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Purpose The purpose of this paper is to determine if there is a link between corporate shareholder value creation and economic growth. The first objective of this paper is to determine which specific shareholder value measurement best explains shareholder value creation for a particular industry. The next objective of the study is to establish, for each of nine different categories of firms examined, a set of value drivers that are unique and significant in expressing shareholder value for that particular category of firms. Lastly, the relationship between shareholder value creation and economic growth is tested. Design/methodology/approach To quantify and measure value creation, the paper investigates the various value creation measurements that are being applied. The next step is to ascertain whether various industries have different value creation measures that best explain value creation for the respective industries. Then, the value drivers of these specific value creation measures can be determined and their relationship with economic growth tested. Findings The results of this study indicate that each industry does have a specific shareholder value creation measurement that best explains shareholder value creation for that industry; for example, for five of the nine categories (industries) that were analyzed, market value added was found to be the best shareholder value creation measurement, but for capital-intensive firms and manufacturing firms, the Qratio is the best measure, while for the food and beverage industry, the market to book ratio was found to be a better measure of shareholder value creation than other measures tested. It was further found that an increase in corporate shareholder value creation is to the detriment of economic growth. Originality/value The contribution of the present study is its determination of a unique shareholder value creation measurement for particular industries. In addition, a specific set of variables per industry that create shareholder value is identified. Lastly, the important link between shareholder value creation and economic growth is exposed.

Purpose The purpose of this paper is to identify the shareholder value creation measure best suited to express shareholder value creation for a particular industry. Design/methodology/approach The analysis was performed on 192 companies listed on the Johannesburg Stock Exchange, classified into nine different samples or industries. Five shareholder value creation measures were examined, namely market value added (MVA), a market-adjusted stock return, the market-to-book ratio, Tobin’s Q ratio, and the return on capital employed divided by the cost of equity. Findings An analysis of the nine categories of firms led to the identification of different measures that are suited to express value creation. Stock returns did not provide an appropriate value measure. Instead, depending on the specific industry, Tobin’s Q ratio, MVA, and the market-to-book ratio should be used to measure and express value creation. Practical implications For management, the value drivers identified for each industry present a clear indication of industry-specific variables upon which they can focus in operating activities to most efficiently increase shareholder value. Originality/value Unlike previous studies that use only one or two different shareholder value creation measures as dependent variables, this study uses five different value creation measures. Another contribution of this study is the compilation of a unique set of value drivers that explain shareholder value creation separately for each of the nine different categories of firms.

There is strong scientific evidence to suggest that carbon dioxide (CO 2 ) emissions are one of the key drivers of global warming. Rising CO 2 emissions across the globe have been traced back to increasing global trade and rapid industrial development powered by fossil fuels. High CO 2 emissions have had an adverse effect on the quality of life and economic growth of communities across the globe. In this study, the Granger causality approach is used to examine scientifically some causal relationships between energy consumption, CO 2 emissions, economic growth, and key macroeconomic variables (trade openness and foreign direct investment) in the panel of Financial Action Task Force (FATF) countries. FATF countries are signatories to agreements to adhere to good financial practices to ensure sustainable development of their economies. The empirical analysis was conducted for the period 1980 to 2020. Results indicate a strong endogenous relationship between the variables in the short and long run. The analysis suggests that careful co-curation of economic, trade, energy, foreign direct investment, and environmental management policies is needed to ensure sustainable economic development in the FATF countries. Global trade and foreign direct investment policies must foster new environmental-friendly industries and greater use of clean renewable energy among these countries. Graphical abstract Note : Arrows indicate direction of possible causal links between the variables.

Purpose Prior studies on determinants of shareholder value creation have reported conflicting and sometimes confusing results. In this study, to obtain more refined and industry-specific results regarding variables determining shareholder value creation, an analysis was performed focusing on different categories of firms or industries. Design/methodology/approach Two dependent and 11 independent variables were applied to five different industries to obtain the best set of significant value drivers of shareholder value creation for a particular industry. Findings Market value added (MVA) is a better indicator of shareholder value created compared to a market adjusted return. Accounting-based variables (EPS, ROA and NOPAT) are superior to economic-based variables (EVA and ROCE) in explaining shareholder value creation, but results differ, depending on the dependent variable chosen as shareholder value creation measure. For each industry, there is a unique set of variables that determine shareholder value creation; the industrial goods industry has seven significant value drivers, namely, EPS, NOPAT, ROCE, the Spread, EVA, EBEI and REVA, whilst for the food and beverages industry, there were only two significant value drivers (EPS and ROA). Originality/value These findings imply that management, analysts and shareholders should, depending on the specific industry in which their firm operates, take into account a more specific set of variables when making their financial decisions, including compensation or reward structuring.

There is strong scientific evidence to suggest that carbon dioxide (CO ) emissions are one of the key drivers of global warming. Rising CO emissions across the globe have been traced back to increasing global trade and rapid industrial development powered by fossil fuels. High CO emissions have had an adverse effect on the quality of life and economic growth of communities across the globe. In this study, the Granger causality approach is used to examine scientifically some causal relationships between energy consumption, CO emissions, economic growth, and key macroeconomic variables (trade openness and foreign direct investment) in the panel of Financial Action Task Force (FATF) countries. FATF countries are signatories to agreements to adhere to good financial practices to ensure sustainable development of their economies. The empirical analysis was conducted for the period 1980 to 2020. Results indicate a strong endogenous relationship between the variables in the short and long run. The analysis suggests that careful co-curation of economic, trade, energy, foreign direct investment, and environmental management policies is needed to ensure sustainable economic development in the FATF countries. Global trade and foreign direct investment policies must foster new environmental-friendly industries and greater use of clean renewable energy among these countries. Note: Arrows indicate direction of possible causal links between the variables.

Purpose – The purpose of this paper is to determine whether anchoring and adjustment as heuristic-driven bias and herding behaviour influences listed property fund managers in South Africa’s property investment decisions. The study contributes to the understanding of the influence of heuristic-driven bias and herding behaviour on property investment decisions made in a highly volatile environment. Design/methodology/approach – This study is focused on the subject field of behavioural finance and follows a survey-based design. A questionnaire was finalised after completion of the pilot study and was sent via e-mail to fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange. Non-parametric statistical measures were used. Findings – Consistency with other studies suggests that anchoring and adjustment may exist in the decisions made by listed property fund managers. However, fund managers tend to not adjust to new information due to the current socio-political environment in South Africa rather than a lack of understanding of the new information. Practical implications – It is recommended that investors form developed and emerging economies take notice of the highly volatile circumstances in which property fund managers in an emerging economy such as South Africa have to make investment decisions. The probability of missed gains as a result of conservative investment strategies may have an impact on future returns. Originality/value – This study enhanced the understanding of the role that heuristic-driven bias plays in the South African property industry and more importantly, it went some way towards enhancing understanding of behavioural aspects and their influence on property investment decision making in an emerging market.

Purpose The presence of a day-of-the-week effect has been investigated by many researchers over many years, using a variety of financial data and methods. However, differences in methodology between studies could have led to conflicting results. The purpose of this paper is to expand on an existing study to observe whether an analysis of the same data set with some added years and using a different statistical technique provide the same results. Design/methodology/approach The study examines the presence of a day-of-the-week effect on the Johannesburg Stock Exchange (JSE) indices for the period March 1995-2016, using a GARCH model. Findings The findings show that, contrary to the original study, the day-of-the week effect is present in both volatility and return equations. The highest and lowest returns are observed on Monday and Friday, respectively, while volatility is observed on all five days from Monday to Friday. Originality/value This study adds to the existing literature on day-of-the-week effect of JSE indices, where different patterns or, in some cases, no pattern have been noted. Few previous studies on the day-of-the-week effect observed the effect at micro-level for separate industries or made use of a GARCH model. The present study thus expands on the study of Mbululu and Chipeta (2012), by adding four additional observation years and using a different statistical technique, to observe differences that arise from a different time period and statistical technique. The results indicate that a day-of-the-week effect is mostly a function of the statistical technique applied.

Efficient investment decision-making is a function of a free and efficient market. Government interference may distort such efficient markets and subsequent investment decision-making. We investigate the role of emotions in property fund managers’ decisions and the extent of the influence of government actions on these decisions. The results show that property fund managers perceive the influence of national and local government actions on their investment decisions as negative with a feeling of regret towards these investment decisions made. It also shows the volatility of the South African property fund decision-making environment and its associated difficulties.

In property markets, unlike capital markets, the quantity and quality of data available is limited. To compensate for deficiencies in data on market fundamentals available for property investment decision-making, fund managers may rely on market sentiment. Such deficiencies, together with possible mispricing in property assets, may lead to inefficiencies in property markets. We investigate the use of market sentiment and personal judgement, as opposed to market fundamentals, in property investment decision-making in South Africa. The results indicate that in the South African property investment context, market sentiment plays a smaller role than market fundamentals, unlike in some developed economies.

This chapter contains sections titled: Introduction Financial Valuation Process Financial Modeling Basics Financial Modeling Complications Summary and Conclusions Discussion Questions References About the Authors