The Role of Managerial Stock Option Programs in Governance: Evidence from REIT Stock Repurchases

This article examines the role of stock option programs and executive holdings of stock options in real estate investment trust (REIT) governance. We study the issue by analyzing how the market reaction to a stock repurchase announcement varies as a function of the individual REIT's governance structure. In particular, we examine how executive and employee stock option holdings influence the market reaction to a firm's announcement of a stock repurchase. Using a sample of REIT repurchase announcements, we find that the market reacts more favorably to announcements by firms where executives have larger option holdings and the chief executive officer is not entrenched. Our results with respect to the roles of stock option holdings of executives and nonexecutives differ from those reported for a cross-section of non-REIT firms. While we find evidence supporting the importance of executive stock options in aligning the incentives of management and reinforcing the positive signaling associated with a repurchase announcement, we find little evidence that the market views REIT repurchases as being used primarily to fund option exercise. We attribute these findings to greater dependence by REIT investors on internal governance mechanisms (such as stock option programs) as a result of regulatory restrictions that limit external monitoring such as hostile takeovers.     

The effect of CEO ownership on the information content of reported earnings

This paper examines the relation between capital market perceptions of earnings quality and CEO equity ownership. Using the earnings response coefficients (ERCs) from annual returns–earnings regressions as a proxy for investor perceptions of earnings quality, we find that ERCs first increase and then decline across higher levels of CEO ownership with an inflection point around 25% ownership. Using analyst behavior as another proxy for the perceptions of financial analysts, we find that earnings forecasts are more accurate as ownership increases, but once ownership levels reach about 25%, accuracy declines with further increases in ownership. Forecast dispersion, forecast revision volatility, and analyst following decline and then increase across increasing levels of CEO ownership. Our results suggest that, for low levels of CEO ownership, earnings are perceived as being more informative about future firm performance as ownership increases. However, once ownership levels are high, earnings are perceived as being less informative with further increases in ownership.     

Uncertainty,economic growth its impact on tourism,some country experiences

This paper investigates in a time series framework over the period 1995 to 2016, the impact of uncertainty on tourism. The paper explores the causal association of both political uncertainty and economic uncertainty between tourism and other macroeconomic variables for the countries of France, Greece, and the United States. The political uncertainty is proxied through terrorism index and the economic uncertainty is explained through the Economic Policy Index. The unit root test and the ARDL cointegration are applied for unknown structural breaks. In the long run uncertainty adversely affects the tourism industry in all the countries under study.     

Hospitality managers' importance perceptions of human resource practices related to employment of foreign workers in the United States

ABSTRACT

Cross-border labor mobility of hospitality employees has resulted in an increase in illegal immigrants in the workforce. The purpose of this study was to generate a list of top legal issues associated with the employment of foreign workers in the U.S. hospitality industry and to identify factors defined by the importance ratings of these issues. Snowball sampling was used to collect data from hospitality managers. Findings reveal that respondents perceive document verification to be important but may not perceive knowledge of various visa types and employment termination reporting procedures associated with employing foreign workers to be important. Managerial implications are discussed.     

R&D in Indian manufacturing enterprises: what shapes it?

The article examines the factors influencing research and development (R&D) in manufacturing entities. Using data on a large sample of companies for the period 1995–2007, the finding indicates that large companies have a higher probability of pursuing R&D, although with lower intensity. In terms of magnitudes, a 10% increase in firm size raises R&D intensity by roughly 0.6%. Both the intensity and the probability of undertaking R&D initially declines for older firms. Outward orientation, and especially foreign currency earnings, has a significant bearing on R&D efforts. R&D efforts are also found to vary significantly across firm ownership.     

STRATEGIC RULES ON SPECULATION IN THE FOREIGN EXCHANGE MARKET

In this article we specify the conditions for profitable speculaion in the foreign exchange market with spot and forward contracts. We derive the unique strategic rules from the initial two‐choice situations in a given environment. Finally, in a more complex structure involving covered arbitrage, speculative profits are computed with iterative plays. JEL classification: F310     

HEDGING WITH INTERNATIONAL STOCK INDEX FUTURES: AN INTERTEMPORAL ERROR CORRECTION MODEL

In this paper we extend the traditional price change hedge ratio estimation method by applying the theory of cointegration to hedging with stock index futures contracts for France (CAC 40), the United Kingdom (FTSE 100), Germany (DAX), and Japan (NIKKEI). Previous studies ignore the last period's equilibrium error and short-run deviations. The findings of this study indicate that the hedge ratios obtained from the error correction method are superior to those obtained from the traditional method as evidenced by the likelihood ratio test and out-of-sample forecasts. Using the procedures developed in this paper, hedgers can control the risk of their portfolios more effectively at a lower cost.