Convertible bond announcement effects: why is Japan different?

U.S. and Japanese firms dominate global convertible bond issuance. Previous research documents more favorable convertible bond announcement effects in Japan than in the U.S. and other developed countries. Using a global sample of convertible bonds issued from 1982 to 2012, we find that the more favorable announcement effects of Japanese convertibles are driven by their stated uses of proceeds. Japanese convertibles more often include capital expenditure as an intended use, while U.S. firms tend to mention general purposes to motivate their offering. Our findings illustrate the value to firms of being more explicit when disclosing the intended use of proceeds of security offerings

Mergers and acquisitions transactions strategies in diffusion - type financial systems in highly volatile global capital markets with nonlinearities

The M and A transactions represent a wide range of unique business optimization opportunities in the corporate transformation deals, which are usually characterized by the high level of total risk. The M and A transactions can be successfully implemented by taking to an account the size of investments, purchase price, direction of transaction, type of transaction, and using the modern comparable transactions analysis and the business valuation techniques in the diffusion type financial systems in the finances. We developed the MicroMA software program with the embedded optimized near-real-time artificial intelligence algorithm to create the winning virtuous M and A strategies, using the financial performance characteristics of the involved firms, and to estimate the probability of the M and A transaction completion success. We believe that the fluctuating dependence of M and A transactions number over the certain time period is quasi periodic. We think that there are many factors, which can generate the quasi periodic oscillations of the M and A transactions number in the time domain, for example: the stock market bubble effects. We performed the research of the nonlinearities in the M and A transactions number quasi-periodic oscillations in Matlab, including the ideal, linear, quadratic, and exponential dependences. We discovered that the average of a sum of random numbers in the M and A transactions time series represents a time series with the quasi periodic systematic oscillations, which can be finely approximated by the polynomial numbers. We think that, in the course of the M and A transaction implementation, the ability by the companies to absorb the newly acquired knowledge and to create the new innovative knowledge bases, is a key predeterminant of the M and A deal completion success as in Switzerland.Comment: 160 pages, 9 figures, 37 table

Impairment losses: causes and impacts

Purpose - To analyze recognition of impairment losses in tangible and intangible assets, and their relevance to investors in companies listed in the Lisbon and Madrid Stock Exchange (2007-2011).Methodology - Quantitative analysis of a panel data sample of 80 companies listed in the Lisbon and Madrid Stock Exchange (2007-2011) was carried out. Panel data linear and non-linear regression models were estimated.Findings - We found that the amount of impairment losses showed an upward trend, and that these losses are most significant among intangibles, especially goodwill (GW). We also found that the probability of recognition of impairment losses is positively influenced by the dimension of entities and negatively by market value (p < 0.10). Portuguese export-oriented companies have a higher probability of not recognizing impairments. However, Portuguese companies with higher market values have greater probability of recognizing impairment losses, contrary to the sample as a whole, in which the relationship is negative (p < 0.10). The results also suggest that there is a smoothing effect on results because of impairments, especially in IBEX35 companies. As to the relevance of impairment losses to market value, we confirm a significant negative relationship, in line with conclusions from previous studies.Originality/value - This study contributes to the introduction of the cultural factor in this analysis, highlighting the differentiated behaviors between Portuguese and Spanish companies

ADOPTION OF RFID AND ITS LONG TERM IMPACT ON FIRM VALUE

With the growing scale of RFID investment, the relationship between RFID and firm value has attracted the attention of a lot of researchers. Prior research had employed the event study method to examine the short term market reaction to RFID adoption and found significant negative abnormal return. In this paper, we extend previous research by investigating the long term impact of RFID investment on firm market value using the CPA (Calendar Portfolio Analysis), 108 announcements related to 74 publicly traded companies were analysed. Our results indicate an overall significant negative impact on long term abnormal return of market value after adoption of RFID. It is also discovered that non-US based firms, late adopters, manufacturers, highly diversified firms, high financially unhealthy firms and low growth potential firms suffered more negative impact in the long term. The results signify that the market is impacted by the risks associated with the use of a new and disruptive technology like RFID and may not yet be ready to accept it as a standard technology that is adopted by firms. Put together, our results provide new insights into how RFID and other contextual factors interact to affect the financial performance of firms in the long run

It Pays to Be Green: A Hedonic Stock Price Model for Environmentally Friendly Large U.S. Firms

This study attempts to estimate the non-market value of the environmental performance of a firm using a stock price model derived from Rosen’s hedonic price theory. Two different stock market models are developed to estimate the model, a basic firm’s stock market model and a modified Capital Assets Pricing Model (CAPM). The explanatory variables include risk factors, non risk stock characteristics, and corporate environmental policy, conduct and performance. This study uses Newsweek’s 2009 Green Ranking scores. The results show that risk factors, non-risk stock characteristics, and environmental scores variables are statistically significant in affecting stock price and equity return. The willingness to pay (WTP) are 3¢, 5¢, and 18¢, respectively for the green policy and performance score (GPPS), the reputation survey score (RSS), and the green score (GS). The four scores increase return on equity as much as 0.06%, 0.38%, 0.40%, and 2.06% respectively. A one point improvement in the three environmental scores is associated with an increase in an average firm’s value (market capitalization) of $17,840,820,$29,043,195, and $99,576,670 respectively.hedonics model, stock price, CAPM, Newsweek’s 2009 green ranking, Environmental Economics and Policy,

The effect of FED's quantitative easing policy on listed companies and sectors in South Africa

This paper examines the effect of Quantitative Easing (QE) on listed companies and sectors in South Africa. The unconventional monetary policy carried out by the developed markets had spill over effects in emerging market economies. We focus on the policies performed by the United States. Our interest is to find out whether the QE announcements had any impact on the returns of listed companies and sectors in South Africa. An exploratory analysis is done on the macroeconomic and financial indicators in SA to provide grounds for doing the analysis on the listed companies. This analysis shows that the exchange rate and portfolio inflows were impacted by QE. However, other local factors were in play in affecting the exchange rate. The shrinkage in the global economic activity affected the Gross Domestic Product (GDP) growth rate. The changes in inflation cannot be attributed to QE. Most of the portfolio inflows were in the bond market and since some were directed to the equity market we proceed to check whether stocks and sectors had abnormal returns as a result. Our empirical analysis shows that only three companies had significant Cumulative Abnormal Returns (CARs) in the three phases of QE. On the sector front, nine out of the 34 sectors had significant CARs every time QE was announced. A broader classification of these sectors into industries shows that the industries represented are industrials, consumer goods, consumer services and financials. In QE1, the industrials industry and the consumer services industry had negative CARs but in QE2 and QE3, they had positive CARs. The consumer goods industry had positive CARs during the three phases of QE. This research concludes that QE1 had the greatest impact on the Johannesburg Stock Exchange (JSE) and its impact was negative. QE2 had a positive impact on the JSE since most companies and sectors had significant positive CARs. The impact of QE3 on sector abnormal returns was almost neutral. We also provide an investment strategy on the JSE using various indices for the periods following QE2 and QE3. Out of the 14 indices used, the small caps index is given a higher weighting in both portfolios due to its low risk

An Exploratory Study of Patient Falls

Debate continues between the contribution of education level and clinical expertise in the nursing practice environment. Research suggests a link between Baccalaureate of Science in Nursing (BSN) nurses and positive patient outcomes such as lower mortality, decreased falls, and fewer medication errors. Purpose: To examine if there a negative correlation between patient falls and the level of nurse education at an urban hospital located in Midwest Illinois during the years 2010-2014? Methods: A retrospective crosssectional cohort analysis was conducted using data from the National Database of Nursing Quality Indicators (NDNQI) from the years 2010-2014. Sample: Inpatients aged ≥ 18 years who experienced a unintentional sudden descent, with or without injury that resulted in the patient striking the floor or object and occurred on inpatient nursing units. Results: The regression model was constructed with annual patient falls as the dependent variable and formal education and a log transformed variable for percentage of certified nurses as the independent variables. The model overall is a good fit, F (2,22) = 9.014, p = .001, adj. R2 = .40. Conclusion: Annual patient falls will decrease by increasing the number of nurses with baccalaureate degrees and/or certifications from a professional nursing board-governing body