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Article
Publication date: 19 September 2019

Adam Y.C. Lei, Huihua Li and Jin Yu

The purpose of this paper is to examine the dividend payments and share repurchases of dual-class firms that have both their superior voting shares and inferior voting shares…

345

Abstract

Purpose

The purpose of this paper is to examine the dividend payments and share repurchases of dual-class firms that have both their superior voting shares and inferior voting shares publicly traded.

Design/methodology/approach

This paper uses matched dual-class and single-class samples from 1994 to 2015 and logit models to evaluate the likelihoods of dividend payment and share repurchase between dual-class firms and single-class firms.

Findings

The results show that dual-class firms are more likely than the matched sample of single-class firms to pay dividends in both share classes. Dual-class firms, however, are more likely to repurchase their superior shares than single-class firms and their inferior shares.

Research limitations/implications

The results suggest that dual-class firms do not use corporate payouts to either mitigate agency problems or maintain the private benefits of control. Instead, dual-class firms use dividend payments to mitigate agency problems while using repurchases of superior shares to maintain the private benefits of control, which supports the agency payout hypothesis.

Practical implications

This paper highlights the differences between dividend payments and share repurchases as forms of corporate payouts and suggests that firms may choose a particular form for a particular purpose.

Originality/value

This paper provides the first piece of empirical evidence on the corporate payouts of dual-class firms separating their superior voting shares and inferior voting shares.

Details

Managerial Finance, vol. 45 no. 12
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 13 June 2016

Adam Y.C. Lei and Huihua Li

The purpose of this paper is to test the hypothesis that relative to a cash acquisition, a stock acquisition would increase the bidder’s investor base and lower Merton’s (1987…

811

Abstract

Purpose

The purpose of this paper is to test the hypothesis that relative to a cash acquisition, a stock acquisition would increase the bidder’s investor base and lower Merton’s (1987) shadow cost, which in turn contributes positively to the bidder announcement return.

Design/methodology/approach

Using the number of registered shareholders and measures of institutional ownership as the proxies for investor base and investor recognition, this paper compares their changes and the changes in shadow cost between bidders using different methods of payment. The authors examine the relation between the shadow cost reduction and bidder announcement return in a multivariate framework.

Findings

This paper finds that given the target type, bidders using stocks experience significantly larger increases in their investor bases and investor recognition than bidders using cash. Additionally, only bidders using stocks experience significant decreases in their shadow costs. In a multivariate framework, the change in the shadow cost has a negative and significant effect on the bidder announcement return in the sample of stock acquisitions and the subsample of bidders using stocks to acquire private targets. These findings support the authors’ hypothesis and suggest that the less established bidders acquiring private targets in particular benefit from the shadow cost reduction.

Originality/value

This paper provides the direct evidence that investor recognition matters in mergers and acquisitions. The findings also provide a complementary explanation for the documented positive bidder returns when bidders use stocks to acquire private targets.

Details

Managerial Finance, vol. 42 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 13 January 2012

Adam Y.C. Lei and Huihua Li

The purpose of this paper is to examine the order strategies of investors, in particular their use of intermarket sweep orders (ISOs), in response to a short‐lived information…

256

Abstract

Purpose

The purpose of this paper is to examine the order strategies of investors, in particular their use of intermarket sweep orders (ISOs), in response to a short‐lived information event.

Design/methodology/approach

This paper uses a natural experiment on September 8, 2008, in which a 2002 bankruptcy story of United Airlines erroneously reappears through Bloomberg terminals and cause significant price changes on the stock. The authors first provide the background information of this natural experiment and use bootstrapping methods and regression analyses to examine investors' use of intermarket sweep orders.

Findings

The results show that investors use intermarket sweep orders, a unique type of liquidity‐demanding limit orders, in attempts to exploit their short‐lived information. In particular, those investors show aggressiveness not only in trade speed but also in trade size. These findings support the hypothesis that investors with short‐lived information demand immediacy to conserve the value of their information.

Research limitations/implications

The results suggest that investors on the demand side of liquidity dynamically trade off the potential adverse impact of trade‐throughs with the speed their trades are executed. How limit order traders on the supply side or liquidity suppliers in general adjust to the demand‐side dynamics remains a future research direction.

Practical implications

This paper highlights the fragility of information transmission in financial markets and suggests that the use of intermarket sweep orders could possibly magnify the impacts of erroneous information.

Originality/value

Using a natural experiment, this paper provides the first piece of empirical evidence on the use of intermarket sweep orders when investors possess short‐lived information.

Details

Managerial Finance, vol. 38 no. 2
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 23 August 2013

Adam Y.C. Lei and Huihua Li

The purpose of this paper is to determine whether information produced in the takeover process or changes in firm characteristics after takeovers affect bidder liquidity.

392

Abstract

Purpose

The purpose of this paper is to determine whether information produced in the takeover process or changes in firm characteristics after takeovers affect bidder liquidity.

Design/methodology/approach

This paper compares the liquidity changes for bidders that complete their takeovers (successful bidders) and bidders that eventually withdraw their takeover attempts (unsuccessful bidders) to disentangle the information production hypothesis and the firm characteristics hypothesis. The authors use both media mentions and changes in the standard deviation of market model residuals to proxy for the information produced in the takeover process, intraday data to construct the liquidity measures, and regression analyses to examine the determinants of bidder liquidity changes.

Findings

This paper finds that unsuccessful bidders experience no less information production than successful bidders during the takeover process, but only successful bidders enjoy liquidity improvements. Once the authors control for the changes in firm characteristics, whether a takeover is successful or not no longer affects bidder liquidity. Moreover, information production reduces information asymmetry for successful Nasdaq bidders but not NYSE bidders. These findings collectively support the firm characteristics hypothesis but also suggest a role of information production on firms with higher information asymmetry.

Originality/value

This paper provides the direct evidence that the information produced in the takeover process does not lead to liquidity improvements of the bidders. It also supplements existing literature with a more comprehensive sample and sheds light on how acquisition withdrawals affect firms' liquidity.

Details

Managerial Finance, vol. 39 no. 10
Type: Research Article
ISSN: 0307-4358

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Available. Content available
Book part
Publication date: 24 June 2024

Noel Scott, Brent Moyle, Ana Cláudia Campos, Liubov Skavronskaya and Biqiang Liu

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Abstract

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Cognitive Psychology and Tourism
Type: Book
ISBN: 978-1-80262-579-0

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Book part
Publication date: 8 November 2021

Siddhartha Chattopadhyay

Sufficiently persistent rise in nominal interest increases inflation rate in short-run. This short-run comovement of nominal interest rate and inflation rate is known as…

Abstract

Sufficiently persistent rise in nominal interest increases inflation rate in short-run. This short-run comovement of nominal interest rate and inflation rate is known as Neo-Fisherianism. This chapter proposes a policy based on Neo-Fisherianism to escape Zero Lower Bound (ZLB) using a textbook Forward Looking New Keynesian Model. I have shown that proposed policy with properly chosen inflation target and persistence can stimulate economy and escape ZLB by raising nominal interest rate. I have also shown that the proposed policy is robust to varying degrees of price stickiness.

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Environmental, Social, and Governance Perspectives on Economic Development in Asia
Type: Book
ISBN: 978-1-80117-594-4

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Article
Publication date: 1 June 2005

Li‐teh Sun

Man has been seeking an ideal existence for a very long time. In this existence, justice, love, and peace are no longer words, but actual experiences. How ever, with the American…

824

Abstract

Man has been seeking an ideal existence for a very long time. In this existence, justice, love, and peace are no longer words, but actual experiences. How ever, with the American preemptive invasion and occupation of Afghanistan and Iraq and the subsequent prisoner abuse, such an existence seems to be farther and farther away from reality. The purpose of this work is to stop this dangerous trend by promoting justice, love, and peace through a change of the paradigm that is inconsistent with justice, love, and peace. The strong paradigm that created the strong nation like the U.S. and the strong man like George W. Bush have been the culprit, rather than the contributor, of the above three universal ideals. Thus, rather than justice, love, and peace, the strong paradigm resulted in in justice, hatred, and violence. In order to remove these three and related evils, what the world needs in the beginning of the third millenium is the weak paradigm. Through the acceptance of the latter paradigm, the golden mean or middle paradigm can be formulated, which is a synergy of the weak and the strong paradigm. In order to understand properly the meaning of these paradigms, however, some digression appears necessary.

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International Journal of Sociology and Social Policy, vol. 25 no. 6/7
Type: Research Article
ISSN: 0144-333X

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Article
Publication date: 9 April 2018

Adam J. Wowak, Michael J. Mannor and Craig Crossland

This paper aims to explore the implications of Aguinis and colleagues’ study, and in particular their claim that the inconsistency between chief executive officer (CEO) pay and…

584

Abstract

Purpose

This paper aims to explore the implications of Aguinis and colleagues’ study, and in particular their claim that the inconsistency between chief executive officer (CEO) pay and CEO performance is reflective of a fundamental injustice. In doing so, the authors highlight issues regarding the meaning of fairness in the context of CEO pay, the extent to which CEOs can personally affect firm performance and the challenges in ascertaining whether CEOs are overpaid, underpaid or appropriately paid.

Design/methodology/approach

The authors use a conceptual approach, integrating research on executive compensation and managerial discretion to lend nuance to Aguinis and colleagues’ arguments and findings.

Findings

The main takeaway of the commentary is that CEO pay fairness is a complex and multifaceted matter that can be difficult to broadly characterize. The evidence offered by Aguinis and colleagues regarding power law distributions and the weak overlap between CEO pay and CEO performance is compelling, but questions about income inequality and pay fairness rarely lend themselves to straightforward answers. Some caution is thus warranted when evaluating Aguinis and colleagues’ conclusion that the US CEO labor market is pervasively unfair.

Originality/value

The authors urge scholars who build on the work of Aguinis and colleagues to pay heed to the challenges in reconciling the twin concepts of CEO pay and CEO performance.

Objetivo – Este comentario explora las implicaciones del estudio de Aguinis y colegas, y en particular su afirmación de que la inconsistencia entre la retribución del CEO y su rendimiento es el reflejo de una injusticia fundamental. Se señalan aspectos relativos al significado de justicia en el contexto de la retribución del CEO, a la influencia del CEO sobre el resultado empresarial, y a los retos de aseverar si la retribución de los CEOs es excesiva, insuficiente o justa.

Diseño/metodología/aproximación – Los autores utilizan una aproximación conceptual, integrando investigación en retribución y discrecionalidad de ejecutivos para matizar los argumentos y resultados de Agunis y colegas.

Resultados – La principal conclusión del comentario es que el grado de justicia del pago a CEOs es un tema difícil de caracterizar de forma global. La evidencia ofrecida por Aguinis y colegas en relación a la distribución de ley de poder y la poca superposición entre la retribución y el rendimiento del CEO es fascinante, pero las cuestiones sobre inequidad y justicia de los ingresos y la retribución raramente generan respuestas sencillas. Por tanto es necesaria cierta cautela a la hora de evaluar la conclusión de Aguinis y colegas de que el mercado laboral de CEOs en Estados Unidos es fundamentalmente injusto.

Originalidad/valor – Los autores urgen a los académicos a avanzar sobre el trabajo de Aguinis y colegas y prestar atención al reto de reconciliar los conceptos de retribución del CEO y resultados del CEO.

Objetivo – Este comentário explora as implicações do estudo de Aguinis et al., e em particular a sua afirmação de que a inconsistência entre a remuneração do CEO e seu desempenho é a reflexão de uma injustiça fundamental. Aspectos relacionados com o significado da justiça são apontados no contexto da remuneração do CEO, a influência do CEO sobre o resultado do negócio, e os desafios de afirmar se a remuneração dos CEOs é excessiva, insuficiente ou justa.

Design/metodologia/aproximação – Os autores utilizam uma abordagem conceitual, integrando a pesquisa na remuneração e discrição dos executivos para clarificar os argumentos e os resultados de Agunis et al.

Resultados – A principal conclusão do comentário é que o grau de equidade do pagamento aos CEOs é um assunto difícil de caracterizar de forma global. A evidência oferecida por Aguinis et al. em relação à distribuição da lei de poder e a pequena sobreposição entre a remuneração e o desempenho do CEO é fascinante, mas as questões de desigualdade e justiça de renda e retribuição raramente geram respostas simples. Portanto, é necessária alguma cautela ao avaliar a conclusão de Aguinis et al. que o mercado de trabalho dos CEOs nos Estados Unidos é fundamentalmente injusto.

Originalidade/valor – Os autores instam aos investigadores a avançar sobre o trabalho de Aguinis et al. e prestar atenção ao desafio de conciliar os conceitos de remuneração do CEO e os seus respectivos resultados.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 16 no. 1
Type: Research Article
ISSN: 1536-5433

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Book part
Publication date: 3 February 2025

Chandrima Chakraborty and Dipyaman Pal

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Performance Analysis of the Indian Pharmaceutical Industry: A Global Outlook
Type: Book
ISBN: 978-1-83797-743-7

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Book part
Publication date: 11 June 2021

Forough Nasirpouri Shadbad and David Biros

Since the emergence of the Internet in the twentieth century and the rapid growth of different types of information technologies (IT), our lives, either personal or professional…

Abstract

Since the emergence of the Internet in the twentieth century and the rapid growth of different types of information technologies (IT), our lives, either personal or professional, have become digitised. Adoption and diffusion of IT enhance individuals and organisational performance, yet scholars discovered a dual nature of IT in which IT usage may have negative aspects too. First, the inability to cope with IT in a healthy manner creates stress in users, termed technostress. Second, digitisation and adoption of new technologies (e.g. IoT and multi-cloud environments) have increased vulnerabilities to information security (InfoSec) threats. Although organisations utilise counteraction strategies (e.g., security systems, security policies), end-users remain the top source of security incidents. Existing behavioural research has approached technostress and InfoSec independently. However, it is not clear how technology-stressors influence employees’ security-related behaviours. This chapter reviews the interaction effect of these concepts in detail by proposing a conceptual model that explains that technostress is the main reason for employees’ non-compliance with security policies in which users with high-level perceptions of technostress are more likely to violate InfoSec policies. Counteraction strategies to mitigate technostress and security threats are also discussed.

Details

Information Technology in Organisations and Societies: Multidisciplinary Perspectives from AI to Technostress
Type: Book
ISBN: 978-1-83909-812-3

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