Srinivas Nippani and Kenneth M. Washer
The enactment of Riegle‐Neal IBBEA in 1994 encouraged bank mergers and acquisitions. Empirical evidence indicates that large banks benefited from IBBEA enactment. However, there…
Abstract
The enactment of Riegle‐Neal IBBEA in 1994 encouraged bank mergers and acquisitions. Empirical evidence indicates that large banks benefited from IBBEA enactment. However, there is little, if any, evidence of the impact of the act on small banks’ profitability relative to large banks. This study examines the impact of IBBEA on the performance of small banks in the period preceding and following IBBEA implementation. Evidence is presented that indicates the return on assets of small banks was significantly less than that of larger banks in the post‐IBBEA period. This is contrary to the results of the pre‐IBBEA period when small banks’ profitability was competitive with and in some cases even better than large banks’ profitability. It is concluded that the enactment of IBBEA has placed small banks at a competitive disadvantage which could eventually lead to their demise.
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Kenneth Washer, Srinivas Nippani and John Wingender
The purpose of this paper is to examine the day‐of‐the‐week effect for three primary money market instruments in Canada. The sample period is 1980‐2009.
Abstract
Purpose
The purpose of this paper is to examine the day‐of‐the‐week effect for three primary money market instruments in Canada. The sample period is 1980‐2009.
Design/methodology/approach
The authors use three approaches. First, a parametric t‐test is employed to determine if a particular day‐of‐the‐week mean return is significantly different from zero, using both a full sample and a trimmed sample. Next, the Wilcoxon signed ranked test is utilized to assess whether the median weekday return is different from zero for each day. Lastly, a binary regression model is used to test if Monday's mean return is different from other days.
Findings
The traditional Monday effect is prevalent in the 1980s for corporate paper and treasury bills (TB), but not for bankers acceptances (BA). In the 1990s, the Monday effect disappears completely. However, in the 2000s the Monday effect reappears, but is positive (it reverses) for both corporate paper and BA. The authors also find strong support for Wednesday being a high return day, which concurs with related money market studies.
Research limitations/implications
While the results are statistically significant, the economic significance is dubious. This study helps market participants in that it shows that they need to allow for distinct day‐of‐the‐week patterns when using yield spreads.
Practical implications
One practical implication for practitioners is to time purchases of Canadian money market securities for Monday when returns are low (relying on the results of the full sample period). Issuers should time sales for non‐Mondays when returns are higher and yields are lower.
Originality/value
This study is original in that it is the first one to analyze day‐of‐the‐week effects in the Canadian money market. The authors compare the results to studies that focus on the US market.
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Kenneth M Washer, Srinivas Nippani and Robert R Johnson
Several articles in the popular press have detailed an end-of-year anomaly known as the Santa Claus Rally, a period best defined as the last five trading days of December and the…
Abstract
Purpose
Several articles in the popular press have detailed an end-of-year anomaly known as the Santa Claus Rally, a period best defined as the last five trading days of December and the first two trading days of January. The purpose of this paper is to examine US stock market returns over this period from 1926 to 2014.
Design/methodology/approach
The authors examine the Santa Claus Rally by relating it to firm size in the stock markets of the USA. The Santa Claus Rally consists of the last five trading days in December and the first two in January. The authors use t-tests, non-parametric test and regression analysis to determine if investors in small firms get superior returns over the period 1926-2014.
Findings
The authors find that returns are generally higher during the period and that the effect is considerably stronger for small-firm portfolios relative to large capitalization portfolios. The authors also provide convincing evidence that the three most important trading days (especially for small stock portfolios) are the last trading day in December and the first two trading days in January.
Research limitations/implications
The authors only check the markets in the USA. Market makers can use this to get significantly high returns during the Christmas-New Year period. The study shows for the first time that there is a size effect as part of the Santa Claus Rally.
Practical implications
This is the first study to show that Santa Claus Rally exists for a long time in the USA. It is the first study to show that there is a size effect in Santa Claus Rally. Market participants could get significantly higher returns by investing or being invested in the stock market during this period.
Social implications
The impact of the holiday season on stock market returns.
Originality/value
This is the first major academic study to examine Santa Claus Rally in this much detail. The authors not only show that the rally exists, the authors show that it is based on firm size and has been in existence for nearly 90 years in the USA.
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This paper examines the determinants of corporate dividend policy in Jordan. The study uses a firm‐level panel data set of all publicly traded firms on the Amman Stock Exchange…
Abstract
This paper examines the determinants of corporate dividend policy in Jordan. The study uses a firm‐level panel data set of all publicly traded firms on the Amman Stock Exchange between 1989 and 2000. The study develops eight research hypotheses, which are used to represent the main theories of corporate dividends. A general‐to‐specific modeling approach is used to choose between the competing hypotheses. The study examines the determinants of the amount of dividends using Tobit specifications. The results suggest that the proportion of stocks held by insiders and state ownership significantly affect the amount of dividends paid. Size, age, and profitability of the firm seem to be determinant factors of corporate dividend policy in Jordan. The findings provide strong support for the agency costs hypothesis and are broadly consistent with the pecking order hypothesis. The results provide no support for the signaling hypothesis.
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Srinivas Nippani and Dror Parnes
This paper aims to analyze how political brinkmanship impacted Treasury yields during the debt ceiling debate in 2015. The results show that the resignation of the House Speaker…
Abstract
Purpose
This paper aims to analyze how political brinkmanship impacted Treasury yields during the debt ceiling debate in 2015. The results show that the resignation of the House Speaker John A. Boehner caused a significant decrease in Treasury bill yields of one- and three-month maturities. The authors robust analysis indicates that these lower yields have saved US taxpayers several billion dollars in extra tax expenses. This paper provides evidence that lack of political brinkmanship can be very advantageous for the taxpayers. This has considerable implications for lawmakers in this post-election year.
Design/methodology/approach
The authors examine the differences in yields between equal maturity short-term Treasury securities and commercial paper using t-tests, non-parametric tests and a robust regression model based on earlier empirical studies.
Findings
This study provides evidence indicating that between September 25, 2015, and up to October 30, 2015, relatively lower Treasury yields resulted from the lack of political brinkmanship, and this has saved the US taxpayers several billion dollars in interest expenses in 2015.
Research limitations/implications
The study showed that lower yields will result from a lack of political brinkmanship, and this resulted in savings of several billions of dollars in interest payments. Considering that both the White House and Congress will be controlled by the same political party, this gives lawmakers a unique opportunity to have less acrimonious debt ceiling debates. The limitation of the study is that it does not consider the impact on foreign exchange markets and other factors which could play a major role.
Practical/implications
Unlike earlier scenarios where default risk increased, followed by credit rating downgrades, there was a quiet confidence this time about a quick resolution. Markets were stable, and this allowed money market participants to invest more confidently even when an upcoming debt ceiling debate is on. Corporations that invested additional cash in money markets for short-term could do it more confidently at that time without fear of default or interest rate risk which could potentially harm the market value of their investments.
Practical/implications
It implies that there will be lower taxpayer costs because of debt ceilings and avoidance of shutdowns of the federal government. It also implies that there could be more confidence in the dollar.
Originality/value
Several earlier studies have examined Treasury default caused by political brinkmanship. This is the first study to examine an event where political brinkmanship appeared possible and then suddenly dissipated in a single day. Political brinkmanship is bad news because it increases taxpayer interest burden as seen from several of the studies above. Therefore, it should be considered good news if no disagreement is evident. This argument serves as our motivation for this paper. As an increase in the chances of default causes an increase in the yield of Treasury bills as earlier studies showed, a decrease in the chance of default caused Treasury bill yields to be that much lower based on the results of this study.
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I am concerned with insights heterodox economics, and particularly the new institution economics, can offer regarding interactions between health emergencies and the airline…
Abstract
I am concerned with insights heterodox economics, and particularly the new institution economics, can offer regarding interactions between health emergencies and the airline industry. Air services not only facilitates the transmissions of diseases among humans, and between animals, but on the positive side, can expedite the movement of medicines and the transfer of those afflicted during pandemics and epidemics. They can serve to limit the outbreak of disease by providing “mercy flights” to regions poorly served by other modes. Significant challenge confronting carriers during a major event, however, often included immediate financial shocks as well as ensuring their operations do not contribute to the spread of disease. These economic challenges for both commercial carriers and public policymakers involve sources of finance for what is, in this context, a semi-public service as well as the extent to which airlines should retain standby capacity extending resilience to the air-service supply chain. Conventional neoclassical economics, while still at the center of analyzing many of these sorts of issues, has increasingly, because of its rigid assumption and poor forecasting record, been supplemented by heterodox economic thinking. This trend has been reinforced by progress in fields such as psychology. What I demonstrate is that heterodox economics, and especially the role of institutions, offers a more complete picture of the interactions between air transportation and the spread of disease.
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Milk, the universally perfect food, its compositional quality and bacteriological purity causing few qualms nowadays in this country and outbreaks of milk‐borne disease relatively…
Abstract
Milk, the universally perfect food, its compositional quality and bacteriological purity causing few qualms nowadays in this country and outbreaks of milk‐borne disease relatively rare, it may come as a surprise that there is another aspect of milk consumption causing discussion and not a little controversy in medical circles. There is an increasing awareness of milk allergy in infancy and in certain adult disorders, evidenced less by serological tests than by the relief afforded by milk‐free diets and the return of symptoms on the re‐institution of a milk diet. Skin tests also are not particularly reliable but the serological tests have at least demonstrated anti‐bodies to milk proteins in most artificially fed babies after the age of seven weeks (Gunther, M. et al, 1960).
Kenneth D. Lawrence, Sheila M. Lawrence, Ronald Klimberg and Jerry Fjermestad
Frequently, problems involving a management activity involve the incurring of a setup charge for the activity. In these cases, the total cost of the activity is the sum of the…
Abstract
Frequently, problems involving a management activity involve the incurring of a setup charge for the activity. In these cases, the total cost of the activity is the sum of the variable cost related to the level of the activity and a set up cost required to initiate the activity. In this research, we will also use goals that involve demand management of service centers based upon the revenue potential of the customer districts they will serve.
Kenneth Ofori-Boateng, Williams Ohemeng, Elvis Kwame Agyapong and Ben Justice Bribinti
In Ghana, even though scholars and experts in the field of economics and finance have expressed their opinions and perceptions on the effect of the pandemic on the Ghana Stock…
Abstract
Purpose
In Ghana, even though scholars and experts in the field of economics and finance have expressed their opinions and perceptions on the effect of the pandemic on the Ghana Stock Exchange, there has been no study conducted to that effect. This study, therefore, aimed at examining the impact of COVID-19 on the stock returns on the Ghana stock exchange. This would help policy makers and investors in making efficient decisions.
Design/methodology/approach
The outbreak of the novel COVID-19 has been a thorn in the flesh of the world in its entirety, affecting many aspects of life including the stock market. This study, therefore, examined the impact of the outbreak on the stock returns of the Ghana Stock Exchange. The study utilized data from the All Share Prices of the Ghana stock exchange, commonly known as the Ghana stoke exchange composite index (GSECI) for analysis. The data covered the period before the outbreak of COVID-19 and during the outbreak. It was revealed that the Ghana stock exchange experienced better returns on the market before the outbreak of the virus. The outbreak of COVID-19 has led to wide variations in the market increasing the risk of investments. The exponential General Autoregressive Conditional Heteroscedasticity (EGARCH) (1, 1) model also reveals that the outbreak of COVID-19 has a significant negative effect on the returns in the market. The market in these periods of COVID-19 is highly volatile. It is recommended that investors should carefully consider risk mitigation strategies to enable them diversify their investments effectively and efficiently against the high risk associated with the market in this COVID-19 era.
Findings
It was revealed that the Ghana stock exchange experienced better returns on the market before the outbreak of the virus. The outbreak of COVID-19 has led to wide variations in the market increasing the risk of investments. The EGARCH (1, 1) model also revealed that the outbreak of COVID-19 had a significant negative effect on stock returns in the market. The market during these periods of COVID-19 was viewed as highly volatile.
Research limitations/implications
The outbreak of COVID-19 is hence deduced to have a negative impact on the Ghana stock exchange. However, the knowledge of how the market has been affected by the disease, it is important that financial risk mitigation studies be undertaken. This goes beyond what this study has done. The study can further be expanded to include other important economic variables such as GDP, inflation, exchange rates and the likes in to the model.
Practical implications
Investors should carefully consider risk mitigation strategies to enable them diversify their investments effectively and efficiently against the high risk associated with the market in this COVID-19 era.
Social implications
It is also important that investors consider diversification of their investments in order to reduce the risk in their investments. It will be more appropriate for most investors to invest with companies such as banks and the telecommunications companies listed on the on the market. This is because most of the telecommunication companies in these times have taken advantage and are making good profit on their businesses. Likewise, some of the financial institutions are considered essential institution in these times. Investing in industries such as manufacturing and the oil and gas sector may be more risky.
Originality/value
The decline in economic and financial market indicators could be credited to the failure of most business entities, organizations and firms which are struggling to sustain their operations in these times of COVID-19. These also include firms listed on the Ghana stock exchange with whom investors transact their daily businesses. However, about 70% of the Ghanaian economy heavily depends on these business and firms found in the private and informal sector. According to the Ghana Statistics Service COVID-19 Business Tracker Survey, about 131,000 businesses expressed their uncertainties with the business environment and also faced the challenge of financial accessibility. The study is appropriate to unearth the true effect and offer policy interventions.
Harish C. Bahl, Jatinder N.D. Gupta and Kenneth G. Elzinga
This study aims to propose a framework for developing strategies for the supply chain of craft beer that can make the business efficient and profitable, and at the same time…
Abstract
Purpose
This study aims to propose a framework for developing strategies for the supply chain of craft beer that can make the business efficient and profitable, and at the same time, generate sustainability benefits from reducing waste, conserving natural resources and reducing pollution.
Design/methodology/approach
Based on an extensive review of the literature of academic and industry publications, source material from craft brewers primarily situated in the USA and industry experience in craft brewing, the proposed framework describes strategies to establish sustainable craft beer supply chains.
Findings
The framework for craft beer supply chain consists of four categories that contribute to craft beer sustainability: ingredient procurement, recycling efforts, energy usage and distribution systems – some of these mimicking those used by macrobrewers. Each of the categories is further subdivided. Successful practices and examples are highlighted for each of the subcategories.
Research limitations/implications
This proposed framework was built upon current practices and available literature in the USA and focused on the environmental pillar of sustainability. Further, the proposed framework arises from the fact that current best practices in sustainability were available primarily from larger craft brewers, like Sierra Nevada and New Belgium.
Practical implications
By paying attention to operational changes in their supply chains, craft brewers can manage costs and improve their sustainability track record by reducing waste, conserving natural resources and improving upon their pollution footprint. Craft brewers can economize in the use of water, grains, hops and yeast by using practices discussed in this paper.
Originality/value
This is the first time that all aspects of supply chain and sustainability considerations in craft beer production are discussed in a comprehensive manner to propose a framework for analysis and enhancement of productivity and sustainability at the same time. The fact that the proposed framework can be used in future studies to empirically evaluate the utility of various sustainability strategies adds to the originality and value of this research.