Freshen up before going public: Do environmental, social, and governance factors affect firms' appearance during the initial public offering?

Going public (or initial public offering IPO) is a corporate strategic decision for value enhancement. Underpricing is a phenomenon related to going public and has been studied from a purely financial perspective. In this paper, we investigate whether underpricing incorporates sustainability performance pre-IPO by establishing an original linkage between underpricing and ESG factors before the firm's listing on stock markets. Using informational asymmetries and quality signaling frameworks, we track the journey of going public by Italian Small Medium Enterprises (SMEs) from 2009 to 2017 and show how sustainability issues are incorporated into the IPO underpricing. We demonstrate that underpricing is strongly related to financial and sustainability variables only in the year just before the IPO, indicating better informational efficiency, quality signaling, and image-improving practice. The post-IPO stock return is less correlated with the firm's financial and ESG variables, suggesting that markets can incorporate such information into stock returns in the long run. This paper provides novel insights by delivering an original linkage between a firm's public listing attributes and sustainability performance, offering a temporal tracking of the SMEs before and after the IPO, emphasizing the role of sustainability in the IPO process

Does it Make You Better Off? Initial Public Offerings (IPOs) and Corporate Sustainability Performance: Empirical Evidence

Going public (or an IPO) is a strategic decision for value creation motivated by various reasons such as capital raising, windows of opportunities that reflect the perfect market timing and publicity. It is associated with financial and business attributes. In this article, we establish an original linkage between the IPO event and sustainability performance post-IPO, emphasizing the impacts of listing on enhancing sustainability performance. We integrate IPO theories and sustainability views in explaining the effect of the IPO on sustainability measures. We study a sample of Italian firms that went public from 2009 to 2018. Sustainability performance is measured by a sustainability rating which is a composite rating that comprises of 10 elements. Using empirical testing, we show a positive effect of the IPO on sustainability and governance indicators in the 3 years following the IPO, suggesting an image-improving and better compliance practices. And a mixed impact on financial performance

Forecasting The Italian Day-Ahead Electricity Price Using Bootstrap Aggregation Method

Electricity price forecasting has become a crucial element for both private and public decision-making. This importance has been growing since the wave of deregulation and liberalization of the energy sector on a global scale since the late 1990s. Given these facts, this paper is an attempt to establish and demonstrate a precision based applicable forecasting model for wholesale electricity prices with respect to the Italian power market on an hourly basis. Artificial intelligence models such as neural networks and bagged regression trees are utilized, although they are rarely used to forecast electricity prices. After model calibration, bagged regression trees with exogenous variables comprised the final model. The selected model outperformed neural network and bagged regression with a single price used in this paper, it also outperformed other statistical and non-statistical models used in other studies. We also confirm certain theoretical specifications of the model. As a policy tool, this model could be used by energy traders, transmission system operators and energy regulators for an enhanced decision-making process

A need for assurance: Do internal control systems integrate environmental, social, and governance factors?

In the article, we provide an original linkage between the corporate environmental, social, and governance (ESG) rating and the cost of internal control system (ICSC) stemmed from two closely related frameworks: the 2017 CoSO Framework, which calls to strengthen internal control systems to integrate ESG issues, and the EU directive on nonfinancial reporting (2014/95/EU) that entered into force in 2017. Thus, we evaluate both introductions showing ESG integration in the internal control activities. We cover firms listed on Milan Exchange from 2016 to 2019, providing a thorough analysis with robustness tests. The findings imply that firms should consider both ESG rating and the internal control system cost as strategic corporate tools for value enhancement; therefore, companies should allocate the resources appropriately to internal control activities to incorporate ESG issues and create value since internal control provides the first assurance for ESG integration. The limitations of this study pave the way for further research directions; incorporating the new amendment of the EU directive on nonfinancial disclosure, allowing for a better valuation creation assessment; and whether there is a substitution between sustainability performance and other corporate issues such as taxes and marketing expenditure

Capital structure in family firms: the role of innovation activity and institutional investors

Purpose– There is still an ongoing debate on the value relevance of capital structure and its determinants. Recently the issue has been explored in family firms after being explored in mature firms. This paper investigates the role of institutional investors and the firm’s innovation activity in influencing the firm’s decision and ability to acquire debt capital. Design/methodology/approach– A large sample of 700 privately-held family firms in Italy from 2010 to 2019. Twoanalysis techniques are used: panel analysis and path analysis. The value of debt and the debt ratio are usedasleveragemeasures.Thevalueofpatent(asaproxyforinnovation)andinstitutionalinvestorarethe explanatory variables. Findings–Theresultsshowthatinstitutionalinvestorshavenorelationshipwithfinancialleveragemeasures except when controlling for an interaction variable (Institutional investors 3 Lombardy region). The patent value is positively correlated with debt; however, the ratio patent-to-asset is negatively related to financial leverage indicating higher risk exposure. The nonlinearity test demonstrates a turning point when the relationship between patent value and debt inverts. Practical implications– Firms should monitor their innovation activity since excessive innovation increases risk exposure and affects financing opportunities and value. The involvement of institutional investors does not always enhance value. Originality/value– Existing literature focuses separately on family firm innovations and financial leverage as outcome variables, emphasizing the role of institutional investors in both fields by adopting agency theory and socioemotional wealth framework. In this study, the authors go further by merging both relationships, investigating the dynamics of the institutional-family firm innovation relationship in influencing the firm’s capital structure. The authors contribute to the ongoing debate by providing original findings on capital structure, governance and innovation, supported by rigorous methods to enhance family firms’ decisionmaking

Revisiting Overconfidence In Investment Decision-Making: Further Evidence From The U.S. Market

nvestor overconfidence leads to excessive trading due to positive returns, causing inefficiencies in stock markets. Using a novel methodology, we build on the previous literature by investigating the existence of overconfidence by studying the causal relationship between return and trading volume covering the COVID-19 period. We implement a nonlinear approach to Granger causality based on multilayer feedforward neural networks on daily returns and trading volumes from 2016 to 2021, covering 1424 daily observations of the S&P 500 index. The results provide evidence of overconfidence among investors. Such behavior may be linked to the increase in the number of investors. However, there is a decline in the rate of returns during the study period, implying uncertainty caused by the COVID-19 pandemic

GENERE E PERFORMANCE DELLE SOCIETÀ QUOTATE ITALIANE

L’Italia dal punto di vista normativo, è uno dei paesi più avanzati d’Europa in tema di parità ma nonostante ciò l’occupazione femminile continua ad essere al di sotto della media europea e le relative retribuzioni fra le più basse a livello internazionale. Le prime norme in Italia a tutela della parità di genere risalgono agli anni Quaranta e precisamente nel 1945 quando il d.l. n. 23 riconosce il diritto di voto alle donne italiane e nel 1947 allorquando l’introduzione della costituzione italiana all’art. 3 ha statuito che «tutti i cittadini hanno pari dignità sociale e sono eguali davanti alla legge, senza distinzione di sesso»

Bitcoin volatility and the introduction of bitcoin futures: A portfolio construction approach

We evaluate the introduction of Bitcoin futures on Bitcoin return and volatility using realized volatility and GARCH model pre-and post-futures. We also assess the portfolio construction implications by building two portfolios containing the top 25 S&P stocks, one without futures and one with. GARCH and realized volatility show mixed results. We provide that futures make Bitcoin riskier and more vulnerable to fluctuations over time. However, Bitcoin futures improve the portfolio's volatility and returns profile. Our findings offer implications regarding portfolio strategies implemented by risk-averse and risk-seeking investors and managers as we show how Bitcoin futures can hedge investments

Initial Public Offerings, Underpricing and Performance: the case of Top International Brands

The present study aims at investigating the relationship between Initial Public Offerings (IPOs) variables mainly underpricing on one hand, and the brand value measures on the other. Our final data set is 104 international brand companies. We implement an empirical approach using hierarchical OLS regression and descriptive statistics. We show that underpricing is positively related to brand value, which emphasizes the marketing role of going public and underpricing in enhancing brand equity through the product market, which additionally confirms some information asymmetry models. We also find that on average brand companies have not been recognized as brands at the IPO time. Moreover, we show the positive role of private equity in enhancing brand value, additionally, the non-linear association between underpricing and brand value is not evident. Finally, we draw some policy implications and suggestions for future research