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Article
Publication date: 7 June 2021

Charles Danso, Margarita Kaprielyan and Md Miran Hossain

Recent studies explore how chief executive officer (CEO) social capital affects corporate decision-making. Well-connected CEOs can have greater access to information, which can…

297

Abstract

Purpose

Recent studies explore how chief executive officer (CEO) social capital affects corporate decision-making. Well-connected CEOs can have greater access to information, which can lead to better corporate decisions or permit them to amass power from hierarchy status and make self-serving decisions. This study examines whether investors perceive CEO social capital as a signal of good decision-making (assuming information asymmetry) surrounding asset sell-off events.

Design/methodology/approach

The authors use multivariate regression analysis to examine the effect of CEO social capital on the cumulative abnormal returns (CARs) of the asset buyers and sellers. CARs are estimated using a market model in the period proximate to asset sell-off announcements.

Findings

The authors find that CEO social capital is positively associated with announcement returns of the asset sellers. Moreover, the positive effect of CEO social capital on announcement returns is more pronounced for sellers facing greater information asymmetry. An analysis of post-announcement stock performance reveals that the seller CEO social capital is associated with additional value generated for the shareholders of the seller after a month from the announcement date, especially if the transaction price is disclosed. Overall, findings are consistent with the argument that CEO social capital provides value in high information asymmetry environment.

Originality/value

To the authors' knowledge this is the first study to examine the effect of CEO social capital on the shareholders' wealth created by divestitures.

Details

Managerial Finance, vol. 47 no. 11
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 15 February 2022

Benjamin Jansen, Md Miran Hossain and Jon Taylor

The purpose of the study is to examine whether analyst coverage responds to changes in investor information demand for a firm and to test whether certain investor or firm…

285

Abstract

Purpose

The purpose of the study is to examine whether analyst coverage responds to changes in investor information demand for a firm and to test whether certain investor or firm characteristics moderate this association.

Design/methodology/approach

The authors model analyst activeness (AA) as a function of institutional investors' information demand, proxied by news readership on Bloomberg terminals and retail investors' information demand, proxied by the Google Search Volume Index (GSVI). Additionally, the authors take several steps to mitigate concerns about reverse causality that may confound the findings.

Findings

Results suggest that analysts respond to information demand shocks, but partially revert their coverage after the demand shock subsides. Furthermore, the results suggest that analysts cater their coverage more towards institutional investors than to retail investors. Evidence also suggests that analysts are more responsive to investors interested in firms with tech stock characteristics. Finally, the authors find evidence that specialist analysts respond more to institutional investors while generalist analysts respond more to retail investors.

Originality/value

The authors are the first to empirically examine the extent to which analysts cater to investor information demand. This is a vital topic to study because analysts are one of the primary sources of information for market participants. Understanding an analyst's motivation for providing information will help to facilitate market efficiency.

Details

International Journal of Managerial Finance, vol. 19 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 12 June 2019

Margarita Kaprielyan, Md Miran Hossain and Charles Armah Danso

The purpose of this paper is to investigate whether mutual funds (MFs) take positions in companies that subsequently engage in M&As and whether fund managers adjust portfolio…

438

Abstract

Purpose

The purpose of this paper is to investigate whether mutual funds (MFs) take positions in companies that subsequently engage in M&As and whether fund managers adjust portfolio holdings in the same direction as wealth creation from mergers. Further, the study is the first to examine the relation between active trading surrounding M&As and risk-adjusted performance in MFs.

Design/methodology/approach

The sample includes mergers conducted by publicly traded acquirers of public and private targets over 2003–2016. Several measures of MF managerial activeness in M&As are introduced: merger trading intensity (proportional change in fund’s holdings of M&A stocks), active merger weight (deviation of the fund’s actual weights in M&A stocks and value weights) and active merger trading (deviation of the fund’s actual weights in M&A stocks from the average weights in M&A stocks across the funds within the same Center for Research in Security Prices objective).

Findings

Fund managers who are more vested in the firms engaged in M&As and who are more active in their trades of M&A firms generate higher contemporaneous and subsequent risk-adjusted performance, indicative of managerial skill. Active M&A trading effect on performance is economically meaningful.

Originality/value

This is the first study to examine whether previously documented predictive power of active institutions regarding M&As’ profitability leads to higher risk-adjusted returns for MF investors. The study introduces several measures to gauge how actively fund managers trade companies engaged in M&As and contributes to the literature on MF managers’ ability to pick stocks.

Details

International Journal of Managerial Finance, vol. 16 no. 1
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 6 December 2023

Fatma Lehyani, Alaeddine Zouari, Ahmed Ghorbel and Michel Tollenaere

Companies should enhance their market position and competitiveness by improving staff effectiveness, skills, resource commitment, and applying relevant managerial methods. This…

257

Abstract

Purpose

Companies should enhance their market position and competitiveness by improving staff effectiveness, skills, resource commitment, and applying relevant managerial methods. This study aims to examine the impact of knowledge management (KM) and total quality management (TQM) on employee effectiveness (EE) and supply chain performance (SCP) in emerging economies.

Design/methodology/approach

The used methodology consists on conducting a survey within Tunisian companies, where the authors gathered 206 responses. Collected data was analyzed using statistical package for the social sciences (SPSS) software, enabling the authors to establish a conceptual model. This model was further examined through structural equation modeling, using analysis of moment structures (AMOS) software for hypothesis validation. Additionally, the authors’ research aimed to enhance SCP and boost EE while minimizing costs through a nonlinear mathematical model and the quality function deployment method.

Findings

The results indicate that TQM and KM positively impact EE, and KM and EE positively impact SCP. However, the significance of employee performance on SCP varies depending on company location and industry sector studied.

Originality/value

This work emphasized the involvement of small- and medium-sized enterprise managers from emerging economies in the studied concepts and confirmed the effects of KM and TQM practices on EE and SCP.

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