scholarly journals The Impact of Goodwill Recognition and Goodwill Impairment on the Increasing Holdings of Block Shareholders

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Xiaofang Tan ◽  
Xin Ge ◽  
Qinghua Liu ◽  
Zhengjun Yuan
Keyword(s):  
Private Information ◽  
Stock Prices ◽  
Stock Price ◽  
State Ownership ◽  
Positive Relation ◽  
Significant Relation ◽  
Goodwill Impairment ◽  
Abundant Evidence ◽  
Future Expectation ◽  
The Impact

There is a large amount of goodwill recognition and goodwill impairment. These characteristics would trigger stock price fluctuation. Hence, stakeholders will increase holdings to mitigate the volatility of stock prices. According to the data in regard to the Chinese A-share nonfinancial listed companies from 2007 to 2020, we study the reaction of block shareholders after goodwill recognition and goodwill impairment, respectively. Our findings are as follows: (1) goodwill recognition leads to increasing holdings of block shareholders; (2) goodwill impairment also leads to increasing holdings of block shareholders when there is a large amount of goodwill impairment. We also take state ownership into consideration: compared to state-owned firms, private firms show a much stronger positive relation between goodwill recognition and level of increasing holdings of block shareholders, but there is no significant relation between goodwill impairment and increasing holdings of block shareholders in state-owned firms. These empirical results provide us with abundant evidence that block shareholders would increase shareholdings when there is goodwill recognition due to private information of positive future expectation in M&A. Meanwhile, block shareholders would stabilize stock price via increasing shareholdings when goodwill is impaired.

scholarly journals Financial Literacy and Stock Price Informativeness: a Cross-Country Study

2018 ◽  
Vol 63 (1) ◽  
pp. 63-72
Author(s):  
Anita Todea
Keyword(s):  
Private Information ◽  
Stock Prices ◽  
Financial Literacy ◽  
Stock Price ◽  
Individual Investors ◽  
Specific Information ◽  
Price Informativeness ◽  
Stock Price Informativeness ◽  
The Individual ◽  
The Impact

Abstract This paper examines the impact of financial literacy on stock price informativeness in a sample of firms from 20 countries. Using four measures of stock price informativeness, we find a significant relationship between higher financial literacy and higher stock price informativeness. The individual investors’ contribution regarding the incorporation of specific information into stock prices includes private information also and not mere specific information in the general sense. Financial knowledge is the key element that helps individual investors to incorporate specific information into stock prices.

scholarly journals Culture and Stock Price Reaction to Private Information

2018 ◽  
Vol 11 (1) ◽  
pp. 117-130
Author(s):  
Anita Todea
Keyword(s):  
Private Information ◽  
Stock Prices ◽  
Stock Price ◽  
Financial Openness ◽  
Price Informativeness ◽  
Stock Price Reaction ◽  
Stock Price Informativeness ◽  
Developed Stock Markets ◽  
The Impact ◽  
Low Uncertainty

AbstractThis paper examines the impact of culture on stock price informativeness in a sample of firms from 23 developed stock markets. We find that the information content of private information in stock prices is higher in more individualistic countries and in low uncertainty-avoiding countries. Moreover, financial openness stimulates the incorporation of private information into individualistic countries and in low uncertainty-avoiding countries.

The Impact of Analyst Following on Stock Prices and the Implications for Firms' Disclosure Policies

1996 ◽  
Vol 11 (3) ◽  
pp. 333-354 ◽  
Author(s):  
Brett Trueman
Keyword(s):  
Private Information ◽  
Stock Prices ◽  
Direct Consequence ◽  
Share Price ◽  
Positive Relation ◽  
Analyst Following ◽  
Market Participants ◽  
Precision Level ◽  
Informed Traders ◽  
The Impact

This paper shows that there is a positive relation between the number of analysts following a firm and the firm's expected share price. This relation is a direct consequence of market participants' inability to observe the number of informed traders in the market. It is further shown that a firm's manager can have an impact on analyst following by varying the precision of the private information analysts obtain about the firm. In equilibrium, the manager will choose a precision level greater than that which maximizes analyst following, but, in many cases, less than its largest possible value.

Analysts' Information Acquisition and Stock Price Synchronicity: A Regulatory Perspective from China

2018 ◽  
Vol 33 (1) ◽  
pp. 153-179 ◽  
Author(s):  
Haiyan Jiang ◽  
Donghua Zhou ◽  
Joseph H. Zhang
Keyword(s):  
Insider Trading ◽  
Private Information ◽  
Stock Prices ◽  
Information Acquisition ◽  
Stock Price ◽  
Specific Information ◽  
Stock Price Synchronicity ◽  
Playing Field ◽  
Information Advantage ◽  
Private Information Acquisition

SYNOPSIS Against the backdrop of the Chinese Directive 40 (China's Reg FD) issued in 2007 as an attempt to curb insider trading and to level the information playing field, this study investigates whether analysts' private information acquisition influences the extent to which firm-specific information is impounded into stock prices, i.e., stock price synchronicity, and how the restrictions on selective disclosures imposed by Directive 40 have shaped the relationship between analyst information acquisition and synchronicity. Using a pre-Directive 40 sample, we show that synchronicity is negatively related to analysts' private information acquisition, which provides support for the “information advantage” argument of analysts' information production. However, the ability of analysts' private information acquisition in improving firm-specific information incorporated into stock price is mitigated post-Directive 40 due to a restriction on selective disclosures and/or private communication. Moreover, we find that this regulatory impact varies for firms being followed by affiliated analysts versus non-affiliated analysts. JEL Classifications: G14; G15; G17; G18.

scholarly journals Building stock market resilience through digital transformation: using Google trends to analyze the impact of COVID-19 pandemic

2020 ◽  
Vol 14 (1) ◽  
Author(s):  
Ding Ding ◽  
Chong Guan ◽  
Calvin M. L. Chan ◽  
Wenting Liu
Keyword(s):  
Stock Market ◽  
Stock Prices ◽  
Stock Price ◽  
Digital Transformation ◽  
Google Trends ◽  
Building Stock ◽  
Market Sentiment ◽  
Price Performance ◽  
Novel Coronavirus ◽  
The Impact

Abstract As the 2019 novel coronavirus disease (COVID-19) pandemic rages globally, its impact has been felt in the stock markets around the world. Amidst the gloomy economic outlook, certain sectors seem to have survived better than others. This paper aims to investigate the sectors that have performed better even as market sentiment is affected by the pandemic. The daily closing stock prices of a total usable sample of 1,567 firms from 37 sectors are first analyzed using a combination of hierarchical clustering and shape-based distance (SBD) measures. Market sentiment is modeled from Google Trends on the COVID-19 pandemic. This is then analyzed against the time series of daily closing stock prices using augmented vector autoregression (VAR). The empirical results indicate that market sentiment towards the pandemic has significant effects on the stock prices of the sectors. Particularly, the stock price performance across sectors is differentiated by the level of the digital transformation of sectors, with those that are most digitally transformed, showing resilience towards negative market sentiment on the pandemic. This study contributes to the existing literature by incorporating search trends to analyze market sentiment, and by showing that digital transformation moderated the stock market resilience of firms against concern over the COVID-19 outbreak.

scholarly journals Optimal feedback control of stock prices under credit risk dynamics

2021 ◽  
Author(s):  
Jinghai Shao ◽  
Sovan Mitra ◽  
Andreas Karathanasopoulos
Keyword(s):  
Credit Risk ◽  
Stock Prices ◽  
Stock Price ◽  
Global Financial Crisis ◽  
Optimal Feedback Control ◽  
Dynamic Programming Principle ◽  
Price Model ◽  
Managerial Control ◽  
Optimal Feedback ◽  
The Impact

AbstractIn this paper we provide a stock price model that explicitly incorporates credit risk, under a stochastic optimal control system. The stock price model also incorporates the managerial control of credit risk through a control policy in the stochastic system. We provide explicit conditions on the existence of optimal feedback controls for the stock price model with credit risk. We prove the continuity of the value function, and then prove the dynamic programming principle for our system. Finally, we prove the Viscosity Solution of the Hamilton–Jacobi–Bellman equation. This paper is particularly relevant to industry, as the impact of credit risk upon stock prices has been prominent since the commencement of the Global Financial Crisis.

scholarly journals The Impact of COVID-19 on the Stock Price of Socially Responsible Enterprises: An Empirical Study in Taiwan Stock Market

2021 ◽  
Vol 18 (4) ◽  
pp. 1398
Author(s):  
Kuo-Jung Lee ◽  
Su-Lien Lu
Keyword(s):  
Stock Market ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Recovery Phase ◽  
Socially Responsible ◽  
Cumulative Impact ◽  
Study Approach ◽  
Price Performance ◽  
The Impact

This study examines the impact of the COVID-19 outbreak on the Taiwan stock market and investigates whether companies with a commitment to corporate social responsibility (CSR) were less affected. This study uses a selection of companies provided by CommonWealth magazine to classify the listed companies in Taiwan as CSR and non-CSR companies. The event study approach is applied to examine the change in the stock prices of CSR companies after the first COVID-19 outbreak in Taiwan. The empirical results indicate that the stock prices of all companies generated significantly negative abnormal returns and negative cumulative abnormal returns after the outbreak. Compared with all companies and with non-CSR companies, CSR companies were less affected by the outbreak; their stock prices were relatively resistant to the fall and they recovered faster. In addition, the cumulative impact of the COVID-19 on the stock prices of CSR companies is smaller than that of non-CSR companies on both short- and long-term bases. However, the stock price performance of non-CSR companies was not weaker than that of CSR companies during times when the impact of the pandemic was lower or during the price recovery phase.

Market reactions to the inclusion of people with disabilities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Claudia Araceli Hernández González
Keyword(s):  
Event Study ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
People With Disabilities ◽  
Market Reactions ◽  
Content Type ◽  
Study Methodology ◽  
Research Advance ◽  
The Impact

PurposeThis study aims to provide evidence of market reactions to organizations' inclusion of people with disabilities. Cases from financial journals in 1989–2014 were used to analyze the impact of actions taken by organizations to include or discriminate people with disabilities in terms of the companies' stock prices.Design/methodology/approachThis research is conducted as an event study where the disclosure of information on an organization's actions toward people with disabilities is expected to impact the organization's stock price. The window of the event was set as (−1, +1) days. Stock prices were analyzed to detect abnormal returns during this period.FindingsResults support the hypotheses that investors value inclusion and reject discrimination. Furthermore, the impact of negative actions is immediate, whereas the impact of positive actions requires at least an additional day to influence the firm's stock price. Some differences among the categories were found; for instance, employment and customer events were significantly more important to a firm's stock price than philanthropic actions. It was observed that philanthropic events produce negative abnormal returns on average.Originality/valueThe event study methodology provides a different perspective to practices in organizations regarding people with disabilities. Moreover, the findings in this research advance the literature by highlighting that organizations should consider policies and practices that include people with disabilities.

scholarly journals Impact of Financial Ratios on Stock Price: Evidence from Indian Listed Banks on NSE

2021 ◽  
Vol 11 (4) ◽  
pp. 5132-5144
Author(s):  
Nitish Rane ◽  
Pooja Gupta
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Banking Sector ◽  
Study Data ◽  
Capital Adequacy ◽  
Financial Ratios ◽  
Annual Reports ◽  
Earnings Per Share ◽  
Net Interest Margin ◽  
The Impact

This study aims to examine the impact of financial ratios on the stock prices of companies listed on NIFTY Bank. Nifty Bank is a sub-index of NIFTY 50 and has various listed banks included based on the criteria given by NSE. This study data has been taken from the period 2010-2019 and taken from the company annual reports. The analysis is done using panel data regression and other tests to verify the best model for the dataset. The results obtained from this study show that the capital adequacy ratio and the dividend payout ratio do not impact the stock price. In contrast, earnings per share, net NPA ratio, and basic earnings per share, net profit margin, and net interest margin exhibited a relationship with the stock price. In the Indian context, there is less research available on this topic, and the idea chosen for the study is original. Along with this, the data collected for the study and the code used for analysis is original work. New investors can use the results of this study in the Indian stock market to analyze a stock and take proper investment decisions. Another practical usage of this study is that banking sector companies can improve their ratios to attract new investors.

scholarly journals Predictability of Stock Price Fluctuations Based on Business Relationships: A Comparison of Normal and the COVID-19 Pandemic Periods in Japan

2021 ◽  
Vol 13 (18) ◽  
pp. 10146
Author(s):  
Shoma Sakamoto ◽  
Shintaro Sengoku
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Factor Model ◽  
Customer Relationships ◽  
Business Relationships ◽  
Monthly Basis ◽  
Limited Region ◽  
Stock Price Prediction ◽  
Available Information ◽  
The Impact

The stock prices of a company are significantly influenced by changes of its business relationships. However, the effectiveness of stock price prediction based on such inter-firm business relationships has been partially confirmed in limited region and/or timeframe cases. In particular, it has not been verified under highly volatile market conditions such as those caused by the COVID-19 pandemic. To address these issues, we analyzed the impact of supplier–customer relationships on stock prices in the case of the Japanese stock market using The Fama-French three-factor model and publicly available information of business relationships. The subjects were classified into two conditions—normal and COVID-19—and the stock price predictability associated with changes of stock prices of related companies for both short and long holding periods. As a result, the significance of stock price predictability was confirmed on a daily and monthly basis in the given region. In addition, specific factors including a volatile event caused by a customer company, a stock price downturn, and the company size of a customer particularly improved stock price predictability in the pandemic.

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