Bank Loan Announcements and Borrower Stock Returns: Does Bank Origin Matter?

Banks play a special role as providers of informative signals about the quality and value of their borrowers. Such signals, however, may have a quality of their own as the banks' selection and monitoring abilities may differ. Using an event study methodology, we study the importance of the geographical origin and organization of the banks for the investors' assessments of firms' credit quality and economic worth following loan announcements. Our sample comprises 986 announcements of bank loans to US firms over the period of 1980–2003. We find that investors react positively to such announcements if the loans are made by foreign or local banks, but not if the loans are made by banks that are located outside the firm's headquarters state. Investor reaction is, in fact, the largest when the bank is foreign. Our evidence suggest that investors value relationships with more competitive and skilled banks rather than banks that have easier access to private information about the firms. These results are applicable also to the European markets where regulatory and economic borders do not coincide and bank identities and reputation seem to matter a great deal.     

Trends in the internationalization of grocery retailing: the European experience

The three traditional views of retail internationalization involve the diffusion of retail concepts, operational involvement in foreign markets and the international- ization of a retail management function. None of these identified categories is new, but there is evidence that there is an unprecedented level of interest in internationalization as a viable strategic option for retailers. This paper examines these themes within die grocery sector in Europe, through an empirical investigation of activity in the post-war period.     

A Framework for Managing the Biophysical Effects of Tourism on the Natural Environment in New Zealand

Tourists in New Zealand often impact on the natural environments that are the very reason for their visits. It is, therefore, necessary to manage those natural environments to help ensure that tourism is an environmentally sustainable activity. To assist that management process, it is helpful to establish an overarching classification framework so that consistent guidelines and environmental performance standards can be applied. This paper describes a framework for management of the biophysical impacts of tourism using a natural environment classification of the assets visited by tourists. 'Best available information' is then used to develop indicators of environmental change and associated guidelines for management at a range of levels. As a minimum, broad guidelines can be developed for the upper levels of each component of the classification. More detailed and site-specific guidelines are available in some circumstances, where appropriate research has been undertaken. Ongoing evaluation of the combination of indicators and guidelines establishes if the natural attraction is being sustainably managed. The system has been applied to 'scenic icons', wildlife attractions and caves on the West Coast of the South Island.     

The characteristics and business impact of children’s electronic word of mouth in marketing communications

Abstract

Leading digital technology companies have shown a strong interest in enabling children to send electronic word of mouth (eWOM). Recasting children from passive to active participants in marketing communications, this shift expands children’s marketing practices from how companies influence children via traditional marketing communications, to how children influence companies’ marketing practices through eWOM. We apply the value-capacity-vulnerability framework for children’s expressive rights to the context of children’s eWOM. Using a dataset of Amazon customer reviews written by children under the age of 13, we examine the characteristics and business impact of children’s eWOM. We find that the volume and variance of children’s eWOM are smaller than that of adults’. Children’s eWOM increase the overall diversity of opinions. Although receivers perceive children’s eWOM as less helpful, children’s eWOM valence (i.e. average rating) correlates with that of adults’. Children’s eWOM volume has a product-category-dependent association with product sales: positively in children’s product categories, while negatively in general categories. Children’s eWOM valence and variance are positively associated with product sales in both product categories. Receivers are less likely to criticize children’s eWOM compared to that of adults’, suggesting an underlying protective behaviour towards children among eWOM receivers. These results show that children have the capacity to engage in eWOM of social and business value, with receivers typically mindful of children’s vulnerability in social interactions.     

Financial well-being amongst elderly Australians: the role of consumption patterns and financial literacy

Consumption behaviour and financial literacy are primary factors in determining the financial well-being of retirees. This paper uses an existing financial literacy index to examine how financial literacy directly, and via an interaction with consumption patterns, affects elderly Australians’ financial well-being. We find that most elderly Australians hold an optimistic attitude towards their financial situation, and those who are relatively older, more educated, healthier and outright homeowners are more likely to report higher levels of financial well-being. Financial literacy significantly improves financial well-being. It also helps strengthen the positive effects of meeting more of non-essential consumption needs on financial well-being.     

Taxable income,future profitability,and stock returns

Prior research suggests that investors behave ‘as if’ taxable income contains information about future performance by providing evidence of a positive association between taxable income and stock returns. We draw on the fundamental analysis literature and provide direct evidence on this assertion by examining whether taxable income predicts future pretax performance. We find that taxable income positively predicts future pretax cash flows, pretax book income, and ‘Street’ pretax earnings, suggesting that taxable income provides incremental information to book income regarding performance. Moreover, we find a positive association between taxable income and analysts’ pretax forecasts, consistent with analysts utilizing the information in taxable income when forming earnings expectations. We do not find an association between taxable income and future analyst forecast errors, implying analysts do not overreact or underreact to taxable income's performance signal. Overall, we find that taxable income provides a signal of fundamental value and corroborate the implications of prior research.