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Stock exchange
About: Stock exchange is a research topic. Over the lifetime, 39566 publications have been published within this topic receiving 612044 citations.
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TL;DR: In this article, the authors investigated the relationship between stock prices and exchange rates in Malaysia and found that there was no long-run relationship between the two variables, and they concluded that the countries should be cautious in their implementation of exchange rate policies.
Abstract: I. Introduction Recent high exchange rate fluctuations in the sphere of growing trade and financial liberalization have attracted a great deal of interest from both economists and policy-makers. Of particular interest has been the question of domestic economies' exposure to exchange rate risk. It is noted that fluctuations in the exchange rate can substantially affect the values of firms, through the changes in the terms of competition, the changes in the input prices, and the changes in the values of foreign currency-denominated assets (Bodnar and Gentry 1993). Domestic firms with foreign operations are obviously affected directly and, given these various channels of influences, even the firms with no foreign operations may be indirectly affected. Accordingly, firms' stock prices and the stock market may react to changes in the exchange rates. Conversely, changes in stock prices may influence the movements in the exchange rate, via firms' portfolio adjustments (Bahmani-Oskooee and Sohrabian 1992) or outflows of capital (Qiao 1996). The latter is likely to be operative if the changes in stock prices are sufficiently persistent to generate or destroy confidence in the market. Empirically, there are quite a number of studies that attempt to determine the impact on stock prices of exchange rate changes. The findings, however, are not uniform across the various studies. Some studies documented positive effects of exchange rate changes on the stock market (Aggrawal 1981), while others found negative effects (Soenen and Hennigar 1988). Yet other studies concluded that the exchange rate changes have no significant impact on the stock market (Solnik 1984). In a more recent study, Bahmani-Oskooee and Sohrabian (1992) evaluated the interactions between the Standard and Poor's Composite Index and the effective exchange rate of the dollar, using monthly observations from July 1973 to December 1988. Applying standard co-integration and Granger tests, they found bi-directional causality between the stock price index and the exchange rate. However, there was no long-run relationship between the two variables. Using daily data for the cases of Japan, Hong Kong and Singapore, Qiao (1996) found the stock price-exchange rate causal nexus to be different across countries. Specifically, the direction of causation is bi-directional for Japan, is unidirectional from the exchange rate to stock returns for Hong Kong, and is non-causal for Singapore. He also noted the presence of a strong long-run relationship in these three countries. Recently, Abdalla and Murinde (1997) investigated the same issue for the emerging markets of India, Korea, Pakistan and the Philippines. They noted that the understanding of the issue is crucial, as these countries attempt to develop their financial markets and, at the same time, move towards more flexible exchange rates. Their analysis is based on monthly observations from January 1985 to July 1994, using the IFC stock market indices for the countries and the real effective exchange rates. The results from their studies suggested unidirectional causality from exchange rates to stock prices in all the countries, except the Philippines. In the case of the Philippines, Abdalla and Murinde found the stock price to Granger caused the exchange rate. Additionally, they documented the presence of a long-run relationship for the cases of India and Pakistan. These results led them to conclude that, for the cases of unidirectional causality from exchange rates to stock prices, "the respective governments of these emerging markets should well be cautious in their implementation of exchange rate policies". The objective of this study is to extend existing studies on the stock price-exchange rate causal relationship by investigating the issue for another emerging market, Malaysia. The country is one of the open and fast-growing economies in the region. The development of its stock market is also Exceptional. …
124 citations
TL;DR: In this article, the authors examined corporate dividend behavior of the Kuala Lumpur Stock Exchange (KLSE) companies and found evidence of less stable dividend policies being pursued by the Malaysian companies.
Abstract: This study examines corporate dividend behaviour of the Kuala Lumpur Stock Exchange (KLSE) companies. Our results show the influence of industry on payout ratios. Payout ratios also vary significantly across time. The results of multinomial logit analysis reveal that the dividend behaviour of the Malaysian companies is sensitive to the changes in earnings. Further, using Lintner's framework and panel regression methodology, we find evidence of less stable dividend policies being pursued by the Malaysian companies. The results of the two-way fixed effects model reveal that there are strong individual firm and time effects in our data.
124 citations
TL;DR: In this paper, the quality of disclosure on intangibles in presentations to analysts held by firms listed in the Spanish capital market was analyzed. But, the authors focused on the specificity of the disclosure and not on the content of the presentation.
Abstract: Purpose – The purpose of this study is to analyse the quality of disclosure on intangibles in presentations to analysts held by firms listed in the Spanish capital market Given that quantification of the information provides a more precise and convincing message than qualitative disclosure, the information is measured by two indices, which are focused on the specificity of the disclosureDesign/methodology/approach – The reports of all presentations to financial analysts held by Spanish companies listed in the Madrid Stock Exchange are analysed during the year 2000 and 2001 The sample contains 257 reportsFindings – Briefly, the study finds that there are differences in the quality of the information reported to financial analysts in Spain, and that several factors, such as firm size and the levels of profitability and leverage, highly influence itPractical implications – This study contributes to the literature by analysing the disclosure of the information on intangibles beyond the commonly used disc
124 citations
TL;DR: In this article, the intervening role of corporate image and customer satisfaction on the relationship between corporate social responsibility and financial performance was investigated, and the authors concluded that corpora social responsibility significantly affects the firm's financial performance by developing a positive image among the stakeholders and decreasing overall costs.
Abstract: A great number of studies have been conducted to examine the direct impact of corporate social responsibility on firm's financial performance, but this direct relationship seems to be spurious and imprecise. Therefore, the main purpose of this study is to investigate the intervening role of corporate image and customer satisfaction on the relationship between corporate social responsibility and financial performance. Data is collected from 229 companies listed on Pakistan stock exchange using simple random sampling technique. Structural equation modelling has been used for the measurement model and for hypotheses testing. Results indicate that corporate image and customer satisfaction partially mediate the association between corporate social responsibility and financial performance. The study concludes that corporate social responsibility significantly affects the firm's financial performance by developing a positive image among the stakeholders and decreasing overall costs. This study will help management of organizations to realize the importance of corporate social responsibility.
123 citations
01 Mar 2011
TL;DR: Interestingly, security investments with commercial exploitation tend to result in higher returns than those for IT security improvement, and stock market reaction to security investments shows higher abnormal returns after the Sarbanes-Oxley Act (SOX) than any of those before it.
Abstract: In the information society, it is important for firms to manage their core information resources securely. However, the difficulty of measuring the return on an IT security investment is one of the critical obstacles for firms in making such investment decisions. By utilizing event methodology, this study examines the value of an investment in IT security, based on stock market investors' behavior toward a firms' IT security investment announcements. Based on a sample of 101 investment announcements of firms whose stocks are publicly traded in the U.S. stock market between 1997 and 2006, we find substantial support for the hypotheses that information security investment leads to positive abnormal returns for firms. Interestingly, security investments with commercial exploitation tend to result in higher returns than those for IT security improvement. Another interesting finding is that stock market reaction to security investments shows higher abnormal returns after the Sarbanes-Oxley Act (SOX) than any of those before it.
123 citations