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This study identified four performance measures often employed in corporate analysis and examined their relationship with the firm's expenditures in research and development over different periods. These measures reflect both the profitability of the firm and the market value of the firm's total capitalization. This inquiry is motivated by numerous attempts made in the literature to define an ideal measure of corporate financial performance. Repeated surveys and several financial studies [Mechlin and Berg (1980), Watts (1986), Dubofsky and Varadarajan (1987), and Obi (1994)] have revealed that in spite of their empirical shortcomings, the most frequently employed measures are those based on the firm's profitability, essentially, return on equity (ROE), profit margin on sales and return on total capitalization. These measures are handicapped by the fact that they reflect only the historical pattern of the accounting data generating them. In this study, we contend that a reliable measure of performance should reflect the market's perception of the riskiness and timing of the expected returns on the firm's current investments.

This article reviews the empirical accuracy of various alternatives for size used in measuring corporate performance. The primary focus is to expose inherent weaknesses in usefully interpreting these size factors. The empirical performance of a number of size alternatives which are frequently used in the management literature is then analysed. Consistent with explanations offered by Coffman (1983) and in most other financial studies, the market value of equity is identified as the most robust single measure of corporate size. However, measures of size that are based on total capitalisation and sales performance, appear to provide increasing explanatory power.

The investments industry is made up of two major groups of security analysts: fundamentalists and technicians. Fundamentalists make investment decisions by analysing a company's “fundamentals,” which are risk and performance factors specific to that firm. Technicians, on the other hand, believe that patterns in historical price and volume data for a stock can be used to make profitable trading decisions. In keeping with the latter approach, DeBondt and Thaler (1985, 1987) find evidence of price reversals in three‐year stock returns. Specifically, they determine that stock prices overreact to information, suggesting that a contrarian strategy of buying stocks that performed poorly in the past (i.e. losers) and selling stocks that performed well in the past (i.e. winners), produces significant abnormal returns. Additional support to this “overreaction phenomenon” is documented by Chan (1988), Lo and MacKinlay (1990), and Zarowin (1990).

This study provides evidence regarding the performance of bank holding companies (BHC) following a series of deregulatory measures by the United States Congress. To compare performance of commercial banks before and after expanding their operations to nonbank functions, a set of hypotheses addressing BHC risk and return characteristics are proposed. Empirical results are mixed. Total risk dropped after expansion. Market risk, on the other hand, rose substantially in post‐expansion time. When returns are adjusted for risk, a marginal improvement in performance is achieved.

This study aims to examine the effect of financial inclusion (FI) and financial openness (FO) on the development of capital markets in Africa.

The study uses data from 34 countries over 18 years (2004–2021) and adopts the panel autoregressive distributed lag and pooled mean group approach, with economic growth, trade openness, government expenditure and institutional quality as control variables.

The analysis reveals that both FI and FO contribute to the long-term development of capital markets across all income levels within the sampled countries. The interaction between FI and FO enhances capital market development (CMD) over the long run. This finding indicates that FO particularly enhances the development of capital markets in economies with comparatively lower levels of FI.

The findings of this research underscore the importance for policymakers and professionals to adopt guidelines and regulations that promote FI and openness. Such measures can bolster the development of strong financial systems by improving access to the formal financial sector, and by contributing to the growth of capital markets.

The study is robust to the use of a multidimensional financial and CMD index. It is one of the pioneering studies that explore the relationship between FI and FO, and how this interaction influences CMD.

This study aims to examine whether interest rate regulations affect stock returns in a developing market.

This study analyses the impact of interest rate regulation on Kenyan banks using the event methodology and a difference-in-difference approach. It examines the market reaction and bank valuation effects from 2004 to 2022, focusing on the rate cap’s introduction in August 2016 and its repeal in November 2019. Cumulative abnormal returns are calculated for four sub-periods within a five-day window around these events using data from 11 banks and 300 days.

Contrary to expectations, this study finds that the announcement of interest rate controls results in negative and statistically significant cumulative abnormal returns. However, the difference-in-differences analysis shows that these regulatory changes had an insignificant long-term impact on market valuations beyond the event period.

This study shows how interest rate regulations affect stock returns, guiding investors in managing wealth and market efficiency in developing economies.

This study investigates market reactions and bank valuations in response to interest rate regulations within a developing economy. It focuses on the introduction of rate caps, their subsequent repeals and a shift to risk-based lending. Using a combination of event study methodology and difference-in-difference analysis offers a novel methodological contribution compared to prior research.

This study aims to determine the impact of interest rate regulation on bank lending behaviour. The application of interest rate caps as a financial repression and regulatory measure has sparked debate for decades. This study contributes to the ongoing debate on the consequences of rate caps on banks’ lending behaviour in Kenya.

This study uses both fixed effects and two-step generalised method of moments techniques to establish the effects of interest rate caps on credit allocation across three sectors of the economy: government, private and interbank lending. To achieve this, the authors used data drawn from 35 licenced commercial banks in Kenya from 2004 to 2021.

The results, which are robust to endogeneity and other diagnostic checks, reveal shifts in lending behaviour by banks towards the government, and less to the private sector and interbank lending in rate cap periods. This study finds that rate caps have a significant and positive impact on bank lending to the government. This significant positive impact appears subdued for private and interbank lending.

From a policy perspective, the findings highlight that interest rate caps do not benefit the private sector. An important implication of this study is that such policies may have unintended consequences of hindering growth in a broader economy. This study has the potential to inform policymakers and the banking industry in East Africa about the effects of interest rate regulation. High lending interest rates have seen some countries, such as Kenya, imposing interest rate caps and subsequently repealing them. Other countries, such as Uganda, were in the process of considering rate caps but have deferred the decision.

This study contributes to the ongoing debate regarding the implications of interest rate controls in developing economies. The study uses robust estimation approaches to argue its case for a separate examination of rate controls in a single-country setting owing to the unique institutional and contextual realities inherent in every jurisdiction.

The purpose of the current paper is to examine the nature of profit persistence and to estimate the dynamic relationship between research and development (R&D) intensity and firm profitability in the Indian pharmaceutical industry.

A dynamic panel data model with generalized methods of moments (GMMs) technique has been deployed to estimate the relationship between R&D intensity and performance. Arellano and Bond (1991) estimation methodology has been used to generate the estimates. A sample of 55 publicly listed firms operating in the Indian pharmaceutical industry for the period 2005-2014 has been considered.

The study finds moderate to heavy profit persistence in the Indian pharmaceutical industry. The study also finds that there exists a positive relationship between R&D intensity and performance for the Indian pharmaceutical Industry. The results hold even after considering two separate measures of profitability – return on assets and return on sales. The results also hint at a possible non-linear relationship between R&D intensity and profitability.

The results highlight positive profit persistence among pharmaceutical firms. The results also highlight the need for a sustained investment in R&D, as its benefits are driven in the long run. Thus, managers should devise proper policies R&D investments. Also, prospective entrants should properly study the existing entry barriers before deciding upon the mode and timing of entry.

The degree of profit persistence and the dynamic nature of relationship between R&D intensity and firm performance in the Indian pharmaceutical sector has not been studied. Thus, this paper fills this gap and also highlights the impact of certain firm- and industry-specific variables on profitability.

This study aims to evaluate the market risk exposure of three international equity portfolios using value‐at‐risk (VaR). This risk metric calculates the worst case loss for a business in the course of its daily transactions. To ensure that the calculated VaR reflects emerging risk characteristics, this paper introduces an approach that incorporates time‐varying volatility.

This study uses the GARCH technique to calculate the volatility metric with which VaR estimates are obtained. The out‐of‐sample performance of the VaRs is then assessed by comparing them to the actual market risk losses in that period.

Empirical results show that regardless of market conditions, the VaR calculated with this (GARCH) approach is more robust and more reliable than the traditional methods. Pursuant to the banking regulation on market risk capital stipulated by the Basel Committee on Banking Supervision, the out‐of‐sample VaRs are at least equal to actual daily market risk losses at the 99 percent confidence level.

The key goal of banking regulation is to ensure that financial firms have sufficient capital for the types of risks they take. Determining the right amount of capital requires these firms to first estimate their worst case loss, which is the value‐at‐risk. The approach to the calculation of VaR introduced in this paper enhances the accuracy in the measurement of market risk capital for financial institutions.

This paper recognizes that for VaR to fully account for market risk losses, the risk metric must be correctly measured. The unparalleled approach in this paper of incorporating time‐varying volatility in VaR calculations offers banking institutions a more reliable means of determining their capital adequacy.

Explores the issue of global licensing of technological advancement. Deals particularly with the legal side of things, minimizing risk in particular. Indicates that the fastest and best way of penetrating foreign markets is to use a local branch already established in the foreign market, or, alternatively, establish a subsidiary or joint venture. Focuses then on licensing and some of the problems that can arise from that – piracy, exploitation, competition and financial implications if things go wrong. Suggests ways to circumvent this through licensing agreements, patents, trademarks, copyright, technology transfer agreements, and/or national intellectual property laws. Defines a licensing agreement, covering the subject matter of the license, technical assistance provisions, specification of the scope of the license, royalty compensation, quality standards and warranties, infringement of licensed rights, and duration and termination of the agreement. Mentions, also, antitrust considerations and the tax aspects of licensing. Recommends this approach as it spells out terms and conditions clearly to all parties, thereby, hopefully, reducing misunderstanding and disputes.