Search results

This paper investigates the short-term market impact of the beginning of the military conflict between Russia and Ukraine (February 24, 2022) on a set of airline stocks listed.

This study uses an event study methodology, cross-section analyses and interaction effects to study the effect of the war on airline stock prices and firm-specific characteristics that explain the cumulative abnormal return.

The authors observe a negative and statistically significant stock price reaction at and around the beginning of the military conflict between Russia and Ukraine, for 74 listed airlines. These results are consistent with investment portfolio rebalancing and asset pricing perspective. Moreover, this study's results show a higher negative stock market reaction for airlines based in Europe. Empirical evidence suggests the existence of a “proximity penalty” for European companies. Finally, this study's results provide insights into which airline-specific characteristics emerge as value drivers. Larger, well-capitalized (high liquidity and low debt) and profitable airlines firms with less institutional ownership have superior stock market returns and show more able to handle with the losses resulting from the war.

This paper fills a gap in the literature about the impact of the Russia–Ukraine war on the airline industry.

This study explores whether the unique organizational form of family firms helps to mitigate the negative effects caused by the announcement of product recalls.

The authors use an event study, for a sample of 2,576 product recalls in the United States (US) automobile industry, between January 2010 and June 2021.

The authors found that stock market's reaction to a product recall announcement is less negative for family firms. This superior performance is partially driven by the family firms' long-term investment horizons and higher strategic emphasis on product quality. However, the relationship between family ownership and cumulative abnormal returns around product recall announcements is nonlinear as the impact of family ownership starts by being positive but becomes negative for higher levels of family ownership. The authors also find that family firm's chief executive officer (CEO) and managerial ownership influence positively the stock market reaction to product recall announcements.

This work has several implications for family firms' management as well as for investors and financial analysts. First, as higher managerial ownership is associated with a greater emphasis on product quality, decreasing stock market losses when a product recall occurs, family firms should consider increasing equity-based compensation. Second, as there seems to exist an optimal proportion of family ownership, family firms should consider the risks of increasing too much their ownership share. Third, investors and financial analysts can use the results in the study to help them in their investment and trading decisions in the stock market.

The authors extend the knowledge of product recalls by studying the under-researched role of the flexible, internally focused culture of family businesses on the stock market reaction to product recalls.

This paper aims to examine the short-term market reaction for the world’s 100 largest listed defence firms at and around the three recent largest threats to the global economy – Ukraine–Russia war, Fourth Taiwan Strait Crisis and the Hamas terrorist attack on Israel.

The author examine the impact of the three recent largest threats to the global economy in the largest listed defence firms using an event study methodology.

The results show a positive and statistically significant short-term reaction around the three geopolitical threats. The results also reveal the existence of higher abnormal returns for defence firms with greater weight of defence sales, in line with the captured regulator theory and for firms with higher research and development and capital expenditure intensity.

The effect of the war on stock markets has been relatively little examined in the financial theory. This study intends to fill this gap in the literature through the analysis of the three recent largest threats to the global economy.

This paper aims to examine the short-term market impact of the beginning of the military conflict between Russia and Ukraine (24 February 2022), the world’s largest oil and gas companies.

The authors examine the world’s 100 largest listed oil and gas companies at and around the beginning of the military conflict between Russia and Ukraine using an event study methodology.

The authors observe a positive and statistically significant stock price reaction at and around the military conflict. These results are consistent with the asset pricing perspective. Conversely, the stock market returns of Russian oil and gas companies, as well as those companies that were “forced” to divest in Russia due to corporate activism, exhibit a negative and statistically significant impact from the conflict. These reactions are reinforced or mitigated by company-specific characteristics such as size, profitability and institutional ownership. Finally, the findings indicate that companies engaged in oil and gas exploration and production report abnormally higher returns compared to firms in the other two subsectors of the industry.

The effect of the war on stock markets has been relatively little examined in the financial theory. This study intends to fill this gap in the literature.

The purpose of this study investigates the short-term market reaction of three commodity futures indices for four recent events of high geopolitical risk: the Ukraine–Russia war, the Taiwan Strait crisis and the Hamas terrorist attack on Israel.

The author examines three commodity futures indices at and around the beginning of four recent events of high geopolitical risk using an event study methodology.

The results show a positive abnormal return for the commodity futures indices for three of the four recent events considered in the analysis. The exception in terms of abnormal returns observed is the visit of US Speaker of the House Nancy Pelosi to Taiwan on August 2, 2022, which resulted in statistically significant negative abnormal returns in the commodity futures around the visit. The other three geopolitical events, by causing an increase of uncertainty level and supply-side constraints, led to a rise in the price of most commodity futures. This allowed commodity-exporting countries to achieve positive and statistically significant abnormal returns. Policy implications of our findings are discussed.

The effect of high geopolitical risk events on commodity futures indices has been relatively little examined in the financial theory. This study intends to fill this gap in the literature.

This paper aims to highlight the role of the CEO’s background in the stock market reaction to a product recall. Based on the upper echelons theory and the crisis management literature, we argue that the CEO’s background influences the expected response in a product harm crisis and the updating of investors’ expectations following a product recall announcement. We test if the CEO’s background influences the abnormal stock market returns around product recalls and how it affects the way investors interpret the recall strategy and severity.

We use an event study, for a sample of 2,576 product recalls in the US automobile industry, between January 2010 and June 2021.

We observe that the stock market’s reaction is less negative if the firm’s CEO presents a core specialist background and for firms led by insider CEOs. This result is in line with our argument that in the presence of a crisis that requires operational and firm-specific knowledge, such as product recalls, the best alignment in terms of the CEO’s background occurs when the CEO was recruited inside and is a core specialist. Finally, we also find that the CEO’s background has a moderating effect on the impact of the recall strategy and severity on the stock market reaction to a recall announcement. In particular, a recall with high severity has a more negative stock market reaction when the CEO is a core specialist as such an event is not expected by the market.

These results have important implications for practitioners and scholars working in the areas of product quality and corporate governance. Given the high frequency and high costs for firms to carry out these operations in the automobile industry, we recommend a careful analysis of the CEO’s background before their appointment as well as careful planning to prevent and to adequately react appropriately to product quality problems. While there is a common tendency among executives to cut discretionary expenditures such as spending on product safety, our results regarding the stock market reaction to product recall announcements suggest that investors expect firms led by insider and core specialist CEOs to be more likely to ensure product quality and to respond to product quality crisis.

We extend knowledge of product recalls by studying the role of the CEO’s background on the stock market reaction to product recall announcements.

This paper examines the short-term market impact of the beginning of the military conflict between Russia and Ukraine (February 24, 2022) on the world’s largest defense firms.

The authors examine the world’s 100 largest listed defense firms at and around the beginning of the military conflict between Russia and Ukraine using an event-study methodology.

We observe a positive and statistically significant stock price reaction at and around the beginning of the military conflict. These results are consistent with the asset-pricing perspective/expected cash flow hypothesis. Consistent with the captured regulator theory, we find superior market returns for the two portfolios with a greater weight of defense sales. Superior market returns are also found for defense firms with higher R&D and capital expenditure intensity. Finally, these reactions are reinforced or mitigated by other firm-specific characteristics such as size, profitability and institutional ownership.

The effect of the war on stock markets has been relatively little examined in the financial theory. This study intends to fill this gap in the literature.

This paper aims to explore the characteristics of capability exchange within internationalizing small and medium enterprises (SMEs) of the Portuguese metallurgic and metal-mechanic sectors.

Multiple case research instrumentalizes a (manifest) content analysis based upon qualitative data gathered from the interviewing of the strategic apex of four multinational enterprises, codified in the light of the well-known Weber protocol.

The results uncover the existence of a multi-diffusional approach with a bi-directional regime of transferability, where reciprocal transference is non-simultaneous. Operational rigidities are asserted to be stifling the diffusion of capabilities across subsidiaries and hindering higher economies of learning.

The current paradigm of international capabilization of the sector requires substantial enhancements in its design for the benefit of the firm’s international competitiveness, growth and wealth.

Organizational capabilities are a determinant of competitiveness. Hitherto, the phenomena of (capabilities) mobility and transferability are still acknowledged as a clear gap. This study opens, therefore, avenues on international capabilization in relation to the modeling and testing of global dynamic capabilities and its replicability across industries.

Dynamic capabilities yield positive effects to firm-specific advantage formation. Paradoxically, the body of literature on capability diffusion is scarce. The purpose of this study is to focus, thus, on this dearth of literature with an emphasis on exploring the transferability function.

An integrative review of literature on the dynamic capabilities view covers the organizational context determining capability sharing, supported by strategic communication and business networking theories for the fashioning of global capabilities’ administration model (GCAM).

Individual motivations and formal modelling of capabilities’ transference have been overlooked in previous research. Largely with a top-down orientation, the current paradigm of their diffusion is profoundly shaped by the organizational structure and its global governance practices.

The GCAM’s architecture, based on transnational administration and hybrid transferability, opens horizons for multinational companies to develop their own capability management systems and is at the same time a new scholarly avenue in the field.

This study explores an untapped research gap and the formal modelling of a GCAM, while reconciling some of the weaknesses of academic research and industry practices.

This paper continues the analysis of the data collected in a survey of quality function deployment (QFD) carried out in Brazil, and deepens the study by carrying out interviews at some of the companies which participated in the survey to identify best practices on QFD application.

To analyze the data collected in a survey of QFD and interviews, eight exemplary criteria based on the QFD literature were considered. The paper then presents and discusses best practices in QFD application.

The results of analyzing the interviews showed that there were exemplary aspects in the use of the method and the key points in the QFD implementation that should be considered were related to: support from upper management, carrying out training, creating the team, frequency and length of meetings, and creating a conceptual model, among other aspects.

It is important to stress that the importance of some of these exemplary aspects varies with the type of company and the product developed with QFD, and could be less important for other products and industries.

The results showed that there were key points in the QFD implementation that should be considered depending on type of company and the product.

The key points in the QFD implementation identified in this paper may be useful to QFD users and academics.