Lawrence C. Rose and Joseph H. Black
This paper attempts to identify potential countries in Europe for direct foreign investment. Correlations of GNP per capita across international borders indicate Bulgaria and…
Abstract
This paper attempts to identify potential countries in Europe for direct foreign investment. Correlations of GNP per capita across international borders indicate Bulgaria and Czechoslovakia may qualify. The countries that seem to be in the best position to make the investment include Japan, Norway, Sweden, Switzerland, and the United Kingdom from those countries included in the study.
Paul L. Gronewoller, Janet McLeod and Lawrence C. Rose
This study evaluates the practicability of style analysis in evaluating the risk‐adjusted performance of New Zealand's retail equity trusts. The size of the New Zealand market and…
Abstract
This study evaluates the practicability of style analysis in evaluating the risk‐adjusted performance of New Zealand's retail equity trusts. The size of the New Zealand market and the short history of data available generate doubts concerning the usefulness of style analysis under these conditions. Style analysis provides useful insight when applied to the New Zealand retail equity unit trust sector. Two prevalent styles are identified, a large cap style and a mid‐cap‐value/small cap style. Little variation in style was detected for the group of trusts that tracked the large‐cap equity index but substantial variation was indicated in relative performance versus a passive investment in their style benchmarks. Significant variation was detected, both in terms of style and relative performance of trusts that tracked a mid‐cap‐value/small‐cap index. A small number of New Zealand equity managers were able to maintain a consistent style, while meeting or beating the performance of their style benchmarks.
Vipin Gupta, Lawrence Rose and Ricardo Vinícius Dias Jordão
Jarrod Kerr, Mei Qiu and Lawrence C. Rose
The paper aims to investigate the long‐run performance of privatised initial public offerings (IPOs) and their effects on the New Zealand share market (NZSE) and the Australian…
Abstract
Purpose
The paper aims to investigate the long‐run performance of privatised initial public offerings (IPOs) and their effects on the New Zealand share market (NZSE) and the Australian share market (ASX).
Design/methodology/approach
The paper examines the relationship between privatisation and share market capitalisation, liquidity and share ownership. The research also evaluates long‐run risk‐return performance of the privatised companies' portfolios.
Findings
The analysis reveals that privatisations have significantly increased share market capitalisation and have impacted on the market liquidity. In general, anyone investing in privatised companies' portfolios could have received significantly higher returns than investing in an aggregate market portfolio.
Originality/value
The findings have significant practical implications for individual and institutional investors.
Details
Keywords
Christopher B. Malone and Lawrence C. Rose
To re‐examine empirically internalisation and transaction cost theories of firm FDI.
Abstract
Purpose
To re‐examine empirically internalisation and transaction cost theories of firm FDI.
Design/methodology/approach
Empirical analysis based on cross sectional multivariate regressions and the Fama‐French three factor event study procedure. In addition to the key explanatory variables the paper introduces and models several important control variables.
Findings
The paper finds evidence consistent with the internalisation and transaction cost hypotheses. Firms classified with internalisation advantages earn event period abnormal returns of 6.84 percent above firms that are classified without such advantages. In support of transaction cost theory the paper finds that FDIs generate an average abnormal event period return of −2.36 percent. Further, in line with transaction cost theory firms classified with intangible asset advantages also tend to engage in the more complex forms of foreign and industrial diversification.
Research limitations/implications
The paper does not determined if the effect linked to the possession of intangible asset advantages is temporary or permanent. FDI is costly, but firms that enjoy high market valuations tend to do well in M&A or FDI activity.
Originality/value
The study provides new and strengthened support for internalisation theory. The study provides new evidence in support of transactions cost theory.
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Wei‐Huei Hsu, Abdullah Mamun and Lawrence C. Rose
This paper seeks to examine whether the market values the monitoring activity undertaken by a quality bank in the presence of a credit rating agency. Specifically, the question is…
Abstract
Purpose
This paper seeks to examine whether the market values the monitoring activity undertaken by a quality bank in the presence of a credit rating agency. Specifically, the question is asked whether the quality of a lead lending bank influences a market reaction to adverse rating announcements concerning its borrowers.
Design/methodology/approach
The event study methodology and various bank quality proxies (size, growth rate in assets, profitability, capital ratio, bank's credit rating, and ownership) are used to examine the market reaction when a borrower's bank loan rating is placed with negative implication or is downgraded.
Findings
Firms which are certified and monitored by high‐quality banks are less susceptible to negative market reactions when adverse rating announcements are made.
Originality/value
The findings indicate high‐quality lending banks sustain investors' confidence in their borrowers in the face of deteriorating news. The paper argues that investors and borrowers value monitoring from a high‐quality bank, which is an implication of a bank having access to private information about its borrowers.
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Lynne Eagle, Jacinta Hawkins, Philip J. Kitchen and Lawrence C. Rose
The mandatory withdrawal of almost 2,000 complementary and alternative medicines, manufactured under contract on behalf of multiple brand names, primarily in the Australian and…
Abstract
Purpose
The mandatory withdrawal of almost 2,000 complementary and alternative medicines, manufactured under contract on behalf of multiple brand names, primarily in the Australian and New Zealand markets, provides an opportunity to examine the impact on sales levels and both brand and category loyalty of a major product confidence crisis. Sets out to deal with this issue
Design/methodology/approach
Focuses on the impact of the events surrounding the recall within both the Australian and New Zealand markets and links the events surrounding the recall with the scant international literature relating to brand management during crisis situations. Then reports on findings from an investigation of New Zealand consumer perceptions of the sector after the recall event.
Findings
The substantial impact on both category and brand loyalty in the face of prolonged non‐availability of some products is revealed, as is the lack of contingency planning across product supply and marketing communications dimensions. Concludes with recommendations for the future management of brands during such events.
Practical implications
Lessons that may be learned in relation to brand management during crisis situations are stressed, along with implications for cross‐border brand management.
Originality/value
The dynamics of the complementary and alternative medicines market have not been comprehensively researched. In addition, the extant literature regarding brand management during crisis situations is not extensive. This paper therefore makes a contribution towards the understanding of an under‐researched market sector and also the impact on brand management of major disruption to consumer confidence and product availability.
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Jonathan A. Batten and Samanthala Hettihewa
Country‐specific information on risk management is increasingly important, not only for investors and decision makers in international markets but also, for those in national and…
Abstract
Country‐specific information on risk management is increasingly important, not only for investors and decision makers in international markets but also, for those in national and regional markets. This study reports the results of a cross‐sectional survey of risk management practice and derivatives use by a sample of Australian firms. Overall, the results suggest that firm‐specific factors appear to have some influence on risk management practice with the industry of the respondent being the most important, while the degree of international exposure has the least. Larger and more internationally exposed firms are likely to have more frequent reporting of derivatives use, and are more likely to use swaps and options to manage risks than other types of firms. Issues and implications for international firms are discussed.