of 1832 firm-year observations from 660 European listed companies over the period 2017–2020, the results of a logistic regression analysis indicate that firm size, environmental, social and governance (ESG) performance and industry affiliation are important drivers of the demand for SR assurance. The value relevance regressions suggest that SR assurance is positively associated with the stock market value. The study contributes to the existing knowledge on SR assurance by documenting its determinants and value relevance in a context where sustainability reporting is mandatory and that is predominantly stakeholder-oriented. The results may be of interest to companies that consider to adopt SR assurance in such a context and to the European Commission (EC), which has included a mandatory SR assurance requirement in the proposed Corporate Sustainability Reporting Directive (CSRD), the successor to the NFRD.

Endogenizing Discretion in Disclosures

A firm’s publicly available information reflects ex ante committed information releases and ex post discretionary disclosures. In a setting wherein a firm’s CEO is concerned with stock market valuation and confrontations with the employee union, this paper endogenizes when the CEO retains ex post disclosure discretion and when the CEO curtails discretion, opting instead to ex ante commit to not gathering information or publicly disclosing information. The underlying economic forces entail a trade-off between the time-inconsistency problem (the CEO’s ex post preferences can diverge from the CEO’s ex ante goals) and how silence (absence of information) under the ex ante and ex post paths is valued differentially by the union. In effect, silence under different systems “speaks” differently, and this influences both the labor union’s incentives to engage in bargaining with the firm and the stock market’s pricing of the firm’s equity.This paper was accepted by Ranjani Krishnan, accounting.

Innovation, Institutional Development, and Insider Trading

A positive stock market valuation of a firm’s innovative assets grants the firm credibility as an innovator, facilitates the financing of future R&D, and is, therefore, an important step towards a firm’s ability to create and sustain a competitive advantage. Using a dataset of publicly listed firms in China, we show that in weak institutional environments, characterized by weak property rights protection, insufficient law enforcement, and inefficient information disclosure and capital allocation, innovative assets face a lower market valuation. We, further, show that insider trading acts as a signal for the value of innovative assets. Insider trading mitigates the stronger information asymmetries in lesser developed institutional contexts and increases the stock market valuation of innovative assets.

US Immigration Politics, Sanctions Threats and Private Prison Corporations’ Stock Market Values

Abstract Although politics play pivotal roles in the emergence and operation of private prison corporations (PPCs), less is known about the effects of politics on PPCs’ financial performance. This paper examines the economic consequences of US immigration politics on PPCs using stock market data. Results show that PPCs benefit from restrictive immigration politics through increased stock values and certainty of future profitability. In contrast, their stock values are more likely to fall when the federal government announces sanctions threats on PPCs. These immigration politics only shape PPCs because of their unique business partnership with governments, but do not have meaningful impacts on private security companies that hold weak commercial interests in immigration politics. Finally, this study offers policy implications by revealing consequential effects of national-level politics on PPCs’ financial performance, suggesting future directions for federal roles in regulating PPCs.

Does the order of claims to assets on the balance sheet reflect equity risk?

PurposeThis paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their riskiness.Design/methodology/approachThis paper measures a firm’s riskiness with idiosyncratic risk and employs the first-difference design to test the relation between idiosyncratic risk and the order of current liabilities, noncurrent liabilities and preferred stock, respectively. Further, the paper tests whether operating liabilities are viewed as riskier than financial liabilities. Finally, the authors partition their sample based on the degree of financial distress and investigate whether the results differ between the two subsamples.FindingsThe paper finds that current liabilities are viewed as riskier than noncurrent liabilities and preferred stock is viewed as less risky than current and noncurrent liabilities, consistent with the ordering on the balance sheet. Further, the paper finds that operating liabilities are viewed as riskier than financial liabilities. Finally, the authors find that total liabilities and preferred stock (redeemable and convertible classes) are viewed as riskier for distressed firms than for nondistressed firms.Originality/valueThe authors thoroughly investigate the riskiness of several classes of claims and document that the classification of liabilities and preferred stock classes is relevant to common stockholders for assessing their associated risk.

Effect Analysis of Carbon Information on Enterprise Value Based on Big Data

An effect analysis approach of carbon information on enterprise value based on big data is proposed. This study first systematically expounds on the sources of research data and data collection methods and then comprehensively analyzes corporate carbon information disclosure status and characteristics. It also conducts an empirical study on the short-term impact of carbon information disclosure on corporate value creation and draws the following conclusions. Industry classification has an important impact on corporate carbon information disclosure in terms of the status and characteristics of corporate carbon information disclosure. Except for the financial and insurance industry, the average amount of carbon information disclosure in susceptible sectors such as the extractive industry and construction industry is relatively high. In terms of carbon information disclosure content, the carbon information disclosed by enterprises is mainly related to low-carbon technology and low-carbon product plans. Through empirical analysis of the impact of carbon information disclosure on short-term stock market performance and investor returns, it is found that the trading volume and value of stocks in the 5 trading days after the information event were higher than those in the previous 5 trading days. Still, the increase in the overall stock market value was not significant. This shows that the occurrence of carbon information disclosure events can improve the liquidity and trading activity of the stock market, trigger the stock market’s market response to carbon information disclosure, and enable investors to obtain more abnormal returns among short-term investors. It has a certain impact on short-term enterprise value creation.

Does Growth Sustainability Affect Stock Value? An Empirical Investigation in Indian Banking Sector

To satisfy the investor’s desire to quick returns, companies had to often trade-off their sustainability and long term growth. The growth rate of a company has the quickest impact on true value of a stock. The paper tried to study how the growth sustainability (using ROE and retention ratio) affects the intrinsic value of a stock and its deviation from the market value. The paper is divided into two segments. The first part deals with financial relationship between Discounted Cash Flow, P/E Multiplier and Market Value. In the second part the paper uses econometric tools to study the short run association between the variables. The comprehensive empirical work aims at identifying the over-pricing or the under-pricing of the stocks at different phases of growth rates. Econometric tools like ADF, VAR, Grangers Causality and Dynamic OLS is used. Findings of the present work show the divergence between this estimated true and market value of stocks is not significant (at 5% significance level) for the banks that follow steady growth sustainability. Thus the paper concludes at testing the impact of growth sustainability on correct market mechanism of the stock pricing.

UKURAN PERUSAHAAN TERHADAP NILAI PERUSAHAAN DENGAN STRUKTUR MODAL SEBAGAI VARIABEL INTERVENING PADA PERUSAHAAN MAKANAN DAN MINUMAN YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2018-2020

Financial management is all company activities related to efforts to obtain the necessary funding with minimal costs and the most favorable terms, as well as efforts to use these funds as efficiently as possible. assets, log size, stock market value, etc. The value of the company is the selling price of the goods when the goods are sold. The capital structure is an illustration of the form of the company's financial proportions, namely between owned capital which is sourced from long-term liabilities and shareholder's equity which is a source of financing for a company. To find out the size of the company on the capital structure with firm value as an intervening variable in food and beverage companies listed on the Indonesia Stock Exchange for the 2018-2020 period. In this study, the sample was taken using purposive sampling. Data analysis and hypothesis testing in this study used the Structural Equation Model - Partial Least Square (PLS-SEM).
 Firm size has a significant positive effect on capital structure. Firm size has a significant positive effect on firm value. Capital structure has a significant negative effect on firm value. Accepted Firm size has a significant negative effect on firm value through capital structure.

Features of the organization of the joint-stock entrepreneurship

The article deals with the peculiarities of organizational forms of entrepreneurship: joint-stock companies. On the basis of the study of basic laws and legislative acts on joint-stock company the basic rules on the opening and organization of joint-stock form of enterprise are systematized. The prerequisites for creation and effective functioning of joint stock companies are revealed. The issues of formation of the authorized capital, the main types, features and differences of shares, as well as their role in the activities of the company are considered. The basic constituent documents of a joint stock company, management bodies, conditions of liquidation and reorganization are studied in detail. In this case, the joint stock company is considered as a special form of organizational and legal form of enterprise, and its relationship to the stock market is defined. The main advantages of joint-stock companies are revealed and conclusions about their significance and role in the system of national economy are drawn. The role of joint stock companies in the development of the economy is substantiated by specific conclusions. The importance and necessity of joint-stock company in the development of entrepreneurship in the country were considered. The obstacles to the development of joint stock companies, taking into account their features in comparison with other organizational forms were revealed. Insufficient development of the stock market in Kazakhstan has had a significant impact on the activities of joint stock companies. Therefore, one of the key issues is the development of the stock market, increasing the investment attractiveness of joint stock companies, their liquidity and market value of shares.

Corporate disclosure of CO2 embedded in oil and gas reserves: stock market assessment in a context of global warming

PurposeThe authors assess the informativeness for stock markets of proven reserves of oil and gas, and embedded CO2 in those reserves.Design/methodology/approachBased on a two-step regression approach, the authors attempt to test the relationship between proven reserves, CO2 embedded in those reserves and the stock market value controlling for the selection bias (i.e. the decision of managers to disclose environmental information about embedded CO2).FindingsResults, based on a sample of the US and Canadian firms are the following. Proven reserves increase the firm’s value, while embedded CO2 reduces the stock market value substantially. Furthermore, the decision of managers to disclose information about embedded CO2 is positively related to analyst following, share price volatility, firm size, and institutional ownership.Originality/valueThe current study assesses the long-term incidence of embedded CO2 (in oil and gas proven reserves) on firms’ stock market value, while most studies are focusing on yearly CO2 emissions.

Early and late-stage startup funding in hospitality: Effects on incumbents' market value

This study investigates the effect of funding rounds received by travel startups to assess stock market awareness of these potential new entrants. Using event analysis on the incumbent firms' stock market value we found that early-stage funding for startups offering traditional and alternative hotel and lodging services have a negative and positive effect, respectively. For startups offering intermediary services we found a negative effect of late-stage funding rounds. The effects also differed depending on the level of market commonality and resource similarity between startups and incumbent hotel firm. The findings support awareness of competition as a critical managerial task. This study offers an understanding of startups in the travel industry and provides insights for practitioners.

Trading Stocks Based on Financial News Using Attention Mechanism

Sentiment analysis of news headlines is an important factor that investors consider when making investing decisions. We claim that the sentiment analysis of financial news headlines impacts stock market values. Hence financial news headline data are collected along with the stock market investment data for a period of time. Using Valence Aware Dictionary and Sentiment Reasoning (VADER) for sentiment analysis, the correlation between the stock market values and sentiments in news headlines is established. In our experiments, the data on stock market prices are collected from Yahoo Finance and Kaggle. Financial news headlines are collected from the Wall Street Journal, Washington Post, and Business-Standard website. To cope with such a massive volume of data and extract useful information, various embedding methods, such as Bag-of-words (BoW) and Term Frequency-Inverse Document Frequency (TF-IDF), are employed. These are then fed into machine learning models such as Naive Bayes and XGBoost as well as deep learning models such as Convolutional Neural Network (CNN) and Long Short-Term Memory (LSTM). Various natural language processing, andmachine and deep learning algorithms are considered in our study to achieve the desired outcomes and to attain superior accuracy than the current state-of-the-art. Our experimental study has shown that CNN (80.86%) and LSTM (84%) are the best performing models in relation to machine learning models, such as Support Vector Machine (SVM) (50.3%), Random Forest (67.93%), and Naive Bayes (59.79%). Moreover, two novel methods, BERT and RoBERTa, were applied with the expectation of better performance than all the other models, and they did exceptionally well by achieving an accuracy of 90% and 88%, respectively.

Strategic Analysis Of The Acquisition Of Pt. Axis Telekom Indonesia By Pt. Xl Axiata

Introduction: XL began out its enterprise as a wellknown buying and selling and offerings enterprise on 6 October 1989 beneathneath the call PT Grahametropolitan Lestari. In 1996, XL input the telecommunications quarter after acquiring a GSM 900 running license and formally released GSM offerings. Method: To achieve this goal, research was carried out with using pure quantitative research and then to process the data used descriptive quantitative research. Secondary data sources in this study from the internet or research from another author. Then secondary data is also obtained from previous articles. Secondary data sources from this research are documents from articles, and journals about merger. Results: On December 26, 2013, XL signed an settlement to collect AXIS. Conditional income buy settlement (CSPA) carried out with Saudi Telecom Company (STC) and Teleglobal Investment BV (Teleglobal), that's a subsidiary of STC. XL is stated to be paying the cost the agreed nominal proportion and could pay a part of the debt and obligations AXIS. Conclusion: There is a significant effect of acquisition on the stock market value PT. XL axiata tbk. at three years (12 Quarterly) after the acquisition. XL stock market value axiata tbk. experienced a decrease in the average value, from 44,860,462,622,714.59 to 37,496,902,892,475.75..