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Research summary: We explore the effect of the interplay between a firm's external and internal actions on market value in the context of corporate social responsibility (CSR). Specifically, drawing from the neo-institutional theory, we distinguish between external and internal CSR actions and argue that they jointly contribute to the accumulation of intangible firm resources and are therefore associated with better market value. Importantly, though, we find that, on average, firms undertake more internal than external CSR actions, and we theorize that a wider gap between external and internal actions is negatively associated with market value. We confirm our hypotheses empirically, using the market-value equation and a sample comprising 1,492 firms in 33 countries from 2002 to 2008. Finally, we discuss implications for future research and practice. Managerial summary: Companies often accumulate intangible assets by taking internally and externally oriented CSR actions. Contrary to popular beliefs, the data show that they undertake more internal than external ones: firms do more and communicate less. How does a potential gap (i.e., a misalignment) between internal and external CSR actions affect a firm's market value? We find that although together (the sum of) internal and external actions are positively associated with market value, a wider gap has negative implications. In other words, firms do not realize the full benefits of their internal actions when such actions are not externally communicated to key stakeholders, and to the investment community in particular. This negative association with market value is particularly salient in CSR-intensive and the natural resources and extractives industries.

Information security (infosec) breaches are becoming increasingly common, putting businesses at risk. These could have a long-term impact on the financial performance and, consequently, publicly traded firms’ market value (MV). Despite its significance, prior research has concentrated mainly on the short-term effects of breached firms’ MV. In addition, a paucity of literature explores what can be done to mitigate the negative impact on MV of breached firms. Employing a novel method of 'one-to-one matching,' this study’s primary objective is to examine the long-term effect of infosec breaches on the MV of breached firms. Furthermore, in today’s knowledge-based economy, a lack of efficient intellectual capital (IC) that results in effective infosec risk mitigation strategies in the event of an infosec breach may amplify the loss of market value for breached firms. Hence, this research establishes a knowledge management indicator based on 'Value-Added Intellectual Capital' (VAIC™) to reflect firms' infosec risk management and resiliency. Thus, the secondary objective of this research is to examine the moderating influence of VAIC on the relationship between infosec breaches and the long-term MV of breached firms. Specifically, we envision how the firm’s efficiency in IC, which encompasses human capital efficiency, structural capital efficiency, and capital employed efficiency, mitigates this effect. A long-term examination of 220 infosec breaches demonstrated a significant negative impact on the MV of breached firms within 1 year of the breach and from 1 year prior to 2 years after the breach. However, firms with a higher level of IC will experience a less severe negative impact on MVs. In addition, firms with greater human and structural capital efficiencies are anticipated to recover from information security breaches more rapidly. The study is anticipated to greatly assist investors, managers, and scholars comprehend the long-term relationship between security breaches and firms' MV. In addition, managers are expected to be provided with sophisticated information that enables them to create and expose their firms' IC to investors to represent efficient infosec-risk management and resilience practices.

PurposeThe metaverse has garnered increasing attention from researchers and practitioners, yet numerous firms remain hesitant to invest in it due to ongoing debates about its potential financial benefits. Therefore, it is crucial to analyze how the implementation of metaverse initiatives affects firms’ stock market value – an area that remains underexplored in the existing literature. Additionally, there is a significant lack of research on the contingency factors that shape the stock market reaction, leaving a noticeable gap in managerial guidance on the timing and benefits of investments in the metaverse. To narrow these gaps, we examine whether and when the implementation of metaverse initiatives enhances firms’ stock market value.Design/methodology/approachBased on 73 metaverse implementation announcements disclosed by Chinese listed firms during January 2021–August 2023, we employ an event study approach to test the hypotheses.FindingsWe find that metaverse implementation announcements elicit a positive stock market reaction. Moreover, the stock market reaction is stronger for technology-focused announcements and smaller firms, or when public attention to the metaverse is higher. Nevertheless, firms’ growth prospects do not significantly alter the stock market reaction.Originality/valueThis study extends the nascent literature on the metaverse by applying signaling theory to offer novel insights into the signaling effect of metaverse implementation announcements on stock market value and the boundary conditions under which the effectiveness of the signal varies. Besides, it provides managers with important implications regarding how to tailor the investment and information disclosure strategies of the metaverse to more effectively enhance firms’ stock market value.

Planning for cost-effective conservation requires reliable estimates of land costs, spatially-differentiated at high resolution. Nolte (2020) provides a county-by-county, parcel-level estimation approach that dramatically improves estimates of fair market value for undeveloped land across the contiguous Unites States. Much undeveloped land of conservation interest is under threat of conversion to agricultural use or is already agricultural. This paper demonstrates the value of accounting for additional variables that affect agricultural productivity and demand for undeveloped land, as well as the benefit of modeling at scales corresponding to regional agricultural markets. We find that countywide median home value, climatic variables, and several parcel-level soil type variables contribute substantially to predictive power. Enlarging the set of predictors and the geographical scale of modeling improves accuracy by approximately 15 percent and, relative to a more restricted modeling benchmark adapted from Nolte (2020), extends coverage into 376 counties occupying 1.35 million km 2 . To assess the practical benefits of our modeling approach, we simulate the protection of 30 percent of US lands via government purchasing, modeled after the Biden administration’s “30x30” initiative. Using our proposed modeling strategy, the purchasing agency saves approximately $15 million per year, or 4 percent of the USDA’s annual land easement budget.

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.

There has been significant interest and debate on the impact that a firm’s investments in corporate social responsibility (CSR) practices and initiatives have on its market value. In this paper, we target an area that is relatively under-researched: the relevance of CSR practices and initiatives for firms in the emerging economic region of mainland China and Hong Kong, where market development and the institutional environment lag that of developed economies. Using independent CSR assessment data on a sample of large mainland Chinese and Hong Kong firms listed on the Hong Kong Stock Exchange, we evaluate the impact of six CSR dimensions on the firms’ adjusted stock market value over a three-year period. We found support for the influence of only two of the six dimensions considered, namely, the CSR practices and initiatives focused on community investment through philanthropy and, to a lesser extent, the CSR practices and initiatives focused on enhancing workplace quality, to be significant predictors of firm value. This suggests that social and people-centric dimensions of CSR are more relevant than technical and process-centric dimensions of CSR for mainland Chinese and Hong Kong firms. Furthermore, we found support for the hypothesis that the impact of CSR practices and initiatives on firm value follows an inverted U-shaped relationship over time, suggesting that the effect of these initiatives on firm value steadily increases during the initial years after their adoption to reach a maximum and then gradually fades away in subsequent years. To this end, this study advances our knowledge of the specific CSR dimensions that contribute to firm value and their relevance for Chinese and Hong Kong firms.

Southeast Asian tropical forests are vital sources of high‐value timber and non‐timber forest products (NTFPs). This study investigates the relationship between plant traits, wood density, and timber market value within the Dipterocarpaceae family, a critical contributor to the global tropical timber trade and a key structural component of many forests in Southeast Asia. Using a phylogenetic approach, we explored the correlation of morphological and life‐history traits with timber price. Our results show that wood density is significantly associated with higher timber prices, and this relationship is strongly influenced by phylogenetic dependence. We found no evidence linking timber value to the conservation status of dipterocarp species, suggesting that economic exploitation does not necessarily correlate with species endangerment. These findings emphasize the importance of understanding the evolutionary patterns driving economically valuable traits in timber species, which can guide sustainable forest management and conservation strategies in Southeast Asia.

Invasive species are known to cause significant negative impacts to ecosystems and to people. In this paper, we outline the nature of these economic impacts, and then present a range of approaches for estimating the economic costs of invasive species (including impacts on biodiversity), and thus the benefits of management programmes. The importance of thinking clearly about the most appropriate context for valuation is stressed. We provide examples of the application of non‐market valuation approaches to invasive species management, and show how such methods can be used to measure public preferences over how control is undertaken. We discuss some important problems in applying economic valuation methods in this context.

This article analyzes the practice of assigning a zero value to a partnership profits-only interest. The authors suggest all property has an underlying value. A zero value is not per se synonymous with it being too speculative. Only in the rarest of circumstances is the value of property so speculative that it cannot be readily determined. When value cannot be ascertained, the transaction remains open under U.S. Supreme Court doctrine established in Burnet v. Logan. However, the current legal status of a profits-only interest has largely ignored the open transaction doctrine, resulting in the Internal Revenue Service (Service) issuing a series of revenue procedures (Rev. Proc. 93-27 and Rev. Proc. 2001-43), and a proposed regulation that generally consider the receipt of such as a non-taxable event. Taxpayers have interpreted these administrative procedures to indicate a zero fair market value on profits-only interests. The authors suggest this interpretation is incorrect. Assigning zero value distorts the proper characterization of service-related income and does not reflect true fair market value. The authors recommend that the Service withdrawal Rev. Proc. 93-27 and Rev. Proc. 2001-43 and the proposed regulation involving a profits-only interest, and instead apply fair market value determinations on a case-by-case basis based upon well-founded valuation methods such as those used in financial analysis or option pricing contexts.

ABSTRACT The objective of this research was to test whether idiosyncratic risk affects the market value of cash and whether this value, moderated by such risk, differs between Brazilian family and non-family businesses. Although the family business is the dominant type of organization in the world, the literature highlights the need to explore the behavioral differences between family and non-family businesses. Therefore, this study seeks to fill this gap, by considering that the idiosyncratic risk of the firm is influenced by the more or less conservative behavior of the decision maker. Given the impasse between the risk of expropriation of shareholder wealth by managers through available cash balances and the importance of the immediate availability of cash for the survival of the firm, it is relevant to compare whether an additional Brazilian real (the official currency of Brazil) of retained cash is less valuable for Brazilian family businesses compared to non-family businesses. The research has an impact by providing insights into the value that shareholders attribute to each additional Brazilian real of cash. The empirical model is based on the model developed by Fama and French (1998) and adapted by Dittmar and Mahrt-Smith (2007) and Pinkowitz et al. (2006), and idiosyncratic risk is estimated based on the 3-factor model of Fama and French (1993). The firms were classified as family and non-family using the Reference Form, and a total of 83 firms were analyzed using multiple and quantile regressions. The results show that idiosyncratic risk positively affects the market value of cash and that the market value of cash, moderated by idiosyncratic risk, is lower for family businesses than for non-family businesses. This finding that family control has a different effect on the market value of cash of Brazilian firms when idiosyncratic risk is taken into account contributes to the research in this field. RESUMO O objetivo desta pesquisa foi verificar se o risco idiossincrático afeta o valor de mercado do caixa, bem como se esse valor, moderado por tal risco, difere-se entre empresas brasileiras familiares e não familiares. Embora a empresa familiar seja o tipo dominante entre as organizações no mundo, a literatura ressalta a necessidade de explorar as diferenças comportamentais entre empresas familiares e não familiares. Desse modo, ao considerar que o risco idiossincrático da empresa é influenciado pelo comportamento mais ou menos conservador do tomador de decisão, este estudo busca preencher essa lacuna. Diante do impasse entre o risco de expropriação da riqueza dos acionistas pelos gestores por meio dos saldos de caixa disponíveis e a importância da disponibilidade imediata do caixa para a sobrevivência da empresa, mostra-se relevante comparar se um real extra de caixa retido é menos valioso para as empresas brasileiras familiares em relação às não familiares. A pesquisa tem impacto por fornecer insights sobre o valor que os acionistas atribuem a cada real adicionado no caixa. O modelo empírico foi elaborado a partir do modelo desenvolvido por Fama e French (1998) e adaptado por Dittmar e Mahrt-Smith (2007) e Pinkowitz et al. (2006) e o risco idiossincrático foi estimado com base no modelo de 3 fatores de Fama e French (1993). A classificação das empresas em familiares e não familiares foi feita por meio do Formulário de Referência e, no total, 83 empresas foram analisadas com o uso de regressões múltiplas e quantílicas. Os resultados mostram que o risco idiossincrático afeta positivamente o valor de mercado do caixa e que o valor de mercado do caixa, moderado pelo risco idiossincrático, é menor para as empresas familiares do que para as empresas não familiares. Visto que o controle familiar provoca um efeito diferente sobre o valor de mercado do caixa das empresas brasileiras quando se considera o risco idiossincrático, contribui-se ao explorar esse campo.