P. Raghavendra Rau and Ting Yu
Over the past two decades, the topics of Environmental, Social and Corporate Governance (ESG) and Corporate Social Responsibility (CSR) have attracted an increasing amount of…
Abstract
Purpose
Over the past two decades, the topics of Environmental, Social and Corporate Governance (ESG) and Corporate Social Responsibility (CSR) have attracted an increasing amount of interest, reflecting a growing sensitivity of investors and corporations towards environmental, social and governance issues.
Design/methodology/approach
This survey offers an overview of the academic literature on ESG/CSR through the lens of investors, institutions and firms. We first discuss the definitions of ESG and CSR and their relationship to each other.
Findings
We next describe how ESG is measured and note problems with the measurement of and quality of ESG data and discrepancies between different measures of ESG. We then turn our attention to investors, examining what types of investors invest in ESG and the role of institutional investors in ESG. From the firm's perspective, we discuss why firms themselves conduct ESG. We also summarize the literature on the impact of ESG on firms: how ESG affects firms' financing, disclosure and reporting activities and firm performance. Finally, we describe other consequences of the focus of ESG and CSR on firms and investors.
Originality/value
This survey offers an overview of the academic literature on ESG/CSR through the lens of investors, institutions and firms.
Verdiana Morreale and Elisa Giuliani
While multinational companies develop meta-level policies to address grand sustainability challenges and CEOs are increasingly showing their social activism, the hard work of…
Abstract
While multinational companies develop meta-level policies to address grand sustainability challenges and CEOs are increasingly showing their social activism, the hard work of concretely defending communities’ rights and the environment from business exploitation is often left to powerless individuals, known as human rights defenders (here defenders), who face severe risks for their advocacy. According to some statistics, between 2015 and 2022, defenders worldwide have been subject to over 4,000 attacks, including killings, tortures, and intimidation. In this chapter, the authors discuss the relevance of defenders to the promotion of the sustainable development goal (SDG) agenda and develop a conceptual model to predict CEOs’ reactions to defenders.
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Mohammad Tareq, Muhammad Nurul Houqe, Tony van Zijl, Dennis William Taylor and Clive Morley
The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but…
Abstract
Purpose
The purpose of this study is to develop a new measure for discriminatory related party transactions (DRPTs). There are currently measures for such discriminatory transactions but the new measure has a strong theoretical basis and is less susceptible to measurement error.
Design/methodology/approach
This paper develops and tests a new measure for these discriminatory transactions. Type I and Type II error rates and the power of the new measure are compared with an existing measure using computer-simulated and real data.
Findings
The capital market sensitivity of the new measure is also tested and compared with the existing measure. The new measure is found to be superior.
Practical implications
The new measure of DRPTs has the potential to contribute to both further research on the impact of related party transactions and policy-making in relation to DRPTs.
Originality/value
This paper has developed and tested a new measure for DRPTs.
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The purpose of this paper is to investigate the relationship between related party transactions (RPTs) and accounting quality for the firms listed on the Athens Stock Exchange.
Abstract
Purpose
The purpose of this paper is to investigate the relationship between related party transactions (RPTs) and accounting quality for the firms listed on the Athens Stock Exchange.
Design/methodology/approach
This paper compares accounting quality across two groups of firms. The first group contains firms that conduct material RPTs and the second group contains firms that do not conduct material RPTs. Accounting quality is measured using different proxies of earnings management. Four earnings management proxies are used, three metrics for earnings smoothing and one for managing earnings towards a target.
Findings
The results of the current study do not suggest that firms with significant RPTs exhibit less accounting quality compared to non-RPTs firms.
Research limitations/implications
The results support the argument that RPTs are conventional transactions that are mainly conducted for business purposes.
Originality/value
This paper contributes to the literature by examining the effect of RPTs on accounting quality in Greece and whether firms that conduct RPTs exhibit less accounting quality or not.
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The purpose of this paper is to examine the effect of name changes on the value of UK companies. Previous research in the USA suggests that there is little effect associated with…
Abstract
Purpose
The purpose of this paper is to examine the effect of name changes on the value of UK companies. Previous research in the USA suggests that there is little effect associated with a name change, except for a small sample of Dot Com companies.
Design/methodology/approach
This study uses an event study methodology to measure the short‐term abnormal returns associated with the announcement of company name changes. It uses a calendar time methodology to measure the corresponding long‐term abnormal returns. It distinguishes between amendments and radical name changes, as well as those that signal that a firm is diversifying or re‐focusing.
Findings
Contrary to the existing research, there is evidence of consistent abnormal returns following name change announcements, particularly when a distinction is made between amendments and radical name changes, and whether the name change reflects a company that is diversifying or re‐focusing.
Research limitations/implications
This research suggests that companies should reflect on the nature of a proposed name change. Company name changes that drop part of an existing name are not well received by shareholders, whereas those that add to the existing name are. In addition, adding or dropping the term “group” from a company's name can also have considerable effects on the share price, both in the short and long run.
Practical implications
This paper shows that shareholders' perceptions of the implications of a company's name change are important. Name change announcements should therefore be regarded as influential signals to investors.
Originality/value
This paper finds significant abnormal returns associated with company name change announcements. Further, it shows that the type of name change is important in determining the sign of these resulting abnormal returns.
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Hardeep Singh Mundi and Deepak Kumar
This paper aims to review, systematize and integrate existing research on alternative investments. This study conducts performance analysis comprising production timeline…
Abstract
Purpose
This paper aims to review, systematize and integrate existing research on alternative investments. This study conducts performance analysis comprising production timeline, country-wise contributions, analysis of sources, affiliations, the geography of authors and citations of studies on alternative investments.
Design/methodology/approach
This study adopts a thematic and bibliometric analysis methodology on 570 papers identified from mainstream literature on alternative investments. This study provides an analysis of science mapping, including co-citation analysis, bibliometric coupling, word analysis and trending topics on alternative investments. In addition, the study presents thematic analysis by classifying existing studies into nine themes.
Findings
Alternative investments provide diversification benefits and play a critical role in portfolio construction, and the research on alternative investments has gained momentum in recent times. This study finds that hedge funds, private equity, artwork, collectibles, commodities, fine wine and venture capital have remained prominent themes in the field. Investments in cryptocurrencies are an emerging area in the research on alternative investments.
Research limitations/implications
This study limits itself to the papers published in the area of finance and economics listed on the Scopus database.
Originality/value
This study provides quantitative bibliometric analysis and thematic analysis of the extant literature on alternative investments and identifies the areas that could be developed to advance research on alternative investments.
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In this article, we review the recent academic research on the valuation of Internet companies. In particular, we focus on the valuation method(s) which were said to be suitable…
Abstract
In this article, we review the recent academic research on the valuation of Internet companies. In particular, we focus on the valuation method(s) which were said to be suitable for new economy start-ups in the boom years 1998–2000, and conclude that they were neither novel nor very accurate. Since the downturn in the sector, the valuation focus has returned to advanced fundamental valuation methods such as real options valuation.
Researchers suspect that the overvaluation of equity issuing acquirers is a major cause of their subsequent post-event underperformance. Definitive conclusions regarding this…
Abstract
Purpose
Researchers suspect that the overvaluation of equity issuing acquirers is a major cause of their subsequent post-event underperformance. Definitive conclusions regarding this overpricing hypothesis have not been possible since indicators of overpricing such as the book-to-market ratio and subsequent underperformance are open to alternative interpretations. The purpose of this paper is to corroborate or refute overvaluation as a driver of equity issuing acquirers’ subsequent underperformance.
Design/methodology/approach
The literature has linked overvaluation of acquirers to over-optimistic expectations. The authors use analysts’ earnings forecasts to reflect the market's expectations. Over-optimism is indicated by subsequent earnings disappointments. The authors examine the relation between acquirers’ choice of payment method and their tendency to report disappointing earnings. The authors also examine the effect of including a more direct measure of over-optimism in a model to explain the long-run post-event buy-and-hold-abnormal returns of acquirers.
Findings
The post-acquisition earnings of equity issuing acquirers disappoint more often than those of acquirers employing alternative financing methods. This relationship is confined to glamour acquirers. The ability of financing method to predict long-run post-acquisition performance is subsumed when direct measures of optimism are included in a model explaining long-run post-acquisition performance. This result is robust to controls for overpayment and other potential explanations of post-acquisition underperformance.
Research limitations/implications
Acquirers’ management exploit their information advantage to exchange overvalued equity for the assets of the target company in accordance with Loughran and Ritter's (2000) behavioural timing hypothesis.
Originality/value
The study provides new and unambiguous evidence that equity-issuing acquirers are optimistically priced at the time of acquisition.