The purpose of this research is to identify priority actions to be taken in Mexico in order to encourage tourism entrepreneurs to take advantage of and to meet domestic tourist demand. In order to do this, the role that domestic tourism has in consumption and demand both nationally and internationally is analysed; opinion leaders from the sector are interviewed and the concept mapping methodology is used in combination with multidimensional scaling to solve the difficulties of prioritizing activities, gaining consensus, and to show graphically how the various stakeholders relate. The main results show three principal groups of activities: one which can be directly addressed by entrepreneurs, and two others, which although they relate to public policy and measurement, can also be driven by the business community.
{"title":"The Mexican Tourism Business: Lessons From Domestic Demand For Business Managers","authors":"Liliana Raquel Ruiz Fuentes, Delfino Vargas Chanes","doi":"10.19030/jabr.v34i3.10173","DOIUrl":"https://doi.org/10.19030/jabr.v34i3.10173","url":null,"abstract":"The purpose of this research is to identify priority actions to be taken in Mexico in order to encourage tourism entrepreneurs to take advantage of and to meet domestic tourist demand. In order to do this, the role that domestic tourism has in consumption and demand both nationally and internationally is analysed; opinion leaders from the sector are interviewed and the concept mapping methodology is used in combination with multidimensional scaling to solve the difficulties of prioritizing activities, gaining consensus, and to show graphically how the various stakeholders relate. The main results show three principal groups of activities: one which can be directly addressed by entrepreneurs, and two others, which although they relate to public policy and measurement, can also be driven by the business community.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"507-518"},"PeriodicalIF":0.0,"publicationDate":"2018-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42388849","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-05-07DOI: 10.19030/JABR.V34I3.10169
G. Kang, Y. Yoo, S. Cha
This paper examines how institutional investors interact with sell-side analysts (hereafter, SSAs) in Korean stock market. In particular, we examine the role of institutional investors as a more sophisticated mechanism which incorporates sell-side analysts’ stock recommendation, target price, and earnings forecast more rapidly than individual investors do. Moreover, we examine whether institutional investors differentiate the quality of sell-side analysts’ information. By using a sample of 1,421 firm-year observations in Korean stock market during 2001–2011, we find that the change of institutional investor’s ownership has a significantly positive association with the level of equity value estimates based on SSAs’ earnings forecasts relative to stock prices and their stock recommendation which are considered as SSAs’ indicator of stock market’s mispricing. In addition, we find that only when SSAs provide more accurate earnings forecasts, institutional investors incorporate SSA’s information into their stock trading. Thus, we conclude that institutional investors in Korean stock market contribute to the enhancement of stock market efficiency by incorporating SSAs’ information into their stock trading more rapidly than individual investors. Our findings add to the literature by shedding a light on the unobserved interaction among more sophisticated stock market participants, such as institutional investors and sell-side analysts.
{"title":"How Do Institutional Investors Interact With Sell-Side Analysts?","authors":"G. Kang, Y. Yoo, S. Cha","doi":"10.19030/JABR.V34I3.10169","DOIUrl":"https://doi.org/10.19030/JABR.V34I3.10169","url":null,"abstract":"This paper examines how institutional investors interact with sell-side analysts (hereafter, SSAs) in Korean stock market. In particular, we examine the role of institutional investors as a more sophisticated mechanism which incorporates sell-side analysts’ stock recommendation, target price, and earnings forecast more rapidly than individual investors do. Moreover, we examine whether institutional investors differentiate the quality of sell-side analysts’ information. By using a sample of 1,421 firm-year observations in Korean stock market during 2001–2011, we find that the change of institutional investor’s ownership has a significantly positive association with the level of equity value estimates based on SSAs’ earnings forecasts relative to stock prices and their stock recommendation which are considered as SSAs’ indicator of stock market’s mispricing. In addition, we find that only when SSAs provide more accurate earnings forecasts, institutional investors incorporate SSA’s information into their stock trading. Thus, we conclude that institutional investors in Korean stock market contribute to the enhancement of stock market efficiency by incorporating SSAs’ information into their stock trading more rapidly than individual investors. Our findings add to the literature by shedding a light on the unobserved interaction among more sophisticated stock market participants, such as institutional investors and sell-side analysts.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"455-470"},"PeriodicalIF":0.0,"publicationDate":"2018-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42196197","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-05-07DOI: 10.19030/jabr.v34i3.10165
Andrew Chan
An objective of this paper is to investigate the relationship between firms' capital investment spending, cash holdings, and working capital in an expanding Asian financial market. A sample of publicly traded manufacturing firms on the Hong Kong Stock Exchange was examined during the period 2005-2014. The empirical results provide strong and statistically significant evidence on the effect of cash flow on investment. Working capital also exhibits significant relationship with capital investment spending, though the relationship is not as strong and significant as that with cash flow and cash holding. Firms with low dividend payout policy over the sample period depended heavily on cash flow, changes in cash flow and, to a lesser extent, on working capital to finance spending on fixed plant and equipment. These results suggest that the effect of capital investment spending financed by internal cash flow on firm value may depend on a firm's dividend payout.
{"title":"The Role Of Cash Holdings, Working Capital, Dividend Payout On Capital Investment","authors":"Andrew Chan","doi":"10.19030/jabr.v34i3.10165","DOIUrl":"https://doi.org/10.19030/jabr.v34i3.10165","url":null,"abstract":"An objective of this paper is to investigate the relationship between firms' capital investment spending, cash holdings, and working capital in an expanding Asian financial market. A sample of publicly traded manufacturing firms on the Hong Kong Stock Exchange was examined during the period 2005-2014. The empirical results provide strong and statistically significant evidence on the effect of cash flow on investment. Working capital also exhibits significant relationship with capital investment spending, though the relationship is not as strong and significant as that with cash flow and cash holding. Firms with low dividend payout policy over the sample period depended heavily on cash flow, changes in cash flow and, to a lesser extent, on working capital to finance spending on fixed plant and equipment. These results suggest that the effect of capital investment spending financed by internal cash flow on firm value may depend on a firm's dividend payout.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"419-426"},"PeriodicalIF":0.0,"publicationDate":"2018-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48615014","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-28DOI: 10.19030/JABR.V34I2.10138
S. Akhtar, Yanping Liu
Financial statements comprise of insightful statistics about likely risk and the return associations of many decisions and have significant role in firms’ success, particularly for SMEs. Thus, through a sample of 94 Pakistani small and medium enterprises (SMEs), this study inspects the influences that could have impact on firms’ practice of the financial statements in making significant financial decisions. Principle component analysis finds key factors which define use of financial statements containing; experience, knowledge and ability. Logit analysis then discloses that these variables have significant association with whether Pakistani SME owners use financial statements while making business decisions. Findings indicates that the owners of Pakistani SMEs practice financial statements in decision making rendering to their knowledge about financial statements, experience and finally their ability to interpret figures confined in financial statements. Outcomes should be valuable for SME owners, educators, and the service providers.
{"title":"SMEs' Use Of Financial Statements For Decision Making: Evidence From Pakistan","authors":"S. Akhtar, Yanping Liu","doi":"10.19030/JABR.V34I2.10138","DOIUrl":"https://doi.org/10.19030/JABR.V34I2.10138","url":null,"abstract":"Financial statements comprise of insightful statistics about likely risk and the return associations of many decisions and have significant role in firms’ success, particularly for SMEs. Thus, through a sample of 94 Pakistani small and medium enterprises (SMEs), this study inspects the influences that could have impact on firms’ practice of the financial statements in making significant financial decisions. Principle component analysis finds key factors which define use of financial statements containing; experience, knowledge and ability. Logit analysis then discloses that these variables have significant association with whether Pakistani SME owners use financial statements while making business decisions. Findings indicates that the owners of Pakistani SMEs practice financial statements in decision making rendering to their knowledge about financial statements, experience and finally their ability to interpret figures confined in financial statements. Outcomes should be valuable for SME owners, educators, and the service providers.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"381-392"},"PeriodicalIF":0.0,"publicationDate":"2018-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42264988","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-28DOI: 10.19030/jabr.v34i2.10139
J. Choi
Previous research on message framing has argued that fit between message framing and consumer regulatory focus influences consumer response. That is, positive frames are more persuasive for promotion-focused individuals, while negative frames are more persuasive for prevention-focused individuals. This research aims to expand the scope of previous research on message framing and argues that the match-up effect between message framing and regulatory focus, an effect established in previous research, is dependent on the strength of the message. This research further argues that the match-up effect patterns between message framing and regulatory focus differ based on whether or not consumers are making a purchase for themselves or for others. Specifically, this research hypothesizes that prevention-focused individuals tend to focus on uncertainty or risks related to choice for others and exhibit low levels of purchase intention regardless of message framing under the condition of making a purchase for others. This research also proposes that promotion-focused individuals tend to focus more on potential positive outcomes rather than negative risks when making a choice for others, resulting in a higher purchase intention regardless of message framing. That is, under the condition of making a purchase for others, the match-up effect of message framing and regulatory focus is rendered void. This research expands the scope of existing research on message framing and provides practical implications for marketing practitioners.
{"title":"Persuasive Impact Of Fit Between Regulatory Focus And Message Framing On Consumer Responses: Message Strength And Choice For Others","authors":"J. Choi","doi":"10.19030/jabr.v34i2.10139","DOIUrl":"https://doi.org/10.19030/jabr.v34i2.10139","url":null,"abstract":"Previous research on message framing has argued that fit between message framing and consumer regulatory focus influences consumer response. That is, positive frames are more persuasive for promotion-focused individuals, while negative frames are more persuasive for prevention-focused individuals. This research aims to expand the scope of previous research on message framing and argues that the match-up effect between message framing and regulatory focus, an effect established in previous research, is dependent on the strength of the message. This research further argues that the match-up effect patterns between message framing and regulatory focus differ based on whether or not consumers are making a purchase for themselves or for others. Specifically, this research hypothesizes that prevention-focused individuals tend to focus on uncertainty or risks related to choice for others and exhibit low levels of purchase intention regardless of message framing under the condition of making a purchase for others. This research also proposes that promotion-focused individuals tend to focus more on potential positive outcomes rather than negative risks when making a choice for others, resulting in a higher purchase intention regardless of message framing. That is, under the condition of making a purchase for others, the match-up effect of message framing and regulatory focus is rendered void. This research expands the scope of existing research on message framing and provides practical implications for marketing practitioners.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"393-404"},"PeriodicalIF":0.0,"publicationDate":"2018-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42160491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-28DOI: 10.19030/JABR.V34I2.10140
Yufan Shang, Junmin Xu, Fuli Li, Xinyu Zhao, Haiyun Li
Scant research has focused on how to increase the value of monetary rewards when they are delivered by leaders to employees. Drawing upon the perspectives of sensegiving and sensemaking, this study explores how leaders generate meanings of monetary rewards perceived by employee recipients in organizational settings. Using a qualitative method design and analyzing qualitative data from 291 incidents, we found that in the distribution process of monetary rewards, sensemaking of employees included strong and weak instrumental meanings as well as symbolic meanings. The results show that leaders adopted a set of sensegiving strategies in distributing monetary rewards including emphasizing money gain/loss and utility, providing feedback, valuing employees, orienting toward the future, guiding values, and publicizing. In the presence of leader’s sensegiving, employee recipients endorsed more positive symbolic meanings of monetary rewards (i.e., recognition and respect). Our research offers a richer view of the role of leader’s sensegiving in making monetary rewards gain more value through employees’ sensemaking, and enriches understanding of monetary rewards, leadership, sensegiving and sensemaking.
{"title":"How Leaders Generate Meanings For Monetary Rewards","authors":"Yufan Shang, Junmin Xu, Fuli Li, Xinyu Zhao, Haiyun Li","doi":"10.19030/JABR.V34I2.10140","DOIUrl":"https://doi.org/10.19030/JABR.V34I2.10140","url":null,"abstract":"Scant research has focused on how to increase the value of monetary rewards when they are delivered by leaders to employees. Drawing upon the perspectives of sensegiving and sensemaking, this study explores how leaders generate meanings of monetary rewards perceived by employee recipients in organizational settings. Using a qualitative method design and analyzing qualitative data from 291 incidents, we found that in the distribution process of monetary rewards, sensemaking of employees included strong and weak instrumental meanings as well as symbolic meanings. The results show that leaders adopted a set of sensegiving strategies in distributing monetary rewards including emphasizing money gain/loss and utility, providing feedback, valuing employees, orienting toward the future, guiding values, and publicizing. In the presence of leader’s sensegiving, employee recipients endorsed more positive symbolic meanings of monetary rewards (i.e., recognition and respect). Our research offers a richer view of the role of leader’s sensegiving in making monetary rewards gain more value through employees’ sensemaking, and enriches understanding of monetary rewards, leadership, sensegiving and sensemaking.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"405-418"},"PeriodicalIF":0.0,"publicationDate":"2018-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43988581","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-26DOI: 10.19030/JABR.V34I2.10136
Soo-yeon Park, Younghyo Song
This paper examines the effect of ownership structure on firm-specific stock price crash risk using listed firm (KOSPI) data in Korea. Prior literatures suggest that corporate governance has an impact on the level of disclosure and the quality. Managers may stockpile negative information about the company, but when such accumulated bad news crosses a threshold, the negative information suddenly becomes publicly available and a stock price crash is observed (Hutton, Marcus, & Tehranian, 2009). Prior studies have documented the determinants of future stock price crash risk (Jin & Myer, 2006; Hutton et al. 2009; Kim, Li, & Zhang, 2011; Hamm, Li, & Ng, 2013; Xu, Jiang, Chan, & Yi, 2013; Jo, Moon, & Choi, 2015; Kim & Zhang, 2016). However, it is hard to find the papers about corporate ownership and future stock price crash risk at the term of determinants of the risk. Compare to some financially advanced countries where ownership and management are effectively separated, there is no clear distinction between ownership and management in Korea. Using the percentage of managerial ownership and that of foreign ownership as proxies for ownership structure and measures for future stock price crash risk which was used by Callen and Fang (2013, 2015) and Kim and Zhang (2016), we conducted an empirical analysis examining the link between corporate ownership structure and companies’ subsequent stock price crash risk. We collect 4,294 firm-year observations listed on Korean market from 2002 to 2015, and we use the measures of firmspecific stock price crash risk based on Callen and Fang (2013; 2015) to examine the relation between corporate ownership structure and subsequent stock price crash risk. From the empirical tests, the percentage of managerial ownership is negatively associated with future stock price crash risk. It implies that managerial ownership increases to align the interests of shareholders and managers, it could alleviate the agency problem between them (Jensen & Meckling, 1976), helping to resolve information asymmetry and prevent bad news from being withheld, ultimately lowering future stock price crash risk. In addition, we find that higher foreign ownership significantly weakens the negative relation between the percentage of managerial ownership and future stock price crash risk. We interpret this results that the negative side of foreign ownership failed to effectively reduce agency costs, weakening the negative correlation between managerial ownership and future stock price crash risk. Our study may shed some light on the understanding of the ownership structure as a determinant of future stock price crash risk to firms and investors who want to handle crash risk in the stock market.
{"title":"The Effect Of Ownership Structure On Future Stock Price Crash Risk: Korean Evidence","authors":"Soo-yeon Park, Younghyo Song","doi":"10.19030/JABR.V34I2.10136","DOIUrl":"https://doi.org/10.19030/JABR.V34I2.10136","url":null,"abstract":"This paper examines the effect of ownership structure on firm-specific stock price crash risk using listed firm (KOSPI) data in Korea. Prior literatures suggest that corporate governance has an impact on the level of disclosure and the quality. Managers may stockpile negative information about the company, but when such accumulated bad news crosses a threshold, the negative information suddenly becomes publicly available and a stock price crash is observed (Hutton, Marcus, & Tehranian, 2009). Prior studies have documented the determinants of future stock price crash risk (Jin & Myer, 2006; Hutton et al. 2009; Kim, Li, & Zhang, 2011; Hamm, Li, & Ng, 2013; Xu, Jiang, Chan, & Yi, 2013; Jo, Moon, & Choi, 2015; Kim & Zhang, 2016). However, it is hard to find the papers about corporate ownership and future stock price crash risk at the term of determinants of the risk. Compare to some financially advanced countries where ownership and management are effectively separated, there is no clear distinction between ownership and management in Korea. Using the percentage of managerial ownership and that of foreign ownership as proxies for ownership structure and measures for future stock price crash risk which was used by Callen and Fang (2013, 2015) and Kim and Zhang (2016), we conducted an empirical analysis examining the link between corporate ownership structure and companies’ subsequent stock price crash risk. We collect 4,294 firm-year observations listed on Korean market from 2002 to 2015, and we use the measures of firmspecific stock price crash risk based on Callen and Fang (2013; 2015) to examine the relation between corporate ownership structure and subsequent stock price crash risk. From the empirical tests, the percentage of managerial ownership is negatively associated with future stock price crash risk. It implies that managerial ownership increases to align the interests of shareholders and managers, it could alleviate the agency problem between them (Jensen & Meckling, 1976), helping to resolve information asymmetry and prevent bad news from being withheld, ultimately lowering future stock price crash risk. In addition, we find that higher foreign ownership significantly weakens the negative relation between the percentage of managerial ownership and future stock price crash risk. We interpret this results that the negative side of foreign ownership failed to effectively reduce agency costs, weakening the negative correlation between managerial ownership and future stock price crash risk. Our study may shed some light on the understanding of the ownership structure as a determinant of future stock price crash risk to firms and investors who want to handle crash risk in the stock market.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"355-368"},"PeriodicalIF":0.0,"publicationDate":"2018-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46889712","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-26DOI: 10.19030/JABR.V34I2.10137
Kyungkook Im, C. Im
Overall, this paper examines and finds the relation between the ratio of accounting treatment for capitalization of research and development expenditure (RCR&D). The theoretical model derived from panel analysis resource on Korean defense industry information from 2009 to 2014 indicates that the RCR&D positively affect earnings management direction through a significantly positive relationship. Also, the effect of large defense industry firms’ RCR&D on earnings management direction is higher than that of small ones despite that large defense industry firms have discretionary accruals in (-) direction compared with small ones. In addition, the effect of defense industry firms’ RCR&D on earnings management direction is strong especially in earnings increasing group. Also the change of RCR&D is positive influence on discretionary accruals. This enforces that RCR&D can be related with earnings management direction.
{"title":"A Study On Relation Between Accounting Treatment For Capitalization Of R&D Expenditure And Earnings Management In The Korean Defense Industry","authors":"Kyungkook Im, C. Im","doi":"10.19030/JABR.V34I2.10137","DOIUrl":"https://doi.org/10.19030/JABR.V34I2.10137","url":null,"abstract":"Overall, this paper examines and finds the relation between the ratio of accounting treatment for capitalization of research and development expenditure (RCR&D). The theoretical model derived from panel analysis resource on Korean defense industry information from 2009 to 2014 indicates that the RCR&D positively affect earnings management direction through a significantly positive relationship. Also, the effect of large defense industry firms’ RCR&D on earnings management direction is higher than that of small ones despite that large defense industry firms have discretionary accruals in (-) direction compared with small ones. In addition, the effect of defense industry firms’ RCR&D on earnings management direction is strong especially in earnings increasing group. Also the change of RCR&D is positive influence on discretionary accruals. This enforces that RCR&D can be related with earnings management direction.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"369-380"},"PeriodicalIF":0.0,"publicationDate":"2018-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44887874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-26DOI: 10.19030/jabr.v34i2.10135
Salma Zaiane
The aim of this paper is to study the impact of political uncertainty, driven by the Tunisian Revolution, on return and volatility of major sectorial stock indices in the Tunisian Stock Exchange. We specifically use EGARCH (1.1) model from 01/12/2010 to 31/08/2016. This model is applied to the daily returns relevant to ten sectorial stock indices and to the Tunisian benchmark index (TUNINDEX). To test the impact of political news on returns and volatility, we divided them into two groups (good and bad news). Our results show that both of good and bad news have increased the volatility of major selected indices, including the TUNINDEX. However, the return of all indices are not affected by the political news. We then examined the impact of terrorism on the behavior of indices return and volatility. Results show that the Tunisian market responds significantly to terrorist acts. Hence, the return declines and the volatility increase the day of terrorist attacks. Furthermore, results confirm that bad news have stronger effect on the volatility than good news, which reveal the asymmetric effect of volatility.
{"title":"The Impact Of Political Instability Driven By The Tunisian Revolution On Stock Market Volatility: Evidence From Sectorial Indices","authors":"Salma Zaiane","doi":"10.19030/jabr.v34i2.10135","DOIUrl":"https://doi.org/10.19030/jabr.v34i2.10135","url":null,"abstract":"The aim of this paper is to study the impact of political uncertainty, driven by the Tunisian Revolution, on return and volatility of major sectorial stock indices in the Tunisian Stock Exchange. We specifically use EGARCH (1.1) model from 01/12/2010 to 31/08/2016. This model is applied to the daily returns relevant to ten sectorial stock indices and to the Tunisian benchmark index (TUNINDEX). To test the impact of political news on returns and volatility, we divided them into two groups (good and bad news). \u0000Our results show that both of good and bad news have increased the volatility of major selected indices, including the TUNINDEX. However, the return of all indices are not affected by the political news. We then examined the impact of terrorism on the behavior of indices return and volatility. Results show that the Tunisian market responds significantly to terrorist acts. Hence, the return declines and the volatility increase the day of terrorist attacks. Furthermore, results confirm that bad news have stronger effect on the volatility than good news, which reveal the asymmetric effect of volatility.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"339-354"},"PeriodicalIF":0.0,"publicationDate":"2018-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45687409","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-02-21DOI: 10.19030/JABR.V34I2.10131
Daecheon Yang, Kyoungwon Mo
This study examines the monitoring role of institutional investors in both mitigating the degree of downward-sticky CEO compensation and alleviating the undesirable effects of the sticky compensation on shareholder wealth. Particularly, we parallel the literature on “pay for performance” and institutional monitoring role to critically examine the measure of fluctuating pay-for-performance sensitivity, re-characterize the asymmetric compensation-performance link, and then capture managerial rent extraction. We find that sticky CEO compensation is significantly and negatively associated with firm value. Further, we find that institutional ownership decreases the compensation stickiness in underperforming firms and ameliorates its value-deteriorating effect.
{"title":"Institutional Monitoring Of Sticky CEO Compensation","authors":"Daecheon Yang, Kyoungwon Mo","doi":"10.19030/JABR.V34I2.10131","DOIUrl":"https://doi.org/10.19030/JABR.V34I2.10131","url":null,"abstract":"This study examines the monitoring role of institutional investors in both mitigating the degree of downward-sticky CEO compensation and alleviating the undesirable effects of the sticky compensation on shareholder wealth. Particularly, we parallel the literature on “pay for performance” and institutional monitoring role to critically examine the measure of fluctuating pay-for-performance sensitivity, re-characterize the asymmetric compensation-performance link, and then capture managerial rent extraction. We find that sticky CEO compensation is significantly and negatively associated with firm value. Further, we find that institutional ownership decreases the compensation stickiness in underperforming firms and ameliorates its value-deteriorating effect.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"34 1","pages":"309-324"},"PeriodicalIF":0.0,"publicationDate":"2018-02-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42071225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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