Showing papers on "Market capitalization published in 2015"
TL;DR: In this article, the influence of companies' financial factors on the extent of corporate environmental sustainability reporting (CESR) was revisited in an impressive sample of 3931 companies operating in 51 industries and 59 countries.
Abstract: This paper revisits the influence of companies’ financial factors on the extent of corporate environmental sustainability reporting (CESR) in an impressive sample of 3931 companies operating in 51 industries and 59 countries. A CESR composite index is constructed for each company that focuses on the G3 core environmental indicators from the Global Reporting Initiative because they are material for most organizations. In a methodological innovation, this study employs a quantile regression that unfolds certain interesting effects of financial drivers on the intensity of CESR that have not previously been revealed. Considering a combination of the main underlying theories of corporate sustainability reporting – legitimacy theory, agency theory, political costs theory, and signal theory – offers a better understanding of the complex structure of the dependencies found among factors such as company size, leverage, return on assets, research and development spending, market return and market capitalization, and commitment to environmental reporting. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment
124 citations
TL;DR: In this paper, the authors identify time trends in indexing effects and the types of funds that provide liquidity to indexers, and identify the most popular types of indexing funds.
Abstract: The Russell 1000 and 2000 stock indexes comprise the first 1000 and next 2000 largest firms ranked by market capitalization. Small changes in the capitalizations of firms ranked near 1000 move them between these indexes. Because the indexes are value-weighted, more money tracks the largest stocks in the Russell 2000 than the smallest in the Russell 1000. Using this discontinuity, we find that additions to the Russell 2000 result in price increases and deletions result in price declines. We then identify time trends in indexing effects and the types of funds that provide liquidity to indexers.
123 citations
TL;DR: It is found that the presence of what the authors call "kingpins"-firms with superior capabilities, modeled in this study as having superior market capitalization and as being disproportionately important in terms of research and development R&D-is correlated with a higher share of total sector value, suggesting that kingpins can help a segment to become a "bottleneck."
Abstract: This paper explores the dynamics of value distribution within a sector, using data on the U.S. computer industry as an illustration. It provides exploratory quantitative evidence for the way in which conditions within the segments of a sector's value chain affect the profitability of those segments compared with the sector as a whole. To consider how value shifts from one part of the sector such as computer assemblers to another such as software and microprocessor makers, we look at how conditions within a segment such as software developers affect changes in the value share of that segment compared with the entire sector in terms of market capitalization. We find that the presence of what we call "kingpins"-firms with superior capabilities, modeled in our study as having superior market capitalization and as being disproportionately important in terms of research and development R&D-is correlated with a higher share of total sector value, suggesting that kingpins can help a segment to become a "bottleneck." Sales concentration and the level of R&D expenditure are not always reliable predictors. Kingpins exert a positive externality on their direct competitors, yet their segments display increasing internal inequality over time, making the presence of kingpins a double-edged sword for their peers. Our findings extend recent work on industry architectures, highlighting the interconnectedness of different segments within a sector. They also provide a structure to help study the dynamics of "value migration," which has not yet attracted much academic scrutiny.
73 citations
Posted Content•
TL;DR: The cryptocurrency market is thus a market of competing private irredeemable monies (or would-be monies) as discussed by the authors, which are not anyone's liability, unlike bank account balances.
Abstract: Cryptocurrencies like Biteoin are transferable digital assets, secured by cryptography. To date, all of them have been created by private individuals, organizations, or firms. Unlike bank account balances, they are not anyone's liability. They are not redeemable for any government fiat money such as Federal Reserve Notes or for any commodity money such as silver or gold coins. The cryptocurrency market is thus a market of competing private irredeemable monies (or would-be monies). Friedrich A. Hayek (1978a) and other economists over the last 40 years could only imagine how market competition among issuers of private irredeemable monies would work. Today we have an actual market to study. In what follows I will discuss the main economic features of the market. I also discuss whether the market is purely a bubble. As an introduction to the topic, I offer the following comic verse about the contrast between Biteoin and the physical gold coins of the past: In the past, money's value was judged with our teeth; We bit coins to confirm they were real. Now a Bitcoin's just data, no gold underneath. That's okay if it buys you a meal. (1) The Size and Composition of the Cryptocurrency Market Bitcoin rightly gets the lion's share of media attention, but it is not alone in the market for cryptocurrencies. The authoritative website CoinMarketCap.com tracks the U.S. dollar price and total "market cap" (price per unit multiplied by number of units outstanding) for each of more than 500 traded cryptocurrencies. Bitcoin is the largest by far. On a recent day (March 9, 2015), the site showed Bitcoin trading at $291 per unit, with a market cap of $4.05 billion. The second and third largest cryptocurrencies, Ripple and Litecoin, had market caps respectively 8.5 percent and 1.8 percent as large. The entire set of non-Bitcoin cryptocurrencies (known as "altcoins") had a market cap of roughly $619 million, or 15 percent of Bitcoin's. Stated differently, Bitcoin had roughly 87 percent of the market, altcoins 13 percent. In percentage terms, altcoins do a higher share of Bitcoin's business than Bitcoin does of the Federal Reserve Note's business (currently $1.35 trillion in circulation). In trading volume the percentage share of altcoins (led by litecoin and Ripple) has been similar. The cryptocurrency market has grown about fourfold in market cap over the last 22 months, with altcoins growing faster than Bitcoin. This is seen by comparing recent data to the oldest snapshot of the CoinMarketCap site available via the Internet Archive "Wayback Machine," which reports data for May 9, 2013. On that date, Bitcoin had a price of $112 per unit, and a market cap of $1.2 billion. The two largest altcoins at that time, Litecoin and Peercoin (aka PPCoin), had market caps respectively 4.7 percent and 0.4 percent as large. Only 13 altcoins were listed. Jointly their market cap was about 6 percent of Bitcoin's, giving Bitcoin 95 percent of the market. Since then, the market share of altcoins has doubled, and their market cap has grown ninefold. Trading volumes then were not reported. At $4.05 billion, the market cap of Bitcoin, as of March 2015, was slightly smaller than the dollar value of the September 2014 monetary bases of the Lithuanian litas ($5.8 billion) and the Guatemalan quetzal ($5.5 billion), but larger than those of the Costa Rican colon ($3.3 billion) and the Serbia dinar ($3.3 billion). (2) The August 2014 figures from the Central Bank of the Bahamas do not provide the monetary base, but count Bahamian dollar currency in circulation at $210 million, less than two-thirds of Ripple's recent market cap of around $344 million. Medium of Exchange, Store of Value, and Medium of Remittance Functions The retail use of Bitcoin as a medium of exchange for goods and services is small to date, but is growing. In December 2014, Microsoft began accepting bitcoin payments "to buy content such as games and videos on Xbox game consoles, add apps and services to Windows phones or to buy Microsoft software" (BBC 2014). …
61 citations
TL;DR: For example, this article found that public companies with VC backing employ four million people and account for one-fifth of the market capitalization and 44% of the research and development spending of U.S. public companies.
Abstract: Over the past 30 years, venture capital has become a dominant force in the financing of innovative American companies. From Google to Intel to FedEx, companies supported by venture capital have profoundly changed the U.S. economy. Despite the young age of the venture capital industry, public companies with venture capital backing employ four million people and account for one-fifth of the market capitalization and 44% of the research and development spending of U.S. public companies. From research and development to employment to simple revenue, the companies funded by venture capital are a major part of the U.S. economy.
52 citations
TL;DR: The authors used a nonparametric panel data model to estimate the financial system-economic growth relationship and found that as long as a country's domestic credit and private credit are above their cross-sectional mean, they have a positive effect on GDP growth.
45 citations
TL;DR: Simulations demonstrate that the stock selection based on financial ratios can be used to choose the best companies in operational terms, obtaining returns above the market average with low variances in their returns.
Abstract: This work proposes a multi-objective GA to efficiently manage a stock portfolio.Two objectives the return and the risk (variance of returns) are used to optimize the models.To select the best companies the algorithm uses fundamental financial ratios.To find the best entry point the algorithm uses technical indicators.The results found outperform the main indexes with lower volatility. This paper describes a new approach to portfolio management using stocks. The investment models tested incorporate a fundamental and technical approach using financial ratios and technical indicators. A Multi-Objective Evolutionary Algorithms (MOEA) with two objectives, the return and the risk, are used to optimize the models. Three different chromosomes are used for representing different investment models with real constraints equivalent to the ones faced by portfolio managers. To validate the present solution three case studies are presented for the S&P 500 for the period June 2010 until 2014. Simulations demonstrate that the stock selection based on financial ratios can be used to choose the best companies in operational terms, obtaining returns above the market average with low variances in their returns. The increase of fundamental indicators enhances the quality of the chromosomes found by the MOEA, and the results of real simulations become more precise. Some of the best chromosomes found by the algorithms invest in stocks with high return on equity (ROE), in conjunction with high rate of growth of the net income and a high profit margin. To obtain stocks with high valuation potential, it is necessary to choose companies with a lower or average market capitalization, low PER, high rates of revenue growth and high operating leverage.
42 citations
TL;DR: In this paper, the authors focused on a proposed valuation method including real estate market cycle analysis in real estate valuation process, which includes in the traditional Dividend Discount Model more than one g-factor in order to plot property market cycle.
Abstract: This paper is focused on a proposed valuation method including real estate market cycle analysis in real estate valuation process. Starting from early works on this field (d'Amato 2003) the work highlight the dangerous gap between academic research on property market cycles and professional practice of property valuation. The danger of this gap comes from the fact that in spite it is well documented that the property market has a “natural” cyclical behaviour, the opinions of value based on income approaches still relies on assumption of a stable or perpetually growing (or decreasing) income. This may be one generating factors of the real estate bubble and the subsequent financial markets crisis experienced recently. This paper offers a general introduction on cyclical capitalization as a further family of valuation methodologies based on income approach. This method includes in the traditional Dividend Discount Model more than one g-factor in order to plot property market cycle. An empirical appli...
41 citations
TL;DR: In this article, the authors investigated the effects of both firm-specific and macroeconomic indicators to firms' varying financial leverage in those primary sub-sectors overtime, and the bottom line was that firms with different market capitalization rates in each portfolio acted differently in regard to the magnitude of fi...
Abstract: Purpose – This paper aims to seek answers to a primary question: “How much do divergent leverage factors account for fluctuations in time-varying financial leverage in leading hospitality sub-sectors decomposed by four exclusive sub-portfolios?” In the path of seeking answers, this paper investigated the effects of both firm-specific and macroeconomic indicators to firms’ varying financial leverage in those primary sub-sectors overtime. Design/methodology/approach – In each sub-sector portfolios, firms were sorted based on market-to-book values (Mktbk it ) with median breakpoint percentiles. For hypothesis testing, this paper constructed panel regression models with firm fixed-effects to layout fluctuant financial leverage phenomenon engaged with a set of 11 leverage factors in each Mktbk it sorted sub-sector portfolios. Findings – Results exhibited assorted evidences. The bottom line was: firms with different market capitalization rates in each portfolio acted differently in regard to the magnitude of fi...
40 citations
TL;DR: In this paper, a number of different characteristics reflecting the economic potential of transnational corporations have been used in this article such as: asset value, employment rate, sales volume and research and development potential, which are linked to selected parameters describing the volume of international production.
Abstract: The following article attempts to answer the question about the role transnational corporations (TNCs) play in the modern world. The issues discussed in this article have been presented in two main parts. The first part focuses on the world’s largest TNCs according to the following criteria: the value of the revenues, market capitalization and foreign assets. The discussion in the second part focuses on defining the role that transnational corporations play in the world economy. A number of different characteristics reflecting the economic potential of TNCs have been used in this article such as: asset value, employment rate, sales volume and research and development potential, which are linked to selected parameters describing the volume of international production. The analysis of TNC development and their present position has been presented from a historical perspective, which made it possible to identify the conditions of as well as the major changes in the process of enterprise internationalisation. The following article highlights the dynamic development of corporations in developing countries and the ever more common phenomenon of state-owned enterprises or enterprises with a state’s capital playing a role on the international stage.
37 citations
TL;DR: In this paper, a structural theoretically founded model of the South African stock market was developed using co-integration and error-correction techniques, respectively estimating the long-term equilibrium or intrinsic value of the stock market, and the short-term fluctuations around the quilibrium level.
Abstract: A wealth of literature exists concerning the modelling of stock markets, as well as the examination of the relationshiop between share price and various economic factors, both theoretically and empirically. However, most studies use data for developed countries in their analyses, while the literature moselling emerging stock markets in general, and the south African stock market in particular, is quite sparse. This study develops a structural theoretically founded model of the South African stock market that is estimated using co-integration and error-correction techniques. These techniques respectively estimate the long-term equilibrium or intrinsic value of the stock market, and the short-term fluctuations around the quilibrium level. According to the results, share prices are co-integrated with the variables dictated by the expected present value model of asset price determination. The short-term fluctuations are determined by various factors such as interest rates, a risk premium, the exchange rate, foreign stock market adn other variables.
Posted Content•
01 Jun 2015
TL;DR: In this article, the authors investigate the possible association between the firm's ownership structure and dividend policy and whether the corporate governance (CG) practices adopted by the firm have any impact on dividend policy.
Abstract: In this article, we investigate the possible association between the firm's ownership structure and dividend policy and whether the corporate governance (CG) practices adopted by the firm have any impact on dividend policy. In India the presence of family-run firms, with concentrated ownership, is a reality and we try to understand whether such firms have any significantly different approach to dividend policy compared to non-family-run companies.The use of debt by firms in their capital structure acts as an additional monitoring mechanism and we propose to analyse whether this has any impact on dividend policy.We explore the determinants of dividend policy of Indian firms. Thus, firm characteristics which seem to have an impact on dividend policy, like profitability, liquidity, growth, income volatility, size and age are investigated. We use a panel of 51 top Indian listed firms, in terms of market capitalisation (BSE 100 and NIFTY 100), over the 5-year period from 2007–2008 to 2011–2012 for our analysis...
TL;DR: In this article, the authors used the Diebold and Yilmaz's spillover index methodology to extract spillover indices representative of the return volatility spillover effects of the United States, the developed portion of the Euro area, and Japan on financial markets in Asia, the Gulf Cooperation Council countries, Eastern and Central Europe, Africa, and Latin America.
01 Jan 2015
TL;DR: In this paper, an analysis of the behavior of the recently constituted Spanish REITs (SOCIMIs) compared to equivalent investment vehicles in other markets was performed, from a financial perspective, and a model was defined that can forecast the ratio obtained when dividing market capitalization by the Net Asset Value (P/NAV) of a SOCIMI.
Abstract: a b s t r a c t An analysis has been performed, from a financial perspective, on the behaviour of the recently constituted Spanish REITs (SOCIMIs) compared to equivalent investment vehicles in other markets. The aim is to broaden this research field, which has barely been studied so far. It is shown that the creation of a SOCIMI is an effective alternative for companies to obtain liquidity through their real estate assets, compared to other more common alternatives such as the disposal of assets or obtaining bank finance. Furthermore, a model has been defined that can forecast the ratio obtained when dividing market capitalization by the Net Asset Value (P/NAV) of a SOCIMI, which is a key variable for both investors and companies interested
TL;DR: In this article, the determinants of foreign direct investment (FDI) for 88 countries in the 1985-2011 period, using a static and dynamic panel data analysis, have been examined, and the results show that urbanization rate, the ratio of population over the age of 65, social security spending and health spending have a negative and statistically significant impact on FDI, while per capita GDP, GDP growth, market size, inflation rate, unemployment rate, labor force growth, credit to private sector, market capitalization and control of corruption have a statistically significant positive impact.
Abstract: This paper examines the determinants of foreign direct investment (FDI) for 88 countries in the 1985–2011 period, using a static and dynamic panel data analysis. The results show that urbanization rate, the ratio of population over the age of 65, social security spending and health spending have a negative and statistically significant impact on FDI, while per capita GDP, GDP growth, market size, inflation rate, unemployment rate, labor force growth, credit to private sector, market capitalization and control of corruption have a statistically significant positive impact on FDI inflows. In addition, financial openness and energy imports to the host nation have both statistically significant negative and positive impacts on FDI inflows.
TL;DR: In this paper, the authors focus on SME exchange development in emerging market countries and present some of the actions that exchanges can take to reduce issuance costs, in time and money for SMEs, without compromising the prudential needs of investors.
Abstract: In recent years, many emerging market countries have developed or are in the process of developing SME Exchanges to provide financing to SMEs, but few have succeeded. This paper aims to help stock exchanges and policy makers think through the key questions to be addressed to determine if, when, how and for whom to develop an SME Exchange in emerging market countries. It takes stock of some of the actions that exchanges can take to reduce issuance costs, in time and money for SMEs, without compromising the prudential needs of investors. The paper draws on the experience of seven SME Exchanges and the World Federation of Exchanges that participated in a workshop organized and led by the WBG to discuss these and other questions. It does not recommend a specific model to follow and does not address specific context issues, however the analysis suggests approaches that are widespread and/or could be beneficial to consider such as (1) focus on SMEs with a sizeable growth rate, (2) have the SME exchange legally related to the main board, (3) do not reduce disclosure content to reduce costs, (4) allow private placements, (5) have well regulated advisors to vet issuers and provide comfort to investors about the quality of the issue, (6) have outreach, public awareness campaign and training for SMEs, (7) consider tax incentives for investors. The report is the first in a series on this topic, and subsequent reports will address and expand on related and broader issues.
TL;DR: In this paper, the performance of three asset pricing models, the Capital Asset Pricing Model, the three factor model of Fama and French (1993), and the five factor model (2015) on Indian stock market (an emerging economy) is compared.
Abstract: Asset pricing models are attempts to define the relationship between returns and risks. In this study, we test and compare the performance of three asset pricing models – the Capital Asset Pricing Model, the three factor model of Fama and French (1993) , and the five factor model of Fama and French (2015) – on Indian stock market (an emerging economy). The study is based on the constituent companies of CNX 500, and covers a period of fifteen years – from October 1999 to September 2014. The models are tested on portfolios formed on four firm characteristics – market capitalization, ratio of book-to-market equity, profitability, and investment. We find that the three factor model performs better than the Capital Asset Pricing Model in all the cases. For portfolios formed on investment, the five factor model performs better than the other models. However, except for cases in which portfolios are formed on investment, the four factor model (without an investment factor) is a more parsimonious model.
TL;DR: In this article, the authors examined the impact of foreign real estate investment on U.S. office market capitalization rates and found that a 100 basis point increase in foreign share of total investment in a U. S. metropolitan office market causes about an 8 basis point decrease in the market cap rate.
Abstract: This article examines the impact of foreign real estate investment on U.S. office market capitalization rates. The geographic unit of analysis is MSA and the time period is 2001–2013. Drawing upon a database of commercial real estate transactions, the authors model the determinants of market capitalization rates with a particular focus on the significance of the proportion of market transactions involving foreign investors. Employing several econometric techniques to analyze the data, the results suggest statistically significant effects of foreign investment across 38 U.S. metro areas. It is estimated that, all else equal, a 100 basis point increase in foreign share of total investment in a U.S. metropolitan office market causes about an 8 basis point decrease in the market cap rate.
TL;DR: In this paper, the authors investigated the impact of foreign capital inflows and economic growth on stock market capitalization in Pakistan by using the annual time series data from the period of 1976 to 2011.
Abstract: Purpose – The purpose of this study is to investigate the impact of foreign capital inflows and economic growth on stock market capitalization in Pakistan by using the annual time series data from the period of 1976 to 2011. Design/methodology/approach – The autoregressive distributed lag bound testing cointegration approach, the error correction model and the rolling window estimation procedures have been performed to analyze the long run, short run and behavior of coefficients, respectively. Findings – Results indicate that foreign direct investment (FDI), workers’ remittances and economic growth have significant positive relationship with the stock market capitalization in long run as well as in short run. Results of the dynamic ordinary least square and the fully modified ordinary least square suggest that the initial results of long-run coefficients are robust. Results of variance decomposition test show the bidirectional causal relationship of FDI and economic growth with stock market capitalization...
TL;DR: In this paper, the authors make an initial attempt to explain the housing prices for 15 major cities of different regions in India, and the overall result demonstrates that there is a dominance of fundamental factors over the non-fundamental factors in explaining the regional housing prices.
Abstract: Using quarterly data (2010Q1–2013Q4), the study makes an initial attempt to explain the housing prices for 15 major cities of different regions in India. The overall result demonstrates that there is a dominance of fundamental factors over the non-fundamental factor (speculative factors) in explaining the regional housing prices. Further, among the fundamental factors, it is observed that the share price index, non-food bank credit and foreign direct investment positively explain the housing prices, while inflation rate and a partial measure of wealth (i.e. market capitalisation) negatively explain the same. The price of gold, real effective exchange rate and net portfolio investments don’t have any influence on the housing prices. This could to some extent signify a lack of market integration among various asset markets in the Indian situation. This might also be the reason for the lesser role of speculative factors in the Indian housing market.
TL;DR: In this paper, the authors explored the links between systems of human resource management practices and the firm performance in India and found that the human resources management practices have statistically significant impact on the measures of firm financial performance.
Abstract: This paper aims to explore the links between systems of human resource management practices and the firm performance in India. Content analysis of the annual reports was done to identify the human resources attributes disclosed by a sample of 165 large sized firms in India. The financial performance measures were collected from the Prowess database. Regression analysis was used to examine the effect of the human resource management system on the financial performance of the firm. Reverse causal effect of financial performance on the human resource management system was also examined using regression analysis. The study found that the human resource management practices have statistically significant impact on the measures of firm financial performance. The reverse causal relation showed that the financial measure market capitalisation has a significant and positive influence on the human resource management practices.
TL;DR: In this article, the authors applied data from the housing market and stock market in the United States to evaluate the dynamic information transfer between the two markets, and found that housing and stock prices do not have a long-term integral relationship, but exhibit a substantial short-term causal relationship.
Journal Article•
TL;DR: In this paper, the authors investigated the impact of certain firms' attributes namely: Market Capitalization, Debt-to-Equity Financing and Earnings per Share on stock market returns of listed food and beverages firms in Nigeria for the period 2007-2013.
Abstract: Because of the mix of opinion in the literature, the mix of empirical findings, and the limited empirical works on the relationship between firms’ specific characteristics and Stock Market Returns particularly with reference to listed food and beverages firms in Nigeria, it is not out of place to conduct further research on this area to ascertain position. Hence, the study investigated the impact of certain firms’ attributes namely: Market Capitalization, Debt-to-Equity Financing and Earnings per Share on Stock Market Returns of listed food and beverages firms in Nigeria for the period 2007-2013. The population comprises all the twenty-one (21) food and beverages firms listed on the Nigerian Stock Exchange (NSE) December, 2013. Out of which nine (9) firms constitute the sample of the study. The study adopted both correlation and ex-post facto research design. The data for the study was purely from secondary sources obtained from the annual reports of the sampled firms as well as NSE fact book. Data was analyzed using several options of multiple panel data regression. But the most robust of all is OLS regression as suggested by ‘Breusch and Pagan Lagrangian Multiplier Test for Random Effect’. The findings revealed that Market Capitalization has a significant negative impact on Stock Market Returns of listed food and beverages firms in Nigeria; while the impact of Debt-to-Equity Financing and Earnings per Share on Stock Market Returns are found to be positive and statistically significant. Based on these findings the study recommend as follows: that government and policy maker (Security and Exchange Commission) should design and implement more stringent rule where firms will be compelled and monitored on providing high quality financial reporting, so as to be reporting earnings that reflect their actual performance. This would prevent investors from falling on to the trap of earnings manipulation (as it happened to shareholders of Cadbury Nigeria plc.). In addition, prospective investors should not only focus on huge returns for investing in smaller capitalized or high levered firms; rather, further analysis need to be carried out to tradeoff between risk and returns. Keywords: market capitalization, debt-to-equity financing, earnings per share, stock market returns and stock market
Book•
08 Aug 2015
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Posted Content•
TL;DR: In this paper, a multivariate regression analysis is used to investigate the relationship between DPR in Malaysian firms with profitability, size, growth opportunities, free cash flow, business risk and market to book value.
Abstract: The aim of this study is to investigate the relationship between dividend payout ratio in Malaysian firms with profitability, size, growth opportunities, free cash flow, business risk and market to book value The paper used a sample of 284 firms listed on the Kuala Lumpur Stock Exchange (KLSE) from seven sectors viz, Consumer Products, Industrial Products, Construction, Finance, Technology, Properties, and Telecommunication In order to decipher the relationships as stated above, multivariate regression analysis is used to test the hypotheses The study found that at the pooled data level for All sectors, free cash flow, return on assets, return on equity, earning per share, market to book value and market capitalization have significant positive correlation with dividend payout ratio The variable Beta, however, has a strong negative correlation with dividend payout ratio The findings however differ from sector to sector; results reflect that Market capitalization; Beta, ROA and ROE are the common variables which have influence on DPR across various sectors except in technology sector where as the variable Market capitalization is not significantly associated with DPR Similarly, ROA, which is significant determinant variable of DPR in four sectors like Construction, Consumer Products, Properties and Telecommunication Sector, it has no influence on the dividend payout ratio of the companies in the Industrial, Technology and Finance sectors
TL;DR: In this article, the authors examined the effect of stock market development on Nigeria's economic growth and revealed that stock market has the potentials of growth inducing, but has not contributed meaningfully to Nigerian economic growth.
Abstract: This study examined the effect of stock market development on Nigeria’s economic growth. The objective of the study was to determine if stock market development significantly impact on the country’s economic growth. Secondary data were employed for the study covering 1985 to 2014. Ordinary Least Square (OLS) econometric technique was used for the time series analysis in which variations in economic growth was regressed on market capitalisation ratio to GDP, value of stock traded ratio to GDP, trade openness and inflation rate. The analysis revealed that stock market has the potentials of growth inducing, but has not contributed meaningfully to Nigerian economic growth, since only 26.5% of variations in economic growth were explained by the stock market development variables. Based on this, the study suggests for an encouragement of more investors in the market, improvement in the settlement system and ensuring investors’ confidence in the market.
15 Jul 2015-International Journal of Academic Research in Accounting, Finance and Management Sciences
TL;DR: In this paper, the authors investigated the impact of exchange rate volatility and stock market performance on the inflow of foreign direct investment to Nigeria using time series data from 1980 to 2013.
Abstract: This study investigated the impact of exchange rate volatility and stock market performance on the inflow of foreign direct investment to Nigeria using time series data from 1980 to 2013. It employed the ordinary least square technique and error correction mechanism in its estimations. The result revealed that exchange rate volatility has negative and significant effect on the inflow of foreign direct investment to Nigeria both in the long run and in the short run. It further revealed that market capitalization, proxy for stock market performance was positively signed and statistically significant. Apparently, a stable and well developed capital market will definitely attract direct foreign investment to Nigeria. The study recommends the pursuance of sound exchange rate management system and policies that will lead to increase in domestic production of export commodities. The study further recommends deepening of the capital market to provide the needed funds for investment and avoidance of dollarization of the economy to reduce the stress on foreign exchange earnings. Sound foreign reserve management practices are imperative for Nigeria as measures of maintaining the value of the naira and reduce the impact of international capital shocks.
TL;DR: In this paper, the degree and determinants of European market dependence across 10 industries in 12 Euro zone and 8 non-Euro zone stock markets during the period 1992-2011 were investigated.
Abstract: This paper uses a copula model to investigate the degree and determinants of European market dependence across 10 industries in 12 Euro zone and 8 non-Euro zone stock markets during the period 1992–2011. Most of the industries in Euro countries show a dependence increase with the Euro-area after the introduction of the Euro. The effects are strongest in countries with larger market capitalization and in the Financials, Industrials, Consumer Goods, Utilities, Technology and Telecommunications industries. Overall, the export intensity, interest rate sensitivity and competitiveness of an industry and the financial development and economic openness of a country are the most important determinants of changes in equity market dependence. The period around the Lehman collapse also shows higher equity market dependence between European countries, while the lower dependence increase during the period of the recent European sovereign debt crisis suggests that country-specific factors may matter more than before.
TL;DR: In this article, a set of 372 Indian firms in the technology sector have been studied for the period 2001-2011, a decade when this sector has seen the maximum number of M&A transactions and the results show that financially strong, low-debt firms with high market capitalization are the typical acquirers in this segment and they tend to be serial acquirer too.
Abstract: Purpose – Emerging economies and technology firms in these economies have witnessed significant increase in mergers and acquisitions (M&A) activities in recent years. The purpose of this paper is to conduct an empirical research on Indian technology firms and analyze the influence of firm-specific factors on firms’ M&A decisions. Design/methodology/approach – A set of 372 Indian firms in the technology sector have been studied for the period 2001-2011, a decade when this sector has seen maximum number of M&A transactions. Findings – The results show that financially strong, low-debt firms with high market capitalization are the typical acquirers in this segment and they tend to be serial acquirer too. Originality/value – Contrary to established findings in developed economies, the authors find that Indian technology firms’ acquisition decisions are not associated with their R&D activities, opening up scope for investigations on role of technology assets in emerging market firms’ acquisition decisions.