International Journal of Financial Studies

210 KiB

Open AccessArticle

Effect of Disproportional Voting Rights on Firm’s Market Performance: Evidence from Chinese Firms Cross-Listed on U.S. Exchanges

by Abdullah, Jia’nan Zhou and Muhammad Hashim Shah

Int. J. Financial Stud. 2017, 5(3), 19; https://doi.org/10.3390/ijfs5030019 - 08 Sep 2017

Cited by 1 | Viewed by 3196

Abstract

Dual-class firms face great criticism as it is believed that firms choose this structure to expropriate minority shareholders’ wealth. We compare market performance of Chinese dual-class firms with their single-class counterparts by constructing a list of Chinese firms cross-listed on U.S. exchanges. We find, contrary to the literature, that Chinese dual-class firms are outperforming in terms of market performance measured by Tobin’s Q, P/E ratio, and abnormal return in both subsequent years after the initial public offering (IPO). The reason for contrary results is that Chinese dual-class firms bond themselves to high U.S. standards from low local Chinese standards, and it is evident from the literature that when a firm bonds itself to high standards it shows a credible commitment towards minority shareholders’ rights, as well as focus on upright performance rather than investing in value-destroying projects and competes to survive in the market that imposes the high standards. Full article

2503 KiB

Open AccessArticle

Does Corporate Diversity Really Matter in the Plantation Sector? Empirical Evidence from a World Islamic Leading Country and Market Reaction

by Rohail Hassan and Maran Marimuthu

Int. J. Financial Stud. 2017, 5(3), 17; https://doi.org/10.3390/ijfs5030017 - 25 Aug 2017

Cited by 8 | Viewed by 5473

Abstract

The paper examines demographic and cognitive diversity at top-level management and its impact on the performance of Malaysian-listed companies (Plantation and Energy Sectors). Although many organisations aspire to be socially diverse, diversity’s consequences for organisational performance remain unclear. Do profitable firms tend to enhance board diversity or other attributes of the firm that contribute towards the firm’s financial performance? This study specifies the whole distinct mechanism and measures it independently; bridging as the demographic and cognitive diversity among the board of directors (BODs) and bonding as the firm’s financial performance. To maintain the homogeneity factor, empirical analysis is confined to two fully-fledged sectors and 125 Malaysian listed firms out of 798 firms selected on the basis of judgmental sampling during the period of 2009 to 2013. The paper applies econometrics methodology on panel data analysis and the correlation matrix to justify this phenomenon. The paper attempts to fill the gap in the existing literature, discuss the empirically diverse corporate boards with the interaction approach and its impact on firm performance (a) gender diversity and foreign participation (b) gender diversity and ethnic diversity. The empirical findings suggest that both demographic and cognitive diversity are significant predictors of a firm’s financial performance. Hence, the companies specifically belonging to plantation and energy sectors are more responsible for promoting diversity among top-level management. Full article

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6404 KiB

Open AccessArticle

Does Gold Act as a Hedge and a Safe Haven for China’s Stock Market?

by Ke Chen and Meng Wang

Int. J. Financial Stud. 2017, 5(3), 18; https://doi.org/10.3390/ijfs5030018 - 17 Aug 2017

Cited by 14 | Viewed by 5349

Abstract

This paper examines the dynamic relationships between gold and stock markets in China. Using daily gold and stock indexes data, we estimated the DCC-GARCH model for the five bear markets since 31 October 2002, and simultaneously used different segments of China’s stock markets for analysis. Our main objective was to examine the time-varying correlations between gold and stock and to check the effectiveness of gold as a hedge or a safe haven for stocks. Results showed that: (1) the dynamic conditional correlations switched between positive and negative values over the periods under study; (2) due to the increasing investment demand of gold, the hedging effect of gold on China’s stock market has strengthened remarkably. Gold acts as a safe haven for only the latest two of the five bear markets analyzed (12 June 2015–26 August 2015 and 22 December 2015–29 February 2016); and (3) for non-bear markets, gold does not offer good risk hedging. Full article

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162 KiB

Open AccessEditorial

Editorial for Special Issue “New Challenges in Asian Capital Markets”

by Nicholas Apergis and Katsuhiko Takagaki

Int. J. Financial Stud. 2017, 5(3), 16; https://doi.org/10.3390/ijfs5030016 - 02 Aug 2017

Viewed by 3054

Abstract

We are pleased to announce the Special Issue on the New Challenges in Asian Capital Markets in the International Journal of Financial Studies. The focus of papers in this Special Issue is on the future challenges and/or future developments Asian Finance. In addition, one article provides a review of the literature on certain issues in relevance to the banking and capital markets in Asia. This Guest Editor’s note synthesizes the contributing authors’ propositions and findings regarding these challenges and developments and hopes that opens new venues for future research directions. Full article

(This article belongs to the Special Issue New Challenges in Asian Capital Markets)

505 KiB

Open AccessArticle

Financial Insights from the Last Few Components of a Stock Market PCA

by Libin Yang, William Rea and Alethea Rea

Int. J. Financial Stud. 2017, 5(3), 15; https://doi.org/10.3390/ijfs5030015 - 20 Jul 2017

Cited by 4 | Viewed by 4459

Abstract

We show that the last few components in the principal component analysis of the correlation matrix of a group of stocks may contain useful financial insights by identifying highly correlated pairs or larger groups of stocks. The results of this type of analysis [...] Read more.

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Int. J. Financial Stud., Volume 5, Issue 3 (September 2017) – 5 articles

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