Search results

With reference to IAS/IFRS, the purpose of this paper is to examine the value relevance of the two amortised cost/fair value measurement methods applied to loans, and test whether loan fair values are an incremental explanatory factor for a bank's stock price, beyond that provided by loan book values.

The value relevance of 83 European banks from 2005‐2008 is analyzed. The authors employ a regression model in which the stock price (dependent variable) is related to accounting variables typically affecting the firms' market value (book value and earnings).

Book values and earnings affect banks' market values. Investors appreciate the difference between loan book and fair values, and attribute to this difference an expected negative value. Furthermore, the control variable for banks headquartered in countries most affected by the financial crisis proves to be strongly significant as the crisis dummy variable itself.

The results have important implications for bank managers, who should consider the importance that financial markets attribute to loan fair values. There are also implications for regulators and standard setters, though these are less obvious.

This is the first study on the explanatory power of loan fair values in Europe. It addresses loan fair values, and the European market, while previous literature has mainly concerned the US market. In addition, the authors use an original dataset containing information on the loan fair values of European banks during a timeframe which covers both pre‐crisis and crisis periods.

The purpose of this paper is to address the internationalization of Russian multinationals by critically challenging existing assumptions about “springboard” foreign market selection by emerging market firms.

The authors studied foreign market selection decisions for 497 international merger and acquisition (M&A) and joint venture (JV) deals completed by Russian multinational enterprises (MNEs) between 1997 and 2009. The statistical model tests the impact of the geographic, political and economic distances of the host country from Russia on Russian MNEs' foreign market selection decisions.

Contrary to existing assumptions, the host country's geographic closeness to Russia, and its being an ex‐USSR republic or a tax haven, positively affected the country's probability of attracting an M&A or JV deal by a Russian MNE, while the similar level of economic development did not significantly influence the MNEs' foreign market selection decisions. The patterns of significance among the explanatory variables vary for Russian MNEs operating in the natural resources industries.

Further studies may extend the observation period, enlarge the database with Greenfield and export deals by Russian MNEs, and add cross‐country cultural distances to the explanatory variables.

Russian managers should consider the “distances” that might influence firms' foreign investment decisions. This paper also allows host country governments willing to formulate policies aimed at the attraction of Russian outward foreign direct investments to obtain a better understanding of Russian MNEs' international strategies.

One of the few quantitative studies on the topic, this research suggests that Russian MNEs choose their own means of foreign market selection, combining gradual and leapfrog approaches to internationalization.