Corporate sustainability and financial performance: Collective reputation as moderator of the relationship between environmental performance and firm market value

Markets value superior corporate sustainability performance in part because investors use a firm's environmental performance as a signal of desirable but difficult-to-observe attributes, such as the firm's integrity capacity. Yet a signaling conflict can arise when a firm belongs to an organizational form that has a collective reputation for being unethical. In such circumstances, the firm's environmental performance may no longer credibly signal its underlying integrity capacity, leading markets to adjust downward the value they would otherwise place on the firm's environmental performance. Using longitudinal data on South Korean firms, we find that improvements in firm environmental performance lead to smaller increases in market values for firms belonging to a poorly reputed organizational form. However, firms can partially recover lost value by adopting firm features that reduce the signaling conflict, thereby restoring the notion of corporate sustainability performance driving firm market values.     

An empirical investigation of environmental performance and the market value of the firm

This paper analyzes the shareholder value effects of environmental performance by measuring the stock market reaction associated with announcements of environmental performance. We examine the market reaction to two categories of environmental performance. The first category includes 417 announcements of Corporate Environmental Initiatives (CEIs) that provide information about self-reported corporate efforts to avoid, mitigate, or offset the environmental impacts of the firm's products, services, or processes. The second category includes 363 announcements of Environmental Awards and Certifications (EACs) that provide information about recognition granted by third-parties specifically for environmental performance. Although the market does not react significantly to the aggregated CEI and EAC announcements, we find statistically significant market reactions for certain CEI and EAC subcategories. Specifically, announcements of philanthropic gifts for environmental causes are associated with significant positive market reaction, voluntary emission reductions are associated with significant negative market reaction, and ISO 14001 certifications are associated with significant positive market reaction. The difference between the market reactions to the CEI and EAC categories is statistically insignificant. Overall, the market is selective in reacting to announcements of environmental performance with certain types of announcements even valued negatively.     

The impact of capacity expansion on the market value of the firm

This paper empirically investigates the impact of capacity expansion decisions on the market value of the firm. Event study methodology is used to estimate the abnormal change in stock prices around capacity expansion decision announcements. On the day of the announcement, the magnitude of the price change is abnormally high, evidenced by a significantly positive mean standardized square of the abnormal change (Beaver's U-statistic). We also analyze factors that we could affect the direction and magnitude of the abnormal change in the stock prices. We find that the change in price on the day of the announcement is positively and significantly related to the real growth rate of the industry, and negatively and significantly related to the variability of demand. A negative relationship between the price change and industry capacity utilization is also found which can have important implications for companies which follow the wait-and-see approach to capacity expansion decisions. We also find management ownership to be a significant predictor in explaining stock price changes around these announcements.     

An analysis of firm and market volatility

In this paper, using time series data for the period 2 January 1998 to 31 December 2008 for 560 firms listed on the NYSE, we examine whether firm volatility is related to market volatility. The main contribution of this paper is that we develop an analytical framework motivating the firm-market volatility relationship. We present three new findings on volatility. First, we discover significant evidence of common volatility; for 12 out of 14 sectors, market volatility has a statistically significant effect on firm volatility for at least 50 percent of firms. Second, we discover significant evidence of size effects: for small-sized firms, there is weak evidence of commonality in volatility, while for large-sized firms there is high evidence (for as much as 75 percent of firms) of commonality in volatility. Third, we find that market volatility predicts firm volatility for firms belonging to five of the 14 sectors.     

CEO ownership and firm value

This paper examines the hypothesis that the amount of CEO ownership has a dominating effect on the value of the firm. Using a diverse sample of firms, firm value as measured by Tobin's q is found to be a nonmonotonic function of CEO ownership. Specifically, Tobin's q rises when the CEO owns between 0 and 15% and declines as CEO ownership increases to 50%. Beyond 50%, the value starts to rise. Firm value also is found not to be a function of management ownership when CEO ownership is separated out, indicating that CEO ownership does have a dominating effect on firm value. Copyright © 1999 John Wiley & Sons, Ltd.     

Liquidity and firm value in an emerging market: Nonlinearity,political connections and corporate ownership

This study re-examines the relationship between liquidity and firm value in the emerging stock market of Malaysia, exploring the issues of nonlinearity and moderating variables. Using data for all non-financial firms traded on Bursa Malaysia over the sample period of 2000–2015, the results from the baseline quadratic model suggest stocks must be traded higher than the threshold liquidity level before reaping the benefit of larger firm value. Our key finding of a nonlinear relationship remains robust to alternative liquidity measures and estimation methods, as well as passing a series of endogeneity checks. Using an ideal candidate of lot size reduction for Malaysian stocks in May 2003 as exogenous liquidity shock, we establish the causal effect from liquidity to firm value. Further interaction analyses uncover three important moderating variables in the liquidity-firm value relationship, in which the value impact demands a more liquid market for Malaysian public firms with political connections, higher foreign nominee ownership and higher foreign institutional ownership.     

Labor market flexibility and poverty dynamics

The past two decades have witnessed a rapid growth in flexible work arrangements that, in some instances, could expose workers to a higher poverty risk via limited job stability, few advancement opportunities, and low wages. Nowhere in the world has this increase in flexible work arrangements being more evident than in Spain, where about a third of the wage and salary workforce holds fixed-term contracts. Using Spanish panel data and maximum-likelihood binary models that account for state dependence and unobserved heterogeneity, we examine the poverty implications of past and present temporary employment. Our findings suggest that fixed-term contracts are linked to a greater poverty exposure among women and older men relative to open-ended contracts. Furthermore, this greater poverty exposure can last several years due to feedback effects operating via job instability or via the transition to work statuses characterized by higher poverty hazards. Finally, the adverse impact of temporary employment is linked to the short duration of some contracts, thus signaling the importance of work attachment.     

Product strategy and size of firm in the UK fertilizer market

The paper analyses three aspects of product strategy: the size of product range offered, the extent and type of product differentiation and product matching, and the role of new product innovation in firms' competitive strategies. In essence the paper is concerned with competitive behaviour where the product is treated as a variable. Three conclusions emerged. First, there was no significant correlation between the size of product range offered and the size of firm. Second, while the three main oligopolists almost always tried to differentiate their products the competitive fringe showed a strong tendency to match the major firms' products. Third, new product competition was a persistent feature of oligopolistic rivalry, though the competitive fringe was required to stimulate some developments.     

Survival of the fittest: The impact of eco‐certification and reputation on firm performance

Owing to the increased trend for organic products and the concept of sustainable development, firms must invest in valuable and unique resources to achieve long‐term success and gain competitive advantages. Building on insights from the resource‐based view and natural‐resource‐based view of the firm, the study focuses on the contribution of corporate reputation and eco‐certification as intangible influences on corporate performance. Duration analysis is applied on a sample of 1,572 German wineries over the period 1994 to 2017. The results indicate that individual reputation and eco‐certification have a statistically significant and positively impact on corporate performance, whereas there is no clear evidence of this relationship for collective reputation. In addition, especially those firms with high individual reputation benefit most from eco‐certification. These results are robust across different parametric and semiparametric model estimations.     

Behavior of the firm in a market for heterogeneous labor

This paper develops a dynamic model of the firm in a labor market where workers and jobs are heterogeneous with respect to skill. The firm's recruitment policy, in a heterogeneous market, consists of both a wage offer and a skill requirement. The explicit derivation of this policy serves to clarify the difference between the long-run and short-run relationship between wages and skills. The short-run shift in this relationship helps to explain the occupational upgrading that occurs in cyclical upswings. The model also highlights the impact of the skill level distribution on the rate of change of firms' wage offers.     

商业劳动与价值创造

文章从商业和商业劳动概念出发,辩证分析了"商业劳动创造价值"的观点,对建设资源节约型社会具有一定的现实意义。     

Estimation of market power in the presence of firm level inefficiencies

“The quiet life hypothesis” (QLH) by Hicks (1935) argues that, due to management’s subjective cost of reaching optimal profits, firms use their market power to allow inefficient allocation of resources. Increasing competitive pressure is therefore likely to force management to work harder to reach optimal profits. Another hypothesis, which also relates market power to efficiency is “the efficient structure hypothesis” (ESH) by Demsetz (1973). ESH argues that firms with superior efficiencies or technologies have lower costs and therefore higher profits. These firms are assumed to gain larger market shares which lead to higher concentration. Ignoring the efficiency levels of the firms in a market power model might cause both estimation and interpretation problems. Unfortunately, the literature on market power measurement largely ignores this relationship. In the context of a dynamic setting, we estimate the market power of US airlines in two city-pairs by both allowing inefficiencies of the firms and not allowing inefficiencies of the firms. Using industry level cost data, we estimate the cost function parameters and time-varying efficiencies. An instrumental variables version of the square root Kalman filter is used to estimate time-varying conduct parameters.     

The impact of the WARN Act on firm value

The Worker Adjustment and Retraining Notification (WARN) Act of 1989 mandated that at least 60 days advance notice be given to employees. Critics argued that its passage would decrease managerial flexibility in closing plants, subsequently reducing firm values. This study addresses this issue by examining the stock market's reaction to announcements leading to the eventual enactment of the WARN legislation. We find evidence indicating negative effects of the legislation on stock returns of small firms.     

Evaluating corporate image and reputation using fuzzy MCDM approach in airline market

In today’s highly competitive airline market, preferable corporate image is acknowledged as having high potential to impact customer loyalty. Corporate image provides a powerful way of differentiating a company from its competitors and stimulating purchases. In the past, corporate image has been a vague concept and has been difficult to measure quantitatively. A fuzzy MCDM (Multi Criteria Decision Making) model is thus proposed. It can quantify corporate image and reputation so that management can fully comprehend the relative positioning of company in the markets to make informed judgments and marketing strategies. A study of international airlines serving in Taiwan is conducted for verification. The results indicate that safety record and service emerge as the critical factors of the air transport market while the incentives seem to have little attraction for customers.     

大福:坚定信心深耕中国市场

尽管受到2009年全球性经济危机的影响,日本大福一年一度的中国物流媒体代表团赴日参观访问活动仍如期举行.通过对日新馆、滋贺事业所、利根可口可乐公司茨城自动化仓库、FANCL关东物流中心的实地参观,记者充分领略到日本大福(集团)公司的强大技术实力和先进实践经验.     

陷入财务困境企业的价值评估

陷入财务困境的企业价值的评估具有一定的特殊性,本文针对企业不同的经营状况,分别介绍了暂时处于财务困境的公司和陷于财务困境无力自拔的公司所分别适用的不同的价值评估的方法。     

Individual investors surpass their reputation: Trading behaviour on the Polish futures market

This paper examines individual investors’ trading behaviour by testing the presence of Monday and January anomalies on the Polish futures market, where individuals are the predominant trader type. Both anomalies are well established in the literature, and they are at least partially attributed to individual investors’ trading activities. We conduct an intraday analysis of trading volume, open interest, returns, and return volatility on the futures market in Poland and find the contribution of individuals to market anomalies to be grossly overstated. Hence, individual investors’ trading on the Polish futures market surpasses the prediction by the majority of investigations for mature stock markets.     

陷入财务困境企业的价值评估

陷入财务困境的企业价值的评估具有一定的特殊性,本文针对企业不同的经营状况,分别介绍了暂时处于财务困境的公司和陷于财务困境无力自拔的公司所分别适用的不同的价值评估的方法.     

Labor market analysis for developing countries

This paper is about analyzing labor markets in developing countries, searching for both improved understanding and greater policy relevance. Following a five-part policy evaluation framework, the highlights of labor markets in developing countries are presented. Theoretical models with multiple sectors and segments and empirical analysis using different kinds of data are then reviewed. A brief concluding section addresses some priority research needs.