Finance

 

Recent Submissions

  • Högholm, Kenneth (Canadian Center of Science and Education, 2016)
  • Ahmed, Sheraz; Hussain, Mujahid (M.E.Sharpe, 2014)
    This paper examines the impact of bilateral political and military news on the returns and volatility of the stock markets of India and Pakistan. Our results show that the volatility of both stock markets shows a significant reaction on the arrival of the news related to military aggression in a reciprocal way. Moreover, while the Indian stock market’s volatility seems to show a subdued response to bilateral political news, the Pakistani stock market appears to be sensitive to both political and military news originating from either country. The relatively stronger impact of military events can be attributed to a higher financial cost of confrontation between two countries.
  • Brunzell, Tor; Liljeblom, Eva (Emerald Group Publishing Ltd, 2014-08)
    ´Purpose – The purpose of this paper is to survey chairmen’s perceptions of female board representation in five Nordic countries, focusing on whether the chairman’s perception of board work is related to gender diversity, and on differences between high- and low-risk firms. Design/methodology/approach – The authors combine data from a questionnaire directed to the chairmen of the boards in Nordic listed companieswith data on firmcharacteristics and board composition. Findings – The authors find that the chairmen (97.5 percent male) are significantly less satisfied with female board members as compared to male ones. The authors also find that firms with nomination committees have more gender diverse boards, as well as indications of a more positively perceived contribution of female representation in high-risk firms. Research limitations/implications – The study is restricted to perceptions of chairmen for listed Nordic firms. The low response rate of 20.1 percent is a severe limitation. Practical implications – The increasing practice of using nomination committees in the Nordic countries seems advantageous from gender balance perspective. Originality/value – The authors contribute to the literature on gender diversity in boards by providing results from a board intern perspective. Keywords Diversity, Board of directors, Board effectiveness, Gender minority Paper type Research paper
  • Brunzell, Tor; Liljeblom, Eva; Löflund, Anders; Vaihekoski, Mika (Elsevier BV * North-Holland, 2014-08)
    In this paper we analyze the results from a survey among all publicly listed Nordic firms on their dividend payout policy. The results show that 72% of the Nordic companies have a specified dividend policy. Larger andmore profitable companies aremore likely to have a defined dividend policy in place. The dividend policy is mostly influenced by capital structure considerations and the outlook of future earnings. We also find that the likelihood for a firm having an explicit dividend policy is positively related to ownership concentration as well as to the presence of large long-term private or industrial owners. Our results support the use of defined dividend policies for agency or monitoring reasons rather than signaling reasons.
  • Brunzell, Tor; Liljeblom, Eva; Vaihekoski, Mika (Wiley-Blackwell Publishing Asia, 2013-03-18)
    We study the determinants for the choice of capital budgeting methods and the setting of hurdle rates (WACCs) in five Nordic countries. Combining survey data with a rich set of determinants, including ownership data, CFO characteristics, and financial data, we find that the use of the Net Present Value method and the sophistication of the capital budgeting are related to firm characteristics, vari- ables proxying for real option features in investments and CFO characteristics (age and education). We also find support for significantly higher hurdle rates than motivated by economic theory. The premium is weakly positively related to managerial short-term pressure and strongly negatively related to the sophistica- tion level of the firm’s capital budgeting.
  • Dijk, Oege; Holmén, Martin; Kirchler, Michael (Elsevier BV * North-Holland, 2014)
    Tournament incentives schemes have been criticized for inducing excessive risktaking among financial market participants. In this paper we investigate how relative performance-based incentive schemes and status concerns for higher rank influence portfolio choice in laboratory experiments. We find that both underperformers and over-performers adapt their portfolios to their current relative performance, preferring either positively or negatively skewed assets, respectively. Most importantly, these results hold both when relative performance is instrumental for higher payoffs in a tournament and when it is only intrinsically motivating and not payout-relevant. We find no effects when no relative performance information is given.
  • Holmén, Martin; Nivorozhkin, Eugene; Rana, Rakesh (Routledge (Taylor & Francis), 2014)
    In this paper we use Heckman selection models to analyse the relation between the likelihood of the firm becoming a takeover target, the takeover premium, and the use of anti-takeover devices. Ordinary least squares regressions suggest that anti-takeover devices, especially dual class shares, are associated with a higher takeover premium. However, we also document that anti-takeover devices reduce the likelihood that the firm will be taken over. When we control for the fact that takeover targets are selected, we do not find a significant relation between the takeover premium and dual class shares. Hence, our results suggest that the takeover premium is indeed influenced by private information about the likelihood of takeover.
  • Holmén, Martin; Nivorozhkin, Eugene (John Wiley & Sons, 2012)
    In this paper, we test whether the determinants of block trade and non-partial tender offer probabilities differ and whether the relative magnitude of security and private benefits can explain the choice of transfer mode. We investigate the Swedish market for corporate control. The results emphasize the importance of investigating block trades and tender offers as two competing events. The proxies for private benefits of control, small controlling voting blocks, and separation of voting rights from cash flow rights are positively related to the likelihood of a block trade but negatively related to the likelihood of a non-partial tender offer. Our results suggest that separation of voting rights from cash flow rights might limit the efficiency of the market for corporate control. The prevalence of block trades in the presence of greater private benefits of control highlights the disadvantages of this control transfer mode in terms of incentive alignment between the buyer and the remaining dispersed shareholders.
  • Holmén, Martin; Wang, Peng (M.E.Sharpe, 2015)
    This paper investigates Initial Public Offerings (IPOs) of high-tech firms on the Chinese Growth Enterprise Market (GEM). Almost half of the GEM IPOs are set up in pyramid structures. The likelihood of a pyramid structure increases with the size of the IPO firm and state control. Our results do not suggest that pyramids are set up to overcome financial constraints. However, we document that pyramid IPOs are discounted before the IPO. The subscription price to book ratio is significantly lower for pyramid IPOs and this translates into higher underpricing. We conclude that IPO investors demand a higher risk-premium when investing in pyramid IPOs.
  • Kuosmanen, Petri; Nabulsi, Nasib; Vataja, Juuso (Elsevier BV * North-Holland, 2014)
  • Korkeamäki, Timo; Rainio, Elina; Takalo, Tuomas (Wiley-Blackwell Publishing, 2013-07)
  • Korkeamäki, Timo; Takalo, Tuomas (John Wiley & Sons Ltd, 2013)
  • Korkeamäki, Timo; Michael, Timothy (Wiley-Blackwell Publishing, Inc, 2013-07)
  • Korkeamäki, Timo; Pöyry, Salla Fanny Helena; Suo, Maiju (Elsevier BV * North-Holland, 2014)