Corporate governance, analyst following and firm value

Purpose – The purpose of this paper is to examine the impact of a firm’s corporate governance (CG) mechanisms on the number of financial analysts following UK firms. The potential effect of the number of analysts following firms in the UK on the association between CG mechanisms and firm value was also examined. Design/methodology/approach – Multiple regression models were used to examine the association between CG, analyst coverage and firm value for a large sample of UK firms listed in London Stock Exchange with financial year ends between January 2003 and December 2008. Findings – It was found that the aggregate level of CG quality is positively associated with the number of analysts following UK firms. In addition, the compensation score is the main component that affects the number of analysts following UK firms. The results suggest that financial analysts are particularly concerned with how much compensation executives and directors receive. This is consistent with Jensen and Meckling (1976) who argue that chief executive officer (CEO) compensation can be used as effective mechanisms for mitigating agency costs. Hence, higher levels of CEO compensation attract more financial analysts to follow the firm. Surprisingly, when the joint effect of both CG quality and the number of analysts following on firm value was examined, no significant effect was found for both variables on firm value. Originality/value – This paper contributes to prior research by providing the first empirical evidence on the impact of disaggregated levels of CG on analyst following and firm value for a large sample of UK firms

Disclosure quality and stock returns in the UK

The purpose of this paper is to update and re-examine the role of corporate narrative reporting in improving investors’ ability to better forecast future earnings change. We also construct a risk factor for disclosure quality (DQ) and test whether such a factor is useful in explaining the time-series variation of UK stock returns. Our paper contributes to the market based accounting research in three crucial ways. Firstly, it offers updated evidence on the usefulness of corporate narrative reporting to investors. Secondly, it offers evidence that the DQ factor is a significant risk factor in the UK. Thirdly, and finally, it finds that the Fama-French factors might contain DQ related information

An Examination of the Month-of-the-year Effect at Damascus Securities Exchange

This paper explores the existence of the month-of-the-year effect in a newly established exchange of Damascus Securities Exchange (DSE). It employs Ordinary Least Squares Estimates (OLS) and dummy variables for the whole working period of the exchange from 2010 to 2015. This paper confirms the existence of positive and significant returns during May compared to remaining months. Average returns in May are six percent higher than average returns during the rest of the year. A possible explanation for May effect is dividend month premium suggested by Hartzmark & Solomon  (2013). Keywords: stock market efficiency, calendar seasonality, month-of-the-year effect, Damascus Securities Exchange. JEL Classifications: G11, G14, G19

Editorial: health financing and spending in low- and middle-income countries

The World Bank has introduced the Atlas method to determine in an econometrically valid way borderline thresholds for classifications of all national economies into low, middle, and high-income categories in an objective and predictable manner. Although this approach may be challenged to some extent, it has long served well in observation and predictions of long-term trends in GDP growth and national health expenditures (1–3). The contribution of low- and middle-income countries (LMICs) share in total health expenditures as observed through the (4) Global Health Expenditure criteria has almost doubled in terms of purchase power parity (PPP) basis from only 20% of the global share in 1995 up to almost 40% in 2013 (5, 6). These fiscal flows have been well-documented via WHO’s National Health Accounts database. This lengthy and rocky road forward for the LMICs contains many difficulties. A few core challenges include socioeconomic inequalities in medical care access and affordability, large out-of-pocket expenses, and vulnerabilities against catastrophic household expenditures. These challenges remain matters of grave concern in many LMICs (7). Broad trends give far greater grounds for optimism, however, since networks of rural and suburban health care facilities are growing and strengthening. Preventive lifestyle interventions, provision of essential medicines, and spreading of cost-effective basic medical technologies, designated in WHO policy as “best buys” interventions, all contributed to exceptionally improved early childhood survival and extended life expectancy. Current circumstances in most LMICs are characterized by aging populations, rapid urbanization, and increased citizen expectations in terms of health insurance coverage. Prescription drugs consumption is still dominated by generic medicines, with brand name originals gradually taking root. Hospital sectors are state or publicly owned in most former and modern day centrally-planned socialist economies. By contrast, in some regions like the Middle East and North African (MENA) Arabic nations, Latin America, and free-market Far East Asian economies, hospital property structure is predominantly privately owned (1).The authors would like to hereby express gratitude to Grant No.175014 of the Ministry of Education, Science and Technological Development of the Republic of Serbia, out of which some underlying studies were partially financed. Publication of results was not contingent on Ministry’s censorship or approval.info:eu-repo/semantics/publishedVersio

Antibiotic Resistance in Syria: A Local Problem Turns Into a Global Threat

Pharmaceutical sector of Syrian Arab Republic before the war was characterized by bold and successful development since the late 1980s. With the beginning of war in the country back in March 2011, momentum has changed significantly. Traumatism, communicable diseases related to morbidity and mortality as well as wound infections became particularly hot public health concern. This relates not only to the direct victims of military conflict but also to the displaced civilians, refugees, and ordinary citizens alike. Evolving legislative framework in Syria since 1980s tolerated dispensing of antibiotics without appropriate prescription. Such practice led to spreading of antibiotic resistance among the local bacteria frequently causing both community-acquired and nosocomial infections. Laboratory findings of resistant bacteria strains among the Syrian refugees in some European countries serve as evidence of concern spreading far beyond Middle East. Practice of self-diagnosis and self-medication with antibiotics by patients themselves and restraint to pharmacist advice is widespread. A number of recommendations is presented to stakeholders to compact antibiotic resistance after the peace is established in the country. The successful implementation of such recommendations is the way to preserve shrinking golden reserve of highly potent antibiotics as it is the last defense line against resistant bacterial strains causing severe life—threatening infections

Accruals quality vis-a-vis disclosure quality: Substitutes or complements?

The impact of accruals quality and disclosure quality on stock returns is a topical issue in market-based accounting research. Most of the debate is centred on their incremental ability to predict future earnings. Recent studies suggest that higher information risk proxied by either lower accruals quality or lower disclosure quality results in higher stock returns. This paper examines the relationship between accruals quality and disclosure quality, and investigates whether they are complements or substitutes in explaining the time-series variation in portfolio returns. Applying portfolio groupings, we find a positive association between accruals quality and disclosure quality, suggesting that firms with higher disclosure quality engage less in earnings management and have higher accruals quality. Asset pricing tests show that an accruals quality factor and a disclosure quality factor explain the time-series variation in the excess returns of similar sets of portfolios. This suggests that they contain similar information and confirms the substitutive nature of accruals quality and disclosure quality factors

Fama and French factors : their definition in the UK and their relationship with macroeconomic variables

This study explores the magnitude of size and value premium in the UK using the various methods of estimating SMB and HML used in the past on UK data. I identify nine distinct methods that previous researchers have used to estimate the factors. I then estimate them, following as closely as possible the descriptions given in the relevant papers, on data from July 1980 to April 2003. I find that the method used to construct the size and value premium affects their magnitude and significance. I, then, use a variety of asset-pricing tests to examine whether the estimated factors capture risk effects and, combined with the market factor, explain returns for sets of portfolios. Consistent with the US evidence, I show that the Fama and French model outperforms the CAPM model in the UK: Moreover, I find that the HML is the dominant risk factor in the UK while the 5MB is generally insignificant. Next, I consider the macroeconomic story for the size and BM effects. My purpose is to clarify the extent to which Fama-French factors contain information about the macroeconomy. I find that three out of four sets of Fama-French factors - that come with positive and significant risk premium on HML from the cross-sectional regressions support the U.S. evidence that HML contains default-related information, consistent with Vassalou and Xing (2004). However, only one set of factors shows that shocks to IP growth is a significant risk factor but contains different information from the HML factor, in contrast to the Vassalou (2003) and Liew and Vassalou (2000) findings for the U.S. Further, I compare the pricing performance of four asset pricing models with respect to their abilities to explain the cross-sectional variation in different sets of portfolios' excess returns. I find that the Fama-French model explains the cross-section of average returns on portfolios sorted on size and BM ratio better than both the Vassalou model and the Macroeconomic model for the 16 intersected size and BM portfolios and for the set of 36 combined portfolios. However, the result is mixed regarding the 20 industry portfolios. I conclude that given the absence of 'industry standards' for 5MB and HML construction in the UK and my findings of a real difference between the outcomes of applying different sets of factors, caution needs to be taken when adopting just one of the combinations of Fama-French factors and then drawing inferences accordingly. Moreover, I stress the need for more research to uncover the full information content of Fama-French factors.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

Entrepreneurship in crisis: the determinants of syrian students’ entrepreneurial intentions

This study aims at investigating the factors that affect the entrepreneurial intentions of university students in Syria. The impact of three groups of factors was investigated, demographic, personal, and external factors. The questionnaire survey method was applied. Data was collected from two major universities in Syria: Damascus University and Arab International University and two faculties: Business and Economics, and Informatics and Communication Engineering. We analyze 183 responses from the above-mentioned faculties to understand whether differences exist in entrepreneurial intentions between students from different universities and faculties. Also, we use ordinary least squares to uncover the determinants of entrepreneurial intentions for those students. The results show higher entrepreneurial intentions for Informatics and Communication Engineering and for male students. Moreover, self-efficacy, information and communication, institutional environment come to have positive and significant impacts on entrepreneurial intentions. We recommend that more polices should be directed towards developing female entrepreneurial intents. Also, entrepreneurship training courses should be offered to Informatics and Communication Engineering to enable them turn their intentions into projects. Furthermore, universities should consider establishing entrepreneurship centers, incubators and science parks that foster innovative ideas and support start-ups

Industry concentration, stock returns and asset pricing: The UK evidence

How does competition in firms’ product markets influence stock returns? We examine this question using firms domiciled in the UK. We find that firms in less concentrated industries earn higher returns, even after controlling for the well-known determinants of the cross-section of UK stock returns. Furthermore, we suggest a novel asset pricing model that explicitly incorporates industry concentration as a distinguished risk factor capturing important features of product markets. Our results link the explanatory power of R&D activity of stock returns to product market structure. Also, we suggest an explanation for value premium on the basis of product market structure that favours barriers to entry interpretation for the higher returns obtained by less concentrated industries