Devidend announcements and contagion effects: an investigation on the firm listed with Dhaka Stock Exchange

Changes in dividend convey information about the earnings of the announcing firm which in turn affect the price. Security price depends on current earnings, past earnings, and future prospect of earnings. Dividend relevant theory postulates that dividend policy, dividend initiation and changes in dividend carry information about the market value of the announcing firms. Accordingly, an unexpected increase in dividends conveys positive information about the future profitability of the firm and vice versa. Firm’s management is better informed than the market about the future prospects of their firm and therefore, their action relating to any financing decision conveys information to the investors. The principal purpose of this study was to examine the intra-industry information effects of announcements of dividend initiations of the firms associated with Dhaka Stock Exchange (DSE). To test this hypothesis, we used Herfindahl Index and Tobin’s q ratio. The study found that the intra-industry effects of dividend revisions are apparent

Portfolio regulation of life insurance companies and pension funds

This paper examines the rationale, nature and financial consequences of two alternative approaches to portfolio regulations for the long-term institutional investor sectors life insurance and pension funds. These approaches are, respectively, prudent person rules and quantitative portfolio restrictions. The argument draws on the financial-economics of investment, the differing characteristics of institutions’ liabilities, and the overall case for regulation of financial institutions. Among the conclusions are: · regulation of life insurance and pensions need not be identical; · prudent person rules are superior to quantitative restrictions for pension funds except in certain specific circumstances (which may arise notably in emerging market economies), and; · although in general restrictions may be less damaging for life insurance than for pension funds, prudent person rules may nevertheless be desirable in certain cases also for this sector, particularly in competitive life sectors in advanced countries, and for pension contracts offered by life insurance companies. These results have implications inter alia for an appropriate strategy of liberalisation. 1 The author is Professor of Economics and Finance, Brunel University, Uxbridge, Middlesex UB3 4PH, United Kingdom (e-mail ‘[email protected]’, website: ‘www.geocities.com/e_philip_davis’). He is also a Visiting Fellow at the National Institute of Economic and Social Research, an Associate Member of the Financial Markets Group at LSE, Associate Fellow of the Royal Institute of International Affairs and Research Fellow of the Pensions Institute at Birkbeck College, London. Work on this topic was commissioned by the OECD. Earlier versions of this paper were presented at the XI ASSAL Conference on Insurance Regulation and Supervision in Latin America, Oaxaca, Mexico, 4-8 September 2000, and at the OECD Insurance Committee on 30 November 2000. The author thanks participants at the conference and A Laboul for helpful comments. Views expressed are those of the author and not necessarily those of the institutions to which he is affiliated, nor those of the OECD. This paper draws on Davis and Steil (2000)

Adaptive Statistical Evaluation Tools for Equity Ranking Models

A major challenge in the investment management business is to identify which stocks are likely to outperform in the future, and which are likely to perform relatively poorly. To this end the strategy adopted by Genus is to identify factors (auxiliary information about the stock such as earnings-to-price ratio or dividend yield) that they believe are associated with future out-performance (i.e. factors that have predictive ability). The best of these factors are then combined (Genus use a weighted average) into a model which is used to rank the universe of stocks month-by-month. This ranking is then used to as the input to a trading strategy, resulting in a modified portfolio. Genus had provided us with sample data, consisting of just over 12 years worth of monthly returns on a universe of 60 stocks, along with time series of 34 factors for each of the stocks. Using these data, the approach was to build software (MATLAB) models for: 1. ranking the stocks based on factor information; 2. implementing a trading strategy based on a stock ranking and assessing the performance of a given trading strategy by looking at measures such as hit ratio, information ratio and spread. The IPSW team implemented a simplified trading strategy of selling the entire portfolio each month, and using the proceeds to invest equally in the top 20% of stocks as given by the computed ranking. They also implemented the following measures of portfolio performance: excess return, hit ratio and information ratio

Exploring the impact of technological competence development on speed and NPD program performance

With growing levels of competition across industries, technological competence is increasingly viewed as crucial for businesses to maintain their long-term competitive advantage. Although there are many theoretical arguments about how firms' competences can yield competitive advantage and performance improvement, we have a limited understanding of where the capabilities originate in the context of NPD or what kind of product portfolios, internal climate and strategic alignment are required to build them. Moreover, empirical evidence for technological competence development is limited and comes primarily from case studies, anecdotal evidence, and management impressions. Accordingly, this research addresses these gaps by presenting and testing a conceptual model of technological competence development in NPD. This study makes advances in applying a dynamic capability approach to technological competence development in NPD, and investigates the impact of innovative climate, technological alignment, and project portfolio management on technological competence development as well as NPD speed. Moreover, the factors that might influence NPD program performance are also investigated. The analysis, based on data collected from 164 firms, shows that a firm's innovative climate, technological alignment and portfolio management are positively associated with technological competence development. While technological alignment was found to be negatively related to NPD speed, portfolio management and technological competence development were found to have positive effects on speed. However, innovative climate had no significant impact on speed. Moreover, technological competence development and portfolio management were found to be positively related to NPD program performance. Finally, the authors found no support for the relationship between speed and NPD program performance

The Price of Doing Good: Executive Compensation in Nonprofit Organizations

This article examines whether nonprofit executive pay patterns are consistent with the espoused social mission of these organizations. We find that nonprofit CEOs are paid a significant fixed component, and many CEOs also receive additional pay associated with managing larger sized organizations. Our analysis indicates that nonprofit executive compensation is not significantly related to CEO performance, as measured either by improved fund-raising results or better administrative efficiency. This weak pay-for-performance link may be due in part to nonprofits concern about violating the non-distribution constraint in the sector, which prohibits the distribution of excess earnings. While nonprofits may not be breaching the letter of the law, some organizations appear to challenging its spirit: We present evidence that CEO compensation is significantly higher in organizations where free cash flows is present, as measured by commercial revenues, liquid assets and investment portfolios.This publication is Hauser Center Working Paper No. 8. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers

Causes and success of brand deletions. The role of brand orientation

La eliminación de una marca es una decisión crítica dentro de la estrategia de marketing de una empresa. Pese a que en los últimos años muchas organizaciones han tomado este tipo de decisión y han acometido drásticos programas de eliminación de marcas, la literatura sobre este tema es muy escasa y fragmentada, y son múltiples las cuestiones que se deben abordar. Concretamente, en este trabajo nos proponemos examinar la influencia de las causas de eliminación de una marca –previamente clasificadas en proactivas y reactivas– en el éxito de la decisión. Además, exploramos el efecto que la orientación a la marca tiene en la mayor o menor ocurrencia de eliminaciones por causas proactivas o reactivas. Implícitamente, en el trabajo proponemos que la orientación a la marca tendrá un doble efecto indirecto positivo en el éxito de una eliminación. En primer lugar, a través de incremento de eliminaciones exitosas que ocurren por causas proactivas y, en segundo, por la reducción de eliminaciones no exitosas que sobrevienen por causas reactivas. La propuesta investigadora que realizamos se testa sobre una muestra de 155 casos de eliminación de marca. Los análisis preliminares indican que la orientación a la marca contribuye al éxito a través de la adopción de eliminaciones enfocadas en el aprovechamiento de oportunidades de la marca, tales como un mayor ajuste estratégico o unos menores costes de oportunidad. Además, la orientación a la marca previene de realizar eliminaciones simplemente por causas problemáticas, eliminaciones que no acaban arrojando grandes resultados.Brand deletion (BD) is a critical decision within a firm’s marketing strategy. Despite in recent years many organizations have pruned their brand portfolios and undertaken drastic BD programs, the literature on this topic is extremely scarce and fragmented, and several issues of BD can be investigated. This research is primarily concerned with the study of the impact of BD causes –previously classified as proactive versus reactive– on BD success. In addition, we explore the effect of the firm’s brand orientation on the occurrence of deletions by proactive versus reactive causes. Implicitly, we suggest that brand orientation will have a double positive indirect effect on BD success: first, through the increase of successful BDs due to proactive causes and, second, by the reduction of unsuccessful BDs precipitated by reactive causes. Our research proposal is tested on a sample of 155 cases of BD. Preliminary findings indicate that brand orientation contributes to the BD success through the adoption of BDs focused on taking advantage of brand opportunities, such as searching for a better strategic fit or avoiding opportunity costs. Besides, brand orientation prevents deletions due to merely problematic causes, deletions that, after all, do not generate success

Selecting projects in a portfolio using risk and ranking

There are three dimensions in project management: time, cost and performance. Risk is a characteristic related to the previous dimensions and their relationships. A risk equation is proposed based on the nature of the uncertainty associated to each dimension as well as the relationship between the uncertainties. A ranking equation that is able to prioritise projects is proposed and discussed. The problem solved here is which projects to select in a given portfolio of projects. The model is implemented in a group decision support system (GDSS) which can guide decisionmakers in their decision process. However, the system is not intended as a substitution of the decisionmaker task, but merely as an aid. The methodology used is analysis of the equations proposed and trial and error based on examples. This paper’s main contribution is the risk equation and the ranking equation

Locating Decision Rights: Evidence from the Mutual Fund Industry

Mutual fund advisors make portfolio decisions for their funds on a daily basis. We examine the location of these portfolio decision rights on two dimensions. First, we consider the geographic location of the decision rights. Second, we consider whether the decision rights remain with an advisor or are allocated to an independent sub-advisor. We argue that the allocation of portfolio decision rights involves a tradeoff between the opportunity cost of not matching decision rights with specific knowledge, and the agency costs associated with moving the decision rights to the specific knowledge. The patterns in the location of decision rights are consistent with the tradeoff being a meaningful determinant of the allocation of decision rights in the mutual fund industry. We also find that funds that are predicted to be sub-advised and are sub-advised outperform those that are predicted to be sub-advised but are not

Online Algorithms for Geographical Load Balancing

It has recently been proposed that Internet energy costs, both monetary and environmental, can be reduced by exploiting temporal variations and shifting processing to data centers located in regions where energy currently has low cost. Lightly loaded data centers can then turn off surplus servers. This paper studies online algorithms for determining the number of servers to leave on in each data center, and then uses these algorithms to study the environmental potential of geographical load balancing (GLB). A commonly suggested algorithm for this setting is “receding horizon control” (RHC), which computes the provisioning for the current time by optimizing over a window of predicted future loads. We show that RHC performs well in a homogeneous setting, in which all servers can serve all jobs equally well; however, we also prove that differences in propagation delays, servers, and electricity prices can cause RHC perform badly, So, we introduce variants of RHC that are guaranteed to perform as well in the face of such heterogeneity. These algorithms are then used to study the feasibility of powering a continent-wide set of data centers mostly by renewable sources, and to understand what portfolio of renewable energy is most effective