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After-Hours Block Trading, Short Sales, And Information Leakage: Evidence From Korea
Full text linkWe investigate the impact of insider trading in after-hours block market on stock price and short sales volume, before and after the trading becomes public information. During pre-announcement period, positive (negative) abnormal stock return is generated when insiders buy (sell) their shares but does not when quasi-insiders trade, implying that stock price reflects long-lived private information of corporate governance structure. The impact is most prominent when ownership shares are transferred to (from) corporate insiders. In contrast, short sales volume generally does not depend on the identity of block holders. Short sales volume has a negative correlation with abnormal stock return only during the transaction date, indicating that a short-sale decision of tippees is based on their sole expectation on instantaneous stock returns. We also find evidence that insiders select the timing of their trades with respect to maximizing their realized profits or minimizing their purchasing costs.
Africa Stock Markets Cross-Market Linkages: A Time-Varying Dynamic Conditional Correlations (DCC-GARCH) Approach
Full text linkThis article investigates stock return volatility and contagion among the five African countries (Zimbabwe, South Africa, Egypt, Kenya, and Nigeria) and the United States of America for the period between 1998 and 2015. Engle (2002)’s Dynamic Conditional Correlation multivariate generalized autoregressive conditional heteroscedasticity model was adapted to explore the time-varying conditional correlations to capture the contagion behavior of these financial markets over time. In this article the researchers observes that South African Stock returns are highly correlated to NYSE stock returns and the coefficients are significant for all periods under consideration. Additionally, the South African stock returns are significantly negatively related to Zimbabwean stock returns. An analysis of correlation confirms what most scholars found, that the correlations amongst markets tend to increase during the time of crises and weaken during periods of stability with an exception of Egypt whose results indicate an insignificant negative correlation during the 2007/9 crisis. It is recommended that future research in this area should focus on the potential contagion mechanisms between African countries and European countries especially looking at what transpired during and after the sovereign debt crisis.
Modelling How Managers Support Their Subordinates Toward Environmental Sustainability: A Moderated-Mediation Study
Full text linkThis study examines the linkages between managerial support for the environment, employee environmental commitment, perceived behavioral control, and employee propensity to recycle. Using a convenience sample (N = 142), we report that employee environmental commitment mediates the relationship between managerial support and propensity to behave eco-friendly. Additionally, we showed that perceived behavioral control moderates the relationship between employee environmental commitment and propensity to recycle.
Stock Market Liquidity And Dividend Policy In Korean Corporations
Full text linkThe liquidity hypothesis predicts a negative relationship between stock liquidity and dividend payout propensity, i.e., a firm will decide to pay dividends to compensate for the liquidity demand of investors. This study comprehensively examines whether the liquidity hypothesis applies to the sample of Korean firms listed in the KOSPI and KOSDAQ markets. The main results of this paper are as follows. First, the dividend policy in Korean firms does not support the liquidity hypothesis, contradictory to the existing empirical studies. Next, the explanatory power of the liquidity hypothesis is even weaker for the KOSDAQ market, inconsistent with international evidence. Finally, even when we focus on the firm-year observations with non-negligible dividend payments, the liquidity hypothesis does not explain the dividend policy of Korean firms either. Our findings significantly contribute to the literature by robustly confirming the very limited role of the liquidity hypothesis for Korean financial markets.
Transformational Leadership Potential At A University Of Technology
Full text linkIn South Africa as elsewhere in the world, higher education institutions have been criticised for a lack of transformation. This apparent lack of transformation called into question the capability of the leaders within these institutions to effectively lead change and transform the higher education institutional landscape. The aim of this study was to explore the transformational leadership competency potential amongst managers in a university of technology in South Africa. The measures of potential used are eight competency factors known as the ‘Great Eight’ (Bartram, 2005) derived from Occupational Personality Questionnaire (OPQ32) scale scores. The OPQ32r was administered to 111 managers within a university of technology. The majority of respondents had a balanced mix of styles between a transformational and transactional focus. These leaders not only exhibit less transformational competencies but also an insufficient strong transactional focus. These findings have severe implications for the transformation of
High-Performance Work Systems And Firm Performance: Moderating Effects Of Organizational Communication
Full text linkThis study examines the relationship between high-performance work systems (HPWS) and organizational performance and how the relationship differs by type of communication within organizations. Using data on publicly traded manufacturing firms in Korea from the Human Capital Corporate Panel survey, we find that HPWS are positively related to organizational performance, and importantly, this relationship varies by the level of vertical and horizontal communication. The positive effect of HPWS on organizational performance is more apparent when vertical and horizontal communications are relatively high. These results emphasize the role of internal communication as an important organizational context for the implementation of HPWS
The Effect Of Affiliate Loan Guarantees On Cost Of Debt: Evidence From Korea
Full text linkA loan guarantee occurs when a company guarantees payment of an affiliate’s loan. Conflicting arguments regarding loan guarantees provided to affiliates have prevailed. First, some suggest that loan guarantees provided to affiliates would decrease firm value because they are contingent liabilities (Shim, 1996; Berkman, Cole & Fu, 2009). Second, others suggest firm value is high when the amount of loan guarantees provided to affiliates is large because loan guarantees would be regarded as a positive indicator of future cash flow (Lee, 2005). The purpose of this study was to present additional empirical evidence of these arguments.
The result of this study showed that cost of debt is high when the amount of loan guarantees provided to affiliates is large. This result indicates that creditors demand higher risk premiums when the amount of loan guarantees provided to affiliates is large because they regard loan guarantees as contingent liabilities. Therefore, this result supports the assertion that loan guarantees decrease firm value
Corporate Social Responsibility And Tax Avoidance: Evidence From Korean Firms
Full text linkThis study examines the relationship between corporate socially responsible (CSR) activities and tax avoidance using residual book-tax differences (BTD), year residual BTD and total BTD. Using a sample of 1,148 publicly listed Korean firms on Korean Stock Exchange (KSE) covering periods between 2004 and 2009 it finds that the firms with higher CSR activities are less likely to avoid taxes regardless which proxy of tax avoidance is used. This finding is confirmed with two stage least square (2SLS) method after accounting for endogeneity of CSR. It also tests how seven different CSR activities affect tax avoidance, and finds that social services, satisfaction of employees and contributions to economic development are negatively related to tax avoidance. Overall, the empirical results of this paper support the previous studies arguing the negative relationship between tax avoidance and CSR
Debt Maturity And Investment Efficiency Evidence From Korea
Full text linkThis study empirically analyzes the effect of debt maturity on investment efficiency, which is measured by using McNichols and Stubben (2008). Debt maturity is measured using current debt ratio and dummy variable. Specifically, we will investigate how short-term debt affects investment efficiency. Additionally, we will investigate the relation between the short-term debt affects investment efficiency according to debt maturity group.
The results of this study are as follows. First, the short-term debt and investment efficiency were significantly positive (+) in both the total sample and the over-investment sample. Second, as a result of analyzing the maturity of debt by group according to the current debt ratio, the relationship between earnings quality and investment efficiency was significantly positive (+) in the short-term debt group. it is suggested that debt maturity and investment efficiency can be different for the total sample, over-investment sample, under-investment sample, and the relationship between earnings quality and investment efficiency can be differentiated by debt maturity group.
This study has following additional contributions in comparison with domestic prior studies related to investment efficiency. First, prior studies related to investment efficiency are mainly concerned with the quality of financial reporting. This study implies that the relationship between investment efficiency and quality of financial reporting, and the relationship between debt maturity and investment efficiency among the characteristics of debt. Second, from the results of the analysis of the debt maturity and investment efficiency, it is confirmed that the debt is operating as a mechanism to monitor the investment efficiency of the corporation. Third, the analysis of debt maturity group suggests that the relationship between earnings quality and investment efficiency may be differentiated by short and long debt levels during debt financing.
The limitations of this study are as follows. First, we might have not considered omitted other variables. Second, we might not have fully considered other proxies for the characteristics of the debt maturity and investment efficiency. Third, there may be a measurement error in the quality of earnings and investment efficiency. Finally, the relationship between debt maturity and investment efficiency can vary depending on the circumstances of the company. For example, specific debt contract provisions or national regulatory environment. Therefore, attention should be paid to the generalization of the results of this study
Effect Of Constraints On Perceived Business Success Of Rural Entrepreneurial Activities: A Case Of Two Rural Municipalities
Full text linkThis study aims to evaluate the effect of selected entrepreneurial constraints on the perceived business success of small businesses. In this study the dependent variable, perceived business success is measured by two variables; business growth and existence of human capital. A 7 Likert scale structured questionnaires anchored on “1” strongly disagree and “7” strongly agree is used to source data from entrepreneurs. The convenience and snowball technique were used to source 300 entrepreneurs from the target population for data. Reliability of the measuring instrument was possible through the Cronbach alpha while the questionnaire was piloted for conceptual realities. In this study, the precise and individual constraints were operationalized as independent variables. Relationships between the independent variables and the perceived business success as dependent variable were investigated through multiple linear regression analysis. The outcomes of the study resolved that precise and individual constraints impact negatively on the perceived business success of small businesses and entrepreneurial activities. The findings further revealed adverse links between the independent and the dependent variable known as the perceived business success