Dividends versus Share Repurchases Evidence from Canada: 1985–2003

This paper provides out-of-sample evidence on the payout policy in Canada during the 1985–2003 period. First, we show that the proportion of nonfinancial firms paying dividends has decreased, while the proportion initiating repurchase programs has increased. We also show that Canadian firms paying dividends and repurchasing shares are extremely concentrated. Second, we focus on the factors that could affect the choice between repurchases and dividends. We find that dividends and repurchases are used by different types of firms. While we do not confirm the financial flexibility hypothesis, our results are consistent with the substitution hypothesis after controlling for selection bias and endogeneity.     

The evolution of trade credit: new evidence from developed versus developing countries

Review of Quantitative Finance and Accounting - Using a large sample of listed firms from 72 countries over the period 1990–2019, we document a marked decrease in trade credit that is more...     

Firm valuation, abnormal earnings, and mutual funds flow

We examine the valuation effects of overall demand for corporate equities combined with the influence of abnormal earnings and unexpected funds flow. Our results indicate that the expected and unexpected net new total flow of funds into all stock mutual funds do not by themselves have a meaningful effect on firm equity valuation. However, we find the combination of unexpected funds flow and realized abnormal earnings have significant and important valuation effects. Importantly, the valuation impact is greatest for those firms with high earnings growth potential that also operate in an environment characterized by high information asymmetry.

Risk and a changing environment for Antarctic tourism

This research note explores the issues of perceptions of risk and a changing environment for Antarctic tourism. A pilot study was undertaken aboard an Antarctic cruise ship in February 2008 with the purpose of examining the views of passengers about risk and environmental change in light of the recent sinking of the Explorer and the growing awareness of climate change effects in polar regions.     

Methodology for increasing the adoption of R & D project selection models

Although some studies and experiences have shown that R & D project selection models can be potentially useful decision aids, their adoption and routine use is not widespread. This lack of usage may be a consequence of the lack of attention which model builders have traditionally given to the prevailing adoption attitudes of R & D managers. A design methodology centering around the measurement of adoption attitudes has been developed and used by the authors. The methodology consists of procedures for analyzing the organizational climate relative to project selection model usage, developing an acceptable model form relative to the organizational climate, and inducing the adoption of this model form within the climate. Three case applications of the methodology are described in which negative-to-positive shifts in adoption attitudes occurred and project selection models were adopted for long-term use. These results indicate that the use of this general methodology may lead to increased formal adoption and widespread usage of project selection model forms in R & D.     

Fish: Friend or foe? Food policy and subpopulation warnings for consumers

Fish is a healthy food that provides valuable nutrients for heart health and cognitive development. However, for some subpopulations, consuming fish containing higher levels of methylmercury may pose a health risk. This research seeks to identify the impact of including a seafood warning disclosure in the advertisement of a can of tuna fish on consumers’ purchasing behaviors. An experimental survey is employed to examine the resulting impact for two segments of the population – those considered at risk for methylmercury overexposure and all others. Findings indicate the use of warning disclosures increases respondents’ negative product perceptions without significantly altering positive product perceptions. Attention to the warning is short-lived and does not significantly impact perceived healthful levels of consumption. Modeling purchase behavior using a random utility choice framework indicates that the inclusion of a warning in an advertisement of a can of tuna fish has no adverse affect on purchase behaviors for the population not at-risk and may, in certain cases, serve to decrease tuna purchase likelihood for “at-risk” respondents. Communicating advisory statements on healthy products, such as fish, creates a public health challenge; message pre-testing is imperative.     

The Impact of Forest Certification on Firm Financial Performance in Canada and the U.S.

The purpose of this article is to examine empirically the impact of environmental certification on firm financial performance (FP). The main question is whether there is a “green premium” for certified firms, and, if so, for what kind of certification. We analyze the short-run and the long-run stock price performance using an event-study methodology on a sample of Canadian and U.S. firms. The results of short-run event abnormal returns indicate that forest certification does not have any significant impact on firm FP regardless of the certification system carried out by firms. Unlike the short-run results, the long-run post-event abnormal returns suggest that forest certification has, on average, a negative impact on firm FP. However, the impact of forest certification on firm FP depends on who grants the certification, since only industry-led certification (Sustainable Forestry Initiative, Canadian Standards Association and ISO14001) are penalized by financial markets, whereas non-governmental organizations–led Forest Stewardship Council certification is not.     

Real and Monetary Determination of the Egyptian Real Exchange Rate

Abstract: The purpose of this paper is twofold. First, the question of whether the equilibrium condition of Purchasing Power Parity (PPP) holds is investigated using Egyptian data between 1970(1) to 1990(4). Second, the role played by real and monetary variables on the Egyptian real exchange rates appreciation is also analyzed. The results of this paper suggest that PPP does not hold and that monetary expansion, capital controls, the increase in government consumption and terms of trade deterioration played a key role in the growing Egyptian real exchange rate appreciation. Résumé: Cet article comporte deux volets. Il évalue d'abord l'importance dc la condition d'équilibre que constitue la parité du pouvoir d'achat (PPA), en utilisant les données égyptiennes des années 1970 (1) a 1990 (4). Il analyse ensuite l'influence des variables réellcs et monétaires sur l'appréciation des taux de change réels en Egypte. Les conclusions de cette double analyse font croire que la PPA n'est pas un factcur déterminant et que l'expansion monétaire, les mesures de régulation des capitaux, l'accroissement de la consommation publique et la détérioration des termes de l'échange ont joué un rôle clé dans l'appréciation du taux de change réel en Egypte.