Tarek Eldomiaty, Ola Attia, Wael Mostafa and Mina Kamal
The internal factors that influence the decision to change dividend growth rates include two competing models: the earnings and free cash flow models. As far as each of the…
Abstract
The internal factors that influence the decision to change dividend growth rates include two competing models: the earnings and free cash flow models. As far as each of the components of each model is considered, the informative and efficient dividend payout decisions require that managers have to focus on the significant component(s) only. This study examines the cointegration, significance, and explanatory power of those components empirically. The expected outcomes serve two objectives. First, on an academic level, it is interesting to examine the extent to which payout practices meet the premises of the earnings and free cash flow models. The latter considers dividends and financing decisions as two faces of the same coin. Second, on a professional level, the outcomes help focus the management’s efforts on the activities that can be performed when considering a change in dividend growth rates.
This study uses data for the firms listed in two indexes: Dow Jones Industrial Average (DJIA30) and NASDAQ100. The data cover quarterly periods from 30 June 1989 to 31 March 2011. The methodology includes (a) cointegration analysis in order to test for model specification and (b) classical regression in order to examine the explanatory power of the components of earnings and free cash flow models.
The results conclude that: (a) Dividends growth rates are cointegrated with the two models significantly; (b) Dividend growth rates are significantly and positively associated with growth in sales and cost of goods sold only. Accordingly, these are the two activities that firms’ management need to focus on when considering a decision to change dividend growth rates, (c) The components of the earnings and free cash flow models explain very little of the variations in dividends growth rates. The results are to be considered a call for further research on the external (market-level) determinants that explain the variations in dividends growth rates. Forthcoming research must separate the effects of firm-level and market-level in order to reach clear judgments on the determinants of dividends growth rates.
This study contributes to the related literature in terms of offering updated robust empirical evidence that the decision to change dividend growth rate is discretionary to a large extent. That is, dividend decisions do not match the propositions of the earnings and free cash flow models entirely. In addition, the results offer solid evidence that financing trends in the period 1989–2011 showed heavy dependence on debt financing compared to other related studies that showed heavy dependence on equity financing during the previous period 1974–1984.
Details
Keywords
To operate successfully, a commercial organization must satisfy the everchanging demands of its clients, its owners, its employees and society as a whole. To do this, it must have…
Abstract
To operate successfully, a commercial organization must satisfy the everchanging demands of its clients, its owners, its employees and society as a whole. To do this, it must have a good understanding of its persona as perceived by its own members and the entities it deals with. This persona, or image an organization presents of itself, and the way in which it is perceived by its external environment and its internal members, is commonly referred to as its Corporate Culture (Deal and Kennedy, 1982; Silverzweig and Allen, 1976). The tangible aspects include corporate logos, uniforms and clothing, office layout, use of ‘in‐vogue’ technology and business processes, while behavioural indicators can include relative importance of social issues and norms such as time keeping, and adherence to prescribed procedures. This paper describes research within a single, large, Australian engineering, procurement and construction management consultancy aimed at identifying the form of its current corporate culture and the extent to which this is perceived to be appropriate by those involved. Using Quinn and Rohrbaugh’s (1983) Competing Values Framework, the overall cultural profile of the organization and dominant characteristic traits is determined through an in‐house electronic survey employing the Organizational Cultural Assessment Instrument. This indicated that the company has a dominant market‐oriented culture. In contrast, the most desired form was found to be the employee focused culture ‐ indicating a misalignment between what employees thought was needed and what was perceived to exist. This finding is considered in the light of recent reports identifying the detrimental effect of market‐oriented cultures, and the supporting role of employee focused cultures, in achieving construction project quality outcomes.
Details
Keywords
This qualitative research explores factors that influence social studies teachers’ issue-selection for classroom discussion. Four high school teachers—three from an urban setting…
Abstract
This qualitative research explores factors that influence social studies teachers’ issue-selection for classroom discussion. Four high school teachers—three from an urban setting and one from a suburban high school—participated in the study. Data were gathered over three months via interviews, classroom observations, and field notes; all were analyzed using the constant comparative technique of the grounded theory approach. Two claims are made: Teachers’ social positioning influences their curriculum choices, and media influences social studies teachers’ issue-selection.
The competing values model (CVM) describes organizational culture in terms of what appear to be mutually exclusive value dimensions: structural control vs. flexibility, focus on…
Abstract
The competing values model (CVM) describes organizational culture in terms of what appear to be mutually exclusive value dimensions: structural control vs. flexibility, focus on internal vs. external stakeholders, and means vs. ends. The apparent paradox in simultaneously expressing competing values has implications for a variety of organizational phenomena, including leadership, decision making, and strategic management. The CVM thus offers promise for providing a common metric for multi‐level, trans‐organizational, and cross‐cultural analyses. To date, however, underlying assumptions regarding the competing values framework as a characterization of culture have not been fully validated. This research provides a test of the competing values model with methodology that is conceptually consonant with the paradoxical nature of the theory. Using a sample drawn from 10 U.S. organizations, a Qsort and multidimensional scaling analysis produce qualified support for a structure of organizational cultural values consistent with the CVM. Further, this study elaborates the CVM by suggesting a mechanism whereby the apparent paradox of competing values might be more effectively managed.
Nemiraja Jadiyappa, Bhanu Sireesha, L. Emily Hickman and Pavana Jyothi
Prior literature demonstrates that the effectiveness of bank monitoring decreases when multiple banks are involved, due to a free rider problem, leading to lower firm value. The…
Abstract
Purpose
Prior literature demonstrates that the effectiveness of bank monitoring decreases when multiple banks are involved, due to a free rider problem, leading to lower firm value. The purpose of this paper is to investigate whether this free rider problem exists in an emerging market context, and whether the relationship between multiple banking relationships and firm value is conditioned on bankers’ incentives to monitor.
Design/methodology/approach
The authors use multivariate panel regression to examine the hypotheses. The conditioning effect of the incentive to govern (the amount of average bank lending) is modeled using an interaction variable. Based on the result of the Hausman test, the authors employ two-way fixed effects estimator to estimate the coefficients.
Findings
First, the negative relationship between multiple banking relationships and firm value holds true among Indian firms. Second, the authors show that this negative relationship is lessened for firms with high average bank debt or higher free cash flows. The analyses suggest that these moderating effects are related to a reduction in the free rider problem rather than a decrease in financial constraints. However, these results are only significant among larger firms.
Originality/value
Prior literature has not considered the conditioning impact of the “incentives to govern” when examining the free rider problem, inherent in situations where multiple actors are involved. The authors show in this study that the free rider problem disappears when the incentives to govern are considered in the overall research framework.
Details
Keywords
M. SILLINCE and J.A.A. SILLINCE
The use of sequence and structure databanks is examined in relation to their application in some of the main branches of protein studies. Also the question of availability is…
Abstract
The use of sequence and structure databanks is examined in relation to their application in some of the main branches of protein studies. Also the question of availability is addressed by means of presenting some information on current sequence and structure databanks. Increasingly research in molecular science requires joint access to both sequence and structure databases, and the reasons for this development, together with some of the methods for integrated access, are analysed.