Cash holdings of listed and unlisted firms: new evidence from the euro area

This paper examines the cash holdings behavior of listed and unlisted firms. We argue that unlisted firms, which are smaller, face a greater wedge between the cost of external and internal finance and as a result they need to rely more on the later. Relying on internal funds means that firms have a precautionary motive to hold cash. We test our theory using an unbalanced panel of mainly small medium enterprises within the euro area over the period 2003–2017 paying special attention to the role of financial pressure, financial constraints and the recent financial crisis. Our findings reveal that unlisted firms hold more cash than their listed counterparts due to precautionary motives. In addition, when considering the effect of financial pressure, the results show that the difference in cash holdings between listed and unlisted firms exhibit a ‘U-shaped’ relationship. Finally, unlisted firms have a higher sensitivity to save cash out of cash flow than listed firms. Our results are robust to using different specifications and different financial pressure measures.     

The relevance of earnings and cash flows in a heavily regulated industry: Evidence from the Greek banking sector

This study examines the informational quality of annual accounting earnings within Greek banking institutions taking into consideration the most significant risks facing by such firms and specifically interest rate risk, credit risk, liquidity risk and solvency risk, alongside with the persistence of earnings and bank size as significant determinants of ERCs. Data analysis over a period of ten years (1995-2004) revealed that earnings have higher incremental importance in explaining stock return movements compared to cash flows since earnings change has been found to affect stock returns positively. Additionally, interest rate risk has a positive but not significant impact on the return-earnings relation but on the contrary solvency risk, credit risk and liquidity risk proved to have a negative impact on the valuation process for both small and big-sized banks. Finally, tests on the incremental informativeness of cash flows when earnings are transitory provide significant results suggesting that investors seek for alternative measures of banks' performance when earnings are characterized by increased extremity but inversely cash flows and earnings seem to be equally value relevant when investors evaluate big-sized banking institutions. The results are generally robust to the specification of the empirical models and the research design employed in our study.     

Foreign Exchange Risk,Equity Risk Factors and Economic Growth

This paper examines the information content of the equity risk factors that explain cross variation of stock returns and predicting future macroeconomic growth. For the first time we incorporate a new foreign exchange risk factor, providing important insights into the relationship between risk factors and the business cycle. The methodology involves the performance of a stepwise regression analysis of future macroeconomic growth against the lagged returns of five risk factors (market risk premium, size, value, momentum and foreign exchange risk). The results are validated with Granger causality tests and out-of-sample dynamic forecasting. They show that the foreign exchange risk factor contains strong, stable and statistically significant incremental information concerning future macroeconomic growth. Firms that are sensitive to the foreign exchange risk thrive when an economic upturn is anticipated and firms that are insensitive to the foreign exchange risk will have larger returns when an economic downturn is anticipated.     

Mentoring receipt and personality: Evidence for non-linear relationships

The research investigates the relationship of the Big-Five of personality with mentoring receipt with the use of two independent studies. The findings of the studies show substantial consistency. Equations of quadratic form describe half of the tested relationships better than linear equations. The association of openness to experience and agreeableness with mentoring receipt is of inverted U-shape. The benefits of being open and agreeable for mentoring receipt cease to exist at high values of these traits. On the other hand, emotional stability and conscientiousness demonstrate exclusively positive linear relationships with mentoring receipt. The form of the relationship of extraversion differs between the two studies, but the overall trend is positive. The substantial quadratic component in the association of personality with receipt of mentoring means that research hitherto may be grossly underestimating the effects of personality on developmental relationships because earlier studies assume strictly linear associations. Parts of the results also imply that the associations of certain personality traits with mentoring receipt may depend upon the occupational context.     

Does Higher Education Affect Economic Growth? The Case of Greece

Abstract

The purpose of the study is twofold: first, it presents an extensive review of empirical studies that have examined the relationship between higher education and economic growth. Second, it estimates the effect of higher education on economic growth in Greece over the period 1960–2009. It applies the model introduced by Mankiw, Romer, and Weil (1992 Mankiw, G., Romer, D., & Weil, D. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407–437. doi: 10.2307/2118477[Crossref], [Web of Science ®] , [Google Scholar]) by using the higher enrolment rates as a proxy of human capital. The paper employs cointegration and an error-correction model to test the causal relationship between higher education, physical capital investments and economic growth. The empirical analysis reveals that there is a long-run cointegrating relationship between higher education, physical capital investments and economic growth. The elasticity of economic growth with respect to higher education is 0.52%. The results also suggest that there is evidence of unidirectional long-run and short-run Granger causality running from higher education and physical capital investments to economic growth.     

CORPORATE DIVIDEND POLICY DETERMINANTS: INTELLIGENT VERSUS A TRADITIONAL APPROACH

Dividend is the return that an investor receives when purchasing a company's shares. The decision to pay these dividends to shareholders concerns several other groups of people, such as financial managers, consulting firms, individual and institutional investors, government and monitoring authorities, and creditors, just to name a few. The prediction and modelling of this decision has received a significant amount of attention in the corporate finance literature. However, the methods used to study the aforementioned question are limited to the logistic regression method without any implementation of the advanced and expert methods of data mining. These methods have proven their superiority in other business‐related fields, such as marketing, production, accounting and auditing. In finance, bankruptcy prediction has the vast majority among data‐mining implementations, but to the best of the authors’ knowledge such an implementation does not exist in dividend payment prediction. This paper satisfies this gap in the literature and provides answers that help to understand the so‐called ‘dividend puzzle’. Specifically, this paper provides evidence supporting the hypothesis that data‐mining methods perform better in accuracy measures against the traditional methods used. The prediction of dividend policy determinants provides valuable benefits to all related parties, as they can manage, invest, consult and monitor the dividend policy in a more effective way. Copyright © 2013 John Wiley & Sons, Ltd.     

New development: Public service enterprises and consumer-centric management

This article presents consumer satisfaction surveys for three very different public enterprises in the city of Edessa in Greece: the local water and sewerage company, the municipal conservatory of music and a café/restaurant. The majority of consumers were satisfied with the services provided to them by these three public enterprises. Relationships with consumers were managed very differently by the enterprises suggesting that service delivery should be based on the individual characteristics of the enterprise and the environment it operates in.     

Productivity Trends and the Sterling Real Exchange Rates*

This paper provides favorable econometric evidence for a productivity‐based model of the pound/euro real exchange rate. We find that a 1% increase in UK productivity is consistent with a 3.5% real depreciation of sterling. Likewise, a 1% increase in euro area productivity is compatible with a 5.16% real appreciation of sterling. The asymmetric response of UK and foreign productivity shocks corresponds well with our model if UK labor supply is more elastic than euro area labor supply. Estimates of equilibrium exchange rates suggest that sterling was not overvalued at its 2004Q3 level vis‐à‐vis the euro.     

Toward rigor and parsimony: a primary validation of Kolvereid’s (1996) entrepreneurial attitudes scales

Questioning the validity of scholarly work is not a typical path to publication in the management field. However, although considerable scholarship assesses entrepreneurial attitudes and intentions models of behaviour, methodological weaknesses in scale development have hampered scholars’ ability to rigorously interpret and build upon their research findings. We review 20 years of research and discover that the pioneer measure of entrepreneurial attitudes as a predictor of self-employment intentions, has yet to be empirically validated. We show that construct and measurement differences, one-off modifications to existing scales and a lack of adequate justification may partially explain why studies in the entrepreneurship education domain have produced inconsistent results. We address this limitation by performing factor analytic techniques on data from two sets of English-speaking university students from two North American countries. The result is a more parsimonious and streamlined ‘mini-Kolvereid’ scale. We further demonstrate that this scale is an effective predictor of entrepreneurial intentions.