Thomson Reuters Database Research Articles

Product market competition, board gender diversity and corporate sustainability performance: international evidence

PurposeThis study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition moderates the effect of board gender diversity on corporate sustainability performance.Design/methodology/approachThis study uses international data extracted from global ESG data set from Thomson Reuters (Refinitiv) database. Using data of 23,137 firm-year observations from 37 countries, the authors perform regression analyses to examine the hypotheses.FindingsThe findings show that firms with high board gender diversity exhibit high corporate sustainability performance. The authors also find firms in highly competitive industries to have low corporate sustainability performance. In highly competitive industries, the positive relationship between board gender diversity and corporate sustainability performance is weakened. The results are robust to various specification tests such as alternative measures for corporate sustainability performance, board gender diversity, product market competition and also the use of propensity score matching to address endogeneity issue. Overall, the results support the prediction that board diversity and product market competition play a substitutive role in influencing corporate sustainability performance.Research limitations/implicationsThis study offers empirical evidence that the appointment of female directors is a useful way to improve a firm’s corporate sustainability performance, hence, providing significant benefits in terms of stakeholders’ values and corporate reputation.Practical implicationsThis study provides useful insights to investors and policymakers that intense industry competition might mitigate the role of board governance, particularly board gender diversity, in enhancing corporate sustainability performance.Originality/valueUsing an international data set, where the observations operate in various market and institutional differences, this study is able to extricate the positive impact of board gender diversity and product market competition on corporate sustainability performance. This study corroborates evidence that sustainability strategy and initiatives are reflections of integrated factors, including corporate governance as internal driver and market forces faced by firms as external driver.

Is it attractive to invest in alternative energy? Evidence from a five-factor Fama-French model for regional DJSI and renewable stock indexes

PurposeThis study aims to examine the attractiveness of the regional Dow Jones Sustainability Indexes (DJSI) and several renewable energy indexes during December 31, 2010 to December 31, 2019. This study uses a risk-return analysis and a set of explanatory factors. Lastly, this study conducts a comparative analysis of these indexes with conventional indexes.Design/methodology/approachThis study uses data from Eikon, a Thomson Reuters database. To analyze the indexes’ behavior, this study uses the indexes’ annual return as of December 31 for each year. Next, this study estimates the Fama and French’s five-factor model using an ordinary least squares regression for regional DJSI and renewable energy indexes.FindingsThe results show that regional DJSIs delivered returns both above and below conventional indexes. In contrast, renewable energy indexes had high betas and negative returns, making them unattractive to investors.Practical implicationsThe results imply the need for public financing programs that support the transition to a sustainable economy and reduce risk and increase the return on private investment.Social implicationsThis study provides insights for policymakers regarding the importance of sustainability indexes in the transition to a green economy.Originality/valueThis study contributes to the growing literature on Fama and French’s five-factor model of sustainability indexes, especially in the current context characterized by intense green political changes. In particular, this study complements the few studies that have addressed the economic implications of renewable energy indexes in markets.

Identify the components of sustainability reporting in the insurance industry

The reporting approach is not limited to disclose financial events in accounting. Therefore, in response to stakeholder demand and increased accountability to society, many companies around the world publish their information about environmental, social, and governance performance, which are known as sustainability reporting. The purpose of this study is to identify the environmental, social, and governance components in the insurance industry. Qualitative content analysis was used to identify the components of sustainability. Twelve sustainability reports of foreign insurance companies with the highest environmental, social and Governance scores in the Thomson Reuters database were selected by purposive sampling method. Findings showed that the components of sustainability reporting include important general information of company, sustainable investment, sustainable insurance, environmental issues, customers and employees, Diversity, social inclusion and fair opportunities, risk management, education and development, health and Welfare, compliance management, climate change, supply chain, organization integrity, Leadership structure, corporate citizen activity, and information technology. The findings also suggest that insurance companies consider a wide range of stakeholders as the target audience for their sustainability reports. The results of this study can be used by Iranian insurance companies to prepare sustainability reports.

Board characteristics and integrated reporting quality: evidence from ESG European companies

PurposeThe aim of this study is to analyze the possible relationship between board characteristics and integrated reporting quality in an international setting.Design/methodology/approachTo test the study's hypotheses, the authors applied linear regressions with a panel data, and the authors collected data from the Thomson Reuters database (ASSET4) and from the annual reports from European companies to analyze data of 253 listed companies selected from the environmental, social and governance (ESG) index between 2010 and 2019.FindingsThe reached empirical results prove to indicate well that both of the board size, independence and diversity appear to have a significantly positive effect on the integrated reporting quality. Noteworthy, also, is the fact that the appointment of an independent nonexecutive chairman is positively associated with the integrated reporting related quality, and holds for firms with a nonindependent chairman.Practical implicationsBeyond the theoretical implications, our study also has several practical implications. These findings are particularly relevant for managers, shareholders, and policymakers. Thus, stakeholders should consider the accuracy of disclosure in determining the optimal reporting strategy (reducing risk estimation, returns' stock volatility, increasing long-term shareholder value and reputation of the firm).Originality/valueThis article is motivated by the low number of works in the context about the corporate social responsibility and sustainability issues. It makes an important contribution to the academic literature by adding to the limited body of research on integrated reporting and corporate governance in an ESG company setting. The study is also important for practitioners seeking to improve the quality of their integrated reports.

Influence of ESGC Indicators on Financial Performance of Listed Pharmaceutical Companies.

The pharmaceutical industry, concerned about the impact of its activity, has integrated responsible principles and practices with a view to improving its sustainable and financial performance. This study analyzes the relationship between environmental, social, governance, and controversy indicators and financial performance, measured through return on equity (ROA), return on assets (ROE), and Tobin’s Q, which are applied to the listed companies in the Nasdaq US Smart Pharmaceuticals Index. This index is composed of 30 international companies with a presence at the global level. All the data have been extracted from the Thomson Reuters database. The analysis was performed using structural equation modeling implemented with partial least squares. The results confirm the positive relationship between the construct composed of environmental, social, and governance (ESG) indicators and the aforementioned financial ratios. Additionally, a positive relationship of the controversy indicator with Tobin’s Q is supported. This suggests that the pharmaceutical multinationals focus their investments in sustainability on ESG and pay attention to controversies to boost the visibility of the company and thus increase its value. These conclusions confirm that investing in ESG is a profitable strategy. It is also relevant for managers as it increases the profits and the market value of multinational pharmaceutical companies.

The Role of CEO Power on CSR Reporting: The Moderating Effect of Linking CEO Compensation to Shareholder Return

The aim of this research was to provide further evidence of the impact of the power of the Chief Executive Officer (CEO) on corporate social responsibility (CSR) disclosure. Additionally, we explore the moderating role of CEO compensation linked to shareholder return on the association between CEO power and CSR disclosure. The theories used follow agency theory and stakeholder theory and the sample comprised 9182 international firm-year observations collected from the Thomson Reuters database from 2009 to 2018. Our model was estimated using the generalized method of moments (GMM) estimator. The results found that CEO power was positively associated with CSR disclosure, contrary to our expectations. Additionally, our evidence also shows that CEO compensation linked to shareholder return plays a positive moderating role on the relationship between CEO power and CSR reporting.

Wpływ pandemii COVID-19 na główne indeksy giełdowe na świecie

COVID-19 impact on the main global stock indexes The aim of the study is to examine the impact of information on lockdown connected with COVID-19 on stock indexes. The hypothesis was: it is a strong impact of the lockdown announcement on stock indexes at the time of its announcement or cancelation. Panel event models were used to verify the hypothesis. The study used data from the Thomson Reuters Database for the period from 2.01.2019–10.05.2020. The analysis was based on the papers and reports on COVID-19 and the literature on behavioral finance.

Materiality Conditions in the Interplay between Environment and Financial Performance: A Graphical Modeling Approach for EEA Oil and Gas Companies

The recovery after the unprecedented pandemic crisis that Europe has currently been facing is strengthening the strong dependence between social, economic, and environmental fields, maintaining green investments and innovation at the core of the European strategies. Shifting to clean industries is a challenging mission that a complex network of stakeholders and their different interests must take into account. Within this network, the interplay between environmental and financial performance of a company represents a common point with a growing emphasis on the transparency and the materiality capacity of the disclosed information. This paper uses the Structural Equation Modeling and the Gaussian Graphical Models as graphical analysis approaches and offers a first insight about the interaction between environmental materiality measures and financial performance. A preliminary step of the scientific research consisted of a hand‐mapping investigation about materiality conditions. Starting from the Materiality Map developed by the Sustainability Accounting Standards Board (SASB), this paper extends the main concept about materiality and investigates it on three different content ranges, which focus on the general environmental policy of the company, the targets set, and its concrete footprint. The methodology approaches were grounded on a newly compiled dataset provided by the Thomson Reuters database for 194 Economic European Area (EEA) oil and gas companies. The results provide significant evidences for the manifestation of materiality and emphasize the informational content of the individual environmental measures as an important condition for its financial impact. Adding to the environmental‐financial performance relationship, our findings have both practical and academic relevance for the economic field and sustainable growth goals.

Financial contagion between the financial and the mining industries – Empirical evidence based on the symmetric and asymmetric CoVaR approach

In globalised economies, the extent, intensity and speed of the spreading of economic crises are rapidly growing. This increases the risk of doing business on a macro- and microeconomic scale. Prevention of the negative consequences of cumulative crises requires a careful study of the mechanisms of their emergence and dissemination. The main purpose of the article is to identify the contagion effect between the financial and mining sectors in eight countries, in which the raw materials industry plays an important role in economic development (Australia, Canada, China, India, Russia, South Africa, the UK and the USA). Until now, research in this area has rarely been carried out. Our results allow to indicate the direction and time distribution of cross-sectoral contagion using symmetric and asymmetric CoVaR. The research period covered the years 2008–2019, divided into three four-year time windows (2008–2011, 2012–2015, 2016–2019). The analysis was conducted at the level of both entire markets and individual entities. For “entire markets” we used the Thomson Reuters (ThR) or FTSE stock market industry indices (banking and mining), depending on the availability of the index in the ThR database. In the case of the “individual level”, the research sample comprised of three out of ten of the largest (in terms of market value at the end of 2018) banks (or bank holding companies) and mining enterprises in each country, for which stock quotations were available in the ThR database. The conclusions of the research indicate the strong impact of financial crises on the mining industry, which suggests that the banking sector was a source of financial contagion for the mining sector. In addition, our results indicate the possibility of reversing the direction of the contagion effect in the case of economies, where the raw material industry plays a strategic role and is an important determinant of economic growth. The results obtained contribute to the economics of resources and can be used in forecasts regarding the spread of crises in the financial and mining industries. Proper recognition of the direction and time distribution of the contagion effect may also be useful when selecting macro- and microeconomic tools of anti-crisis policy.

Cultural environments and the appointment of female directors on boards: An analysis from a global perspective

AbstractHofstede's six cultural dimensions (power distance, individualism, masculinity, uncertainty avoidance, long‐term orientation and indulgence) has received little attention concerning the presence of female directors on boards. Moreover, past research has only focussed on four or five of these six cultural dimensions. Thus, this research aimed to analyse how gender diversity on boards is affected by all of the Hofstede cultural dimensions in a sample of firms operating in different countries. The data for this research were collected from Thomson Reuters database. The article draws on institutional theory, which suggests that firms are influenced by cultural aspects, as they are not separated from their environment but interact with their environment through relationships with stakeholders. The findings show that cultural dimensions, such as power distance, individualism and indulgence, have a positive effect on the proportion of female directors on boards. In contrast, the dimensions of masculinity and long‐term orientation affect the proportion negatively, and uncertainty avoidance does not seem to have an influence.

Is Bigger Better? The Impact of the Size of Banks on Credit Ratings

Abstract The aim of the paper was to analyse the factors influencing European banks’ credit ratings by taking into account the size of these institutions. A literature review onthe indicators that can impact bank notes has been made. As a result, the following hypotheses have beendrawn:banks’ capital adequacy, profitability, liquidity and management quality have a significant influence on bank credit ratings. Bigger banks receive higher credit ratings than the smaller ones in similar financial conditions. To verify the presented hypotheses ordered logit panel data models have been used. The analysis has been prepared by using the quarterly data from the Thomson Reuters database for the period between 1998 to 2015. The European banks’ long-term issuer credit ratings proposed by S&P, Fitch and Moody are used as dependent variables. The sample has been divided into subsamples according to the size of a bank andbanking sector and capitalization.

“Sell” recommendations by analysts in response to business communication strategies concerning the Sustainable Development Goals and the SDG compass

This paper has two main aims: firstly, to examine the effect of pessimistic (sell) recommendations made by analysts to investors on the implementation of business communication strategies in accordance with the Sustainable Development Goals (SDGs), through the adoption of the SDG Compass. Secondly, it considers the possible corrective effect produced by these strategies on analysts’ recommendations, i.e. modifying their perception of corporate social responsibility (CSR) as an agency cost. Based on a sample of 989 international companies which disclose CSR information, obtained by merging the Global Reporting Initiative (GRI) and Thomson Reuters databases, our analysis of the results obtained shows that the companies receiving most sell recommendations were among the first to adopt the SDG Compass in a given year or in the year immediately following it. Nevertheless, this effect is limited, because the long-term implementation of CSR strategies has a relatively trivial impact on analysts’ recommendations, since there is little likelihood of change in these strategies.

Relative condition factor: Le Cren's legacy for fisheries science

Abstract: Aim In this paper we present a scientometric analysis aimed at to assess and quantify the contribution of Le Cren’s condition factor and the main ideas advanced by ‘Le Cren, 1951’ to studies on the health of individuals or populations in aquatic environments. Specifically, we addressed the following questions: (i) what are the temporal and spatial citation trends of ‘Le Cren, 1951’?; (ii) Which journals cited ‘Le Cren, 1951’ most frequently?; (iii) In which types of aquatic environments and organisms have Le Cren’s condition factor been most commonly applied?; (iv) Which of the main applications addressed in ‘Le Cren, 1951’ have been most frequently used by fisheries scientists?; (v) Which of the methods (i.e., Quételet’s index or body mass index, Fulton’s condition factor, Le Cren’s condition factor, relative weight, residual index and scaled mass index) used to estimate condition factor identified in the papers that cited ‘Le Cren, 1951’ have been most frequently used? In addition, the main criticisms of the use of the relative condition factor are discussed. Methods We carried out a scientometric analysis on the papers published from 1951 to December 2015 that cited Le Cren’s article. The papers were obtained from the Thomson Reuters database (ISI Web of Knowledge, apps.isiknowledge.com) in May 2016. Results In total, 1128 papers were assessed. The number of citations increased significantly over time. Most citations occurred in two journals (Journal of Fish Biology and Journal of Applied Ichthyology). Most of papers were carried out in marine environments. In addition, we show that Le Cren's paper has been cited mainly in articles that estimate the condition factor or the weight-length relationship of populations. Finally, we emphasize that the relative condition factor proposed by Le Cren in 1951 is still the main method used to estimate the body condition of an individual or population. Conclusions Le Cren's significant contribution to animal well-being is undeniable, and we emphasize that among the methods identified in the papers that cited ‘Le Cren, 1951’ that estimated body condition, the relative condition factor proposed by Le Cren in 1951 is still the most commonly used method.

Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms

This study examines the impact of firms’ environmental, social and governance (ESG) initiatives on financial performance. It also compares the valuation effects of corporate social performance initiatives in developed and emerging market firms. The study was based on ESG ranking scores in the Thomson Reuters database, and the sample comprised 1317 emerging market firms and 3569 developed market firms. In comparison with developed market firms, emerging market firms had higher ESG combined scores, ESG Controversy scores, category scores of resources use, workforce, human rights and corporate social responsibility strategy scores. This study finds that stakeholder initiatives positively impact valuation effects, based on all sample results. Firm-generated controversies may decrease valuation effects in the stock market. Results indicated that ESG initiatives have a significant positive to the firm performance. The presence of independent board members and ownership by investors is a positive determinant for value creation. The adoption of best practice corporate governance principles is an important determinant of the valuation of firms. Firms’ propensity to use defence mechanisms decreases valuation effects. Developed market firms received positive valuation effects due to ESG initiatives.

Growth Strategies of Media Companies: Efficiency Analysis

This paper analyzes the media and entertainment companies’ main strategic options about what to do for growing—internationalization or diversification—and how to do it—organic and inorganic growth—in a context of ever growing competition. We identify correlations between those strategies and three basic pillars of managers’ decision-making process: growth, profitability, and indebtedness. We conclude that mergers and acquisitions can generate rapid growth, but they are expensive in terms of Return on Investment Capital (ROIC) and they usually increase the leverage of the company. Therefore, the inorganic path could not be the best option for companies with difficulties to get access to capital or for very cyclical businesses. In addition, we identify that vertical integration generates a lower ROIC than horizontal integration, and we show how internationalization strategies increase the profitability of audiovisual companies. We analyze the basic indicators of 50 listed companies in the sector that meet three criteria necessary for our study: data transparency, sufficient size of the company, and a certain trajectory that would allow us to study the consequences of the chosen strategies over long periods of time, at least 15 years. We study the firms’ evolution from 2010 to 2016 with metrics from the Thomson Reuters database. In that last year, they accounted for 88 percent of global television revenue.

Investor behavior in ETF markets: a comparative study between the US and emerging markets

Purpose The purpose of this paper is to present the results of a study on investor behavior in exchange-traded fund (ETF) markets. The standard feedback trading model of Sentana and Wadhwani (1992) is used in a sample of 18 ETFs contracts in Brazil, China, South Africa, Korea, Mexico and India, as well as three ETFs contracts in the US market. Design/methodology/approach The sample includes data on daily closing prices and net asset values (NAVs) for three ETFs from each of the emerging markets of Brazil, China, Mexico, Korea and India, as well as on three ETFs from the US market. The authors used the earliest start date available in the Thomson Reuters database pertaining to all of the ETFs, and all series ended on May 5, 2017, and applied the well-established Santana and Wadhwani (1992) seminal model to evaluate evidence of feedback trading in the sample. Findings The empirical analysis suggests that there is evidence of feedback trading in emerging markets such as Brazil, Korea, Mexico and India, while there is no such evidence for the US market. The results are consistent with the view that developed markets investors are prone to pursue fundamental-driven investment strategies, while emerging markets investors appear to have informational guided behavior. Research limitations/implications Emerging markets still make up a very small part of the global ETF market, led by the USA. Nevertheless, it is extremely important that studies of this nature be gradually expanded as these markets grow, in order to verify how emerging markets compare to their developed counterparts in terms of the efficiency of information sharing and rationalization of its operations. Practical implications Emerging markets policy makers could benefit from these findings by stimulating new mechanisms that could minimize informational asymmetry and the persistence of so-called noise traders, a phenomenon observed recently in studies regarding ETF markets (Brown, Davies and Ringgenberg, 2018). Originality/value The behavior of investors was investigated by analyzing a sample of 18 ETFs from the emerging markets of Brazil, China, South Africa, Korea, India and Mexico, as well as three ETFs from the US market. Despite of being investigated separately both emerging (Charteris et al., 2014) and developed markets (Chau et al., 2011), the innovation consists in comparing those markets in a single study, pursuing to explain potential reasons for the differences observed between developed and emerging markets.

Well-Governed Sustainability and Financial Performance: A New Integrative Approach

This study investigates the interlinkages between the dimensions of corporate social responsibility (CSR-economic, environmental, social), financial performance (ROA, ROE), and corporate governance (CG), by applying the structural equation modeling technique (SEM). It is based on a sample of 614 large companies from the European Economic Area, covering specific indicators published by the Thomson Reuters database, for the years 2013–2017. The equation models are structured starting from isolated dependencies between variables, up to the global ones (direct, indirect, and total dependencies). The mixed results obtained imply that the nature and heterogenous content of CSR lead to different statistical dependencies for each of the two financial performance indicators. ROA is positively influenced by the economic dimension of CSR, but, the level of this rate does not necessarily contribute to an increase in the involvement of the company in this type of CSR actions. At the same time, ROA is influenced and affects in a negative way the environmental and social dimensions of CSR. In the case of ROE, it is influenced and impacts the economic and social dimensions in a positive way. The environmental dimension of CSR influences ROE positively, but it is negatively affected by this profitability rate. Corporate governance exerts a positive impact on all of the model’s variables, both as a direct and indirect factor of influence.

Varieties of capitalism, corporate governance mechanisms, and stakeholder engagement: An overview of coordinated and liberal market economies

AbstractThis paper examines those aspects of national institutions that affect corporate governance mechanisms at international level. The study uses the “varieties of capitalism” approach, which is concerned with the way companies interact strategically to solve the coordination problems arising from their activities. This research is based on a sample of countries operating in coordinated market economies and liberal market economies. The data were collected from the Thomson Reuters database. The findings suggest that the institutional context is associated with several corporate governance mechanisms. Specifically, our results find that the proportion of female directors on boards and the presence of corporate governance committees are higher in firms operating in liberal market economies than in those domiciled in coordinated market economies. Regarding the disclosure of corporate social responsibility information, the evidence shows that it is not affected by the varieties of capitalism measured, whereas board‐specific skills are higher in the latter than in the former. This paper offers empirical evidence at international level for the varieties of capitalism that contribute to better corporate governance structures. With regard to managerial implications, our findings show that belonging (or not) to a specific variety of capitalism impacts various mechanisms of corporate governance.

Research and partnership in studies of sugarcane using molecular markers: a scientometric approach

In this study, we applied scientometric methods and performed a science mapping analysis to investigate and describe the application of molecular markers in genetic studies for sugarcane. We analyzed 344 papers retrieved from Web of Science Thomson Reuters database, considering the time frame from 1974 to 2017, allowing the analysis of the produced scientific knowledge, temporal trends and research partnership in the subject. To our knowledge, a scientometric evaluation of the use of molecular markers for genetic studies in sugarcane has not yet been reported. Our main finding shows that dominant markers are more commonly used than co-dominant markers, and that when co-dominant markers are applied, most of the retrieved information is underexploited, due to lack of knowledge for the use of dosage information. Our results also show that despite the development of high-throughput sequencing technologies, for sugarcane only 13.33% of the studies reported the use of more than 1000 markers. We also found connectivity among researchers and institutions publishing worldwide, but only few authors represented a bridge between different research groups. Thus, the international research partnership is still low. Our findings show dominance in country publication. Six countries (India, Brazil, USA, Australia, China, and France) were responsible for 80% of the published papers and received most citations. We suggest special reinforcement in building international partnership, since collaborations occur mostly within countries. International collaboration can improve research performance and eventually lead to a better exploitation and more development of knowledge for sugarcane.

Measuring the M&A Value of Control and Synergy in Central and Eastern European Transition Economies with the Case of Avast - AVG Acquisition

We examine the valuation of synergies and control in mergers and acquisitions (M&A) in Central and Eastern European (CEE) transition economies. We determine this value based on comprehensive contemporaneous financial findings extracted from the Thomson Reuters database. Worldwide the market of mergers and acquisitions (M&A) is increasing, reaching in 2016 a value of 6.000 billion EUR globally. Among the CEE transition economies, the M&A total value in the same period was 50 billion EUR. It is widely accepted that between 60% and 80% of M&As are unsuccessful in value creation, so we further research evidences about an alternative framework to value the M&A also qualitatively. We develop a valuation model for prediction of the value of control and synergy in M&A deals. We suggest further directions for analysis in the field of M&A value creation, and recommend an alternative to the most used earning per share metric to enhance the predictability and transparency of valuation worldwide.