Catalogue Search | MBRL
Are you sure you want to remove the book from the shelf?
{{itemTitle}}
8,057
result(s) for
"Capitalization"
Sort by:
Science's reproducibility and replicability crisis: International business is not immune
International business is not immune to science's reproducibility and replicability crisis. We argue that this crisis is not entirely surprising given the methodological practices that enhance systematic capitalization on chance. This occurs when researchers search for a maximally predictive statistical model based on a particular dataset and engage in several trial-and-error steps that are rarely disclosed in published articles. We describe systematic capitalization on chance, distinguish it from unsystematic capitalization on chance, address five common practices that capitalize on chance, and offer actionable strategies to minimize the capitalization on chance and improve the reproducibility and replicability of future IB research.
Journal Article
The small-cap advantage : how top endowments and foundations turn small stocks into big returns
The historical returns of small-cap stocks have exceeded those of mid-cap and large-cap stocks over long time periods. The additional return experienced by small-cap investors has occurred despite inherent disadvantages in the asset class.
Book
Measurement of market
As measures of concentration, especially for market (industry) concentration based on market shares, a variety of different measures or indices have been proposed. However, the various indices, including the two most widely used ones, the concentration ratio and the Herfindahl-Hirschman index (HHI), lack an important property: the value-validity property. An alternative index with this and other desirable properties is introduced. The new index makes it permissible to properly assess the extent of the concentration and make order and difference comparisons between index values as being true representations of the real concentration characteristic (attribute). Computer simulation data and real market-share data are used in the analysis. It is shown that the new index has a close functional relationship with the HHI index and has a firm theoretical relationship with market power as measured by the price-cost margin. Corresponding modifications to existing merger guidelines are presented.
Journal Article
Valuation of cyclical assets and exit value
PurposeOrdinary direct capitalization is normally considered procyclical in its present form (De Lisle Grissom, 2011); for this reason, an alternative approach to direct capitalization may be useful in the determination of a robust opinion of value. The valuation standards propose an alternative determination of terminal value in the discounted cash flow analysis, recommending that for cyclical assets, the terminal value should consider … “the cyclical nature of the asset and should not be performed in a way that assumes “peak” or “trough” levels of cash flows in perpetuity” (IVS 105 Valuation Approaches and Methods para 50.21 lett e).Design/methodology/approachThe introduction in International Valuation Standards (IVS) of Cyclical Assets raises several questions for the community of real estate professionals and academicians (IVS, 2022, 105 Valuation Approaches and Methods para 50.09 lett d). Cyclical assets can be defined as property whose value is “influenced by upturn and downturn of the market in a significant way” (d’Amato et al., 2019).FindingsThe paper proposes different solutions to the problem. The determination of the exit value using cyclical capitalization allows for a prudent assessment of the value and may be used either as a valuation procedure or a risk analysis method.Research limitations/implicationsThe valuation comparison with the traditional valuation techniques will be based on an iteration of exit value in order to determine the effects of the valuation procedure on the opinion of value.Practical implicationsThe implication of the valuation procedure is the introduction of a countercyclical valuation method to determine the exit value in order to reach stable and reliable valuations for income-producing properties.Social implicationsThese models may have a social implication, providing valuation for income-producing properties that may deal with the property market cycle in a more efficient way, providing efficient valuation for banks and institutions.Originality/valueThe paper is the first application of such a valuation procedure to the determination of exit value.
Journal Article
Why has CEO Pay Increased So Much?
This paper develops a simple equilibrium model of CEO pay. CEOs have different talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO's pay depends on both the size of his firm and the aggregate firm size. The model determines the level of CEO pay across firms and over time, offering a benchmark for calibratable corporate finance. We find a very small dispersion in CEO talent, which nonetheless justifies large pay differences. In recent decades at least, the size of large firms explains many of the patterns in CEO pay, across firms, over time, and between countries. In particular, in the baseline specification of the model's parameters, the sixfold increase of U.S. CEO pay between 1980 and 2003 can be fully attributed to the sixfold increase in market capitalization of large companies during that period.
Journal Article
Market capitalization shock effects on open innovation models in e-commerce: golden cut q-rung orthopair fuzzy multicriteria decision-making analysis
This research paper analyzes revenue trends in e-commerce, a sector with an annual sales volume of more than 340 billion dollars. The article evaluates, despite a scarcity of data, the effects on e-commerce development of the ubiquitous lockdowns and restriction measures introduced by most countries during the pandemic period. The analysis covers monthly data from January 1996 to February 2021. The research paper analyzes relative changes in the original time series through the autocorrelation function. The objects of this analysis are Amazon and Alibaba, as they are benchmarks in the e-commerce industry. This paper tests the shock effect on the e-commerce companies Alibaba in China and Amazon in the USA, concluding that it is weaker for companies with small market capitalizations. As a result, the effect on estimated e-trade volume in the USA was approximately 35% in 2020. Another evaluation considers fuzzy decision-making methodology. For this purpose, balanced scorecard-based open financial innovation models for the e-commerce industry are weighted with multistepwise weight assessment ratio analysis based on q-rung orthopair fuzzy sets and the golden cut. Within this framework, a detailed analysis of competitors should be made. The paper proves that this situation positively affects the development of successful financial innovation models for the e-commerce industry. Therefore, it may be possible to attract greater attention from e-commerce companies for these financial innovation products.
Journal Article
Going digital: implications for firm value and performance
We examine firm value and performance implications of the growing trend of nontechnology companies engaging in activities relating to digital technologies. We measure digital activities in firms based on the disclosure of digital words in the business description section of 10-Ks. Digital activities are associated with a market-to-book ratio 8%–26% higher than industry peers, and only 25% of the differences in market-to-book is explained by accounting capitalization restrictions. To control for selection bias, we implement lagged dependent variable and IV regressions, and our market-to-book findings are robust to these specifications. Portfolios formed on digital activity disclosure earn a Daniel et al.
The Journal of Finance
52 (3): 1035–1058 (
1997
)-adjusted return of 30% over a three-year horizon and a monthly alpha of 44-basis-points. On the other hand, we find weak evidence of near-term, positive improvements in fundamental performance, as we find some evidence of interim productivity increases but declines in sales growth conditional on digital activities.
Journal Article
Bank Capital and Lending Relationships
This paper investigates the mechanisms behind the matching of banks and firms in the loan market and the implications of this matching for lending relationships, bank capital, and credit provision. I find that bank-dependent firms borrow from well-capitalized banks, while firms with access to the bond market borrow from banks with less capital. This matching of bank-dependent firms with stable banks smooths cyclicality in aggregate credit provision and mitigates the effects of bank shocks on the real economy.
Journal Article
The Future of Platforms
The world's most valuable public companies and its first trillion-dollar businesses are built on digital platforms that bring together two or more market actors and grow through network effects. The top-ranked companies by market capitalization are Apple, Microsoft, Alphabet (Google's parent company), and Amazon. Facebook, Alibaba, and Tencent are not far behind. As of January 2020, these seven companies represented more than $6.3 trillion in market value, and all of them are platform businesses. But the path to success for a platform venture is by no means easy or guaranteed, nor is it completely different from that of companies with more-conventional business models. Why? Because, like all companies, platforms must ultimately perform better than their competitors. In short, industrywide platforms and their global ecosystems have already disrupted many aspects of our personal and working lives. New innovation and transaction platforms have enabled nearly every type of exchange and activity imaginable in today's world, and platform entrepreneurs have made Anything-as-a-Service possible.
Journal Article