ERCAN TIRTIROĞLU and DOĞAN TIRTIROĞLU
In an efficient market, where the participants form their expectations rationally, all potential changes induced by a predictable event are incorporated into the asset prices…
Abstract
In an efficient market, where the participants form their expectations rationally, all potential changes induced by a predictable event are incorporated into the asset prices before the uncertainty relating to the outcome of the event is resolved. This paper develops a methodology to test whether temporal prices of fixed income assets reflect market efficiency. The methodology developed employs the Fisher information measure, which is couched within the framework of a moving variance process. We empirically demonstrate the methodology for U.S. Treasury's first exercise, in three decades, of its option to call (on October 09, 1991) one of its outstanding callable bonds. Empirical results indicate a delayed market reaction.
Imants Paeglis and Dogan Tirtiroglu
Some commentators suggest that the Wall Street views family firms with scepticism. The appointment of independent directors to form a majority on a firm's board of directors…
Abstract
Some commentators suggest that the Wall Street views family firms with scepticism. The appointment of independent directors to form a majority on a firm's board of directors should constitute a strong signal to the market of a family firm's willingness to be monitored objectively and thus should alleviate Wall Street's scepticism. This is likely to be more important for the newly public family firms than for mature family firms since outsider-domination on the board pre-dates the involvement of other outsiders, such as underwriters, financial analysts, or institutional investors. Whether the presence of an independent board alleviates the market's scepticism may be evident in the responses of various external monitoring entities to the newly public family and non-family firms. Using a hand-collected sample of newly public firms, we cast brand-new light on whether an independent board provides any advantage to the newly public family firms in underwriter reputation, analyst coverage, and investment by institutional investors over newly public non-family firms. We find that independence of board of directors is overall a positive signal and that while the independence of board is more important than the independence of management for underwriters and financial analysts, the reverse is the case for institutional investors.
The purpose of this study is to examine the association between inward foreign direct investment (FDI) and bank level productivity changes.
Abstract
Purpose
The purpose of this study is to examine the association between inward foreign direct investment (FDI) and bank level productivity changes.
Design/methodology/approach
The paper uses an international sample of 566 publicly quoted commercial banks operating in 75 countries, covering the period 2000‐2004. The empirical analysis is conducted in two stages. First, a non‐parametric Malmquist analysis is employed to decompose total factor productivity (TFP) change of banks into pure efficiency, scale efficiency and technological change. Then, panel regressions are performed to identify the productivity impact of FDI while controlling for relevant bank‐specific and country‐specific characteristics.
Findings
The results indicate that inward FDI has a negative short‐term level effect but a positive long‐term rate effect on TFP change, which is consistent with the evidence from the Malmquist analysis suggesting that banks experience episodes of technical regress and progress.
Originality/value
The paper explores for the first time the link between FDI and bank level total factor productivity, hypothesising that aggregate FDI inflows yield productivity changes in the banking sector as part of the overall environmental effect on the economy, and providing supportive cross‐country evidence.
Details
Keywords
Oguzhan Kazanci, Serdar Ulubeyli and Emrah Dogan
This study aims to present the financial performance of companies and investment areas in the real estate investment trust (REIT) industry.
Abstract
Purpose
This study aims to present the financial performance of companies and investment areas in the real estate investment trust (REIT) industry.
Design/methodology/approach
A fuzzy model for financial performance measurement (FM-FPM) was proposed through the collaboration of fuzzy axiomatic design (FAD) and fuzzy entropy weighting (FEW). For the data, financial ratios were used, and their importance and functional requirements were collected via a questionnaire survey.
Findings
The FM-FPM is a beneficial model to be used for a REIT industry based on the structured procedures of FAD and FEW techniques. It can be suitable to regularly evaluate the performance of REITs and their investment areas in financial means, especially in today’s turbulent business environment. The Turkish market that was considered to show the practical applicability of the FM-FPM demonstrated specifically that diversified real estate was found to rank first, followed by mixed-buildings, warehouses, shopping malls and hotels, respectively.
Research limitations/implications
The FM-FPM can be employed for REIT industries in other countries and adapted to different industries. However, more respondents or a different set of criteria might lead to different outputs.
Practical implications
The FM-FPM may guide REIT managers and investors while making their decisions and controlling the performance of REITs and investment areas.
Social implications
The FM-FPM may encourage low- and middle-income investors to make good use of their savings.
Originality/value
The research is first (1) to offer a FPM model in order to determine investable areas in a REIT industry and (2) to employ multiple criteria decision-making tools in order to measure the financial performance of individual companies and investment areas in a REIT industry.