Search results

Recent globalization of markets has led to corporate activities that span numerous national boundaries within a single multinational corporation. We address the particular problem of cash flow management in a multinational setting. Uncertainty regarding changes in exchange rates, differences between currency bid and ask prices, possibly unknown changes in both lending and borrowing rates, and uncertain cash flows from subsidiaries make this problem difficult to specify in a traditional crisp environment. In this paper, we show how fuzzy programming techniques can be employed to handle the general problem of multinational cash flow netting. We also provide a specific numerical example comparing the results of the crisp and fuzzy contexts with the aid of sensitivity analysis.

We examine the entry mode choice for Canadian firms entering the United States (U.S.). Entry options are categorized into three competing modes: mergers and acquisitions; joint ventures; and subsidiaries. The unit of analysis is the foreign direct investment (FDI) transaction between a Canadian firm and an American counterpart during the period from January 1980 through December 1989. Using canonical discriminant analysis, we develop a set of variables that characterize the entry mode choice. We find transaction specific information available to senior management provides important information regarding the entry mode choice. The importance of mergers and acquisitions is particularly apparent over this sample period. Empirical evidence strongly supports our measures of resource commitment, dissemination risk, and liquidity position as important measures determining mode of entry. Joint ventures display meaningful differences related to these measures in contrast to both mergers and acquisitions, and subsidiary investments.

Tweens (8‐14 year‐olds) comprise a new type of audience – an increasingly powerful and smart consumer group which last year alone spent and influenced an astounding US$1.18 trillion across the globe. They are different in every way. They are more likely to have a friend on the other side of the world than in their own street, they think the television remote is broken when they cannot find the courser on the screen; they drop from existence when the battery in their cell phone is flat. And they know current brand images better than any advertising expert. Based on the world’s most extensive study of tween attitudes and behaviors ever conducted, the author looks at the phenomena behind global children and their relationships with brands and explores why building brands to our future generation no longer is just a child's play.

Evaluation of the foreign listing decision involves many complexities since it impacts a firm's financing, investment, and marketing decisions. In this paper, we identify major costs and benefits of foreign listing based on the available evidence and suggest evaluation of the foreign listing decision using an Adjusted Present Value method. We also discuss implications of some recent regulatory changes on the costs and benefits of foreign listing.

This paper uses a transactions economics theory of financial governance to reconcile and integrate the evidence on inter‐ and intra‐country differences in corporate finance and corporate governance. We argue that one reason for the competitive advantage demonstrated by Japan in recent years is Japan's greater use of high capability financial governance and its consequent reduction of risks that would otherwise be borne.

The study aims to investigate market reactions associated with the JUST 100 rankings published by JUST Capital, a non-profit organization, as well as differences in financial reporting quality and performance between selected firms and their industry peers.

This study uses a sample of 431 firms selected as the 100 America’s Most Just Companies between 2016 and 2020 by JUST Capital. This study performs both an event study to determine whether the rankings are useful to investors and cross-sectional regression analyses on the characteristics of selected firms compared to their peers.

This study finds that investors react positively to selected firms around the time of the release of the JUST 100 rankings, suggesting that the rankings are decision-useful. This study also finds that selected firms exhibit higher accounting quality and financial performance than their peers.

Rankings may not be free from bias because of JUST Capital’s ownership of an exchange-traded fund.

The findings validate the rankings as well as the methodology used by JUST Capital, as they show market participants value firms that engage in socially responsible actions through their commitment to positively impact five key stakeholder groups: employees, customers, communities, environment and shareholders.

To the best of the authors’ knowledge, this is the first study that shows the importance of the JUST 100 rankings for investment decisions. Considering the growing push for companies to disclose environmental, social and governance (ESG) activities, this study provides evidence to support ESG disclosure regulations.

The purpose of this paper is to provide evidence in support of incentive and retention-based explanations for backdating.

The authors use matching-firm techniques and the bivariate logistic model.

Backdating firms tend to be younger and faster growing – the characteristics of firms with growing demand for skilled labor. Further, rather than experiencing poor performance, backdating firms tend to outperform matching firms in both prior- and post-backdating years.

The results suggest that backdating reflects a firm's demand for valuable employees rather than strictly a manifestation of agency problems, as evidenced by previous study.

What information do members of Congress (politicians) use when they trade stocks? The purpose of this paper is to attempt to answer this question by investigating the relationship between an aggregate measure of trading by members of Congress (aggregate congressional trading) and future stock market returns.

The authors follow the empirical framework used in academic work on corporate insiders. In particular, they aggregate 61,998 common stock transactions by politicians over the 2004–2010 period and estimate time series regressions at a monthly frequency with heteroskedasticity and autocorrelation robust t-statistics.

The authors find that aggregate congressional trading predicts future stock market returns, suggesting that politicians use economy-wide (i.e. macroeconomic) information in their stock trades. The authors also present evidence that aggregate congressional trading is related to the growth rate of industrial production, suggesting that industrial production serves as a potential channel through which aggregate congressional trading predicts future stock market returns.

To the best of the authors’ knowledge, this study is the first to document a relationship between aggregate congressional trading and stock market returns. The media and scholarly attention on politicians’ trades have mostly focused on the question of whether politicians have superior information on individual firms. The results from this study suggest that politicians’ informational advantage may go beyond individual firms such that they potentially have superior information on the overall trajectory of the economy as well.