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Geographical indications (GIs), protected by the European Union with the collective marks of PDO (protected designation of origin), PGI (protected geographical indication), and TSG (traditional specialty guaranteed), play an important role in the social and economic system. They not only guarantee food needs, but promote correct consumer information, protect local food, and play a role in the environmental and social sustainability of rural areas. In Italy, Parmigiano Reggiano (PR-RE) PDO cheese is ranked second in foods with the GI protection mark by turnover. This research aims to assess the financial sustainability of the firms registered in the PR-RE PDO consortium using financial statement (FINSTAT) analysis. Financial ratios (FR) and the EM-Score were applied to assess firms' performance, financial risk, and credit score. The analysis distinguished firms by legal form, cooperative and non-cooperative, and altitude range—plain hill and mountain. The main findings of the research were as follows: (1) a better performance of lowland non-cooperative firms and lower financial risk, (2) a longer duration of the inventory cycle of cooperative firms, and (3) a greater financial risk in mountain cooperatives. The results provide indications for improving firms' performance and for designing financial instruments for the sector. To our knowledge, this is the first research to carry out an analysis of all the available FINSTATs of firms in the PR-RE PDO sector. [ABSTRACT FROM AUTHOR]

In this study, we investigate the relationship between debt governance and overinvestment. We use net cash flows to debtholders as a proxy for debt governance and find that an increase in these cash flows mitigates firms' overinvestment. We also show that free cash flows lead cash‐rich and cash‐poor firms to overinvest but that debt governance attenuates this problem. Finally, we find that the mitigating effect of net cash flows to debtholders on overinvestment is highly pronounced in firms with poor governance. These findings suggest that net cash flows to debtholders are particularly effective when shareholder governance is weak. We conclude that cash flows to debtholders can effectively prevent overinvestment and reduce the agency costs of free cash flows. [ABSTRACT FROM AUTHOR]

Purpose: Ethereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations, including cybersecurity and operational benefits, that leads firms to strategically invest in this nascent technology. However, the impact of such strategic investments in EBT has yet to be explored in the context of its relationship to firm value. Therefore, this study explores EBT-specific firm-level characteristics that result in a stock market reaction to announcements of strategic investments. Design/methodology/approach: The authors use the event study methodology, strategic investment literature and signaling theory as contextualizing frameworks for their study. Additionally, the authors explore a new method for examining technology investments as a strategic counter to cybersecurity threats. Findings: Firms that signal to the market their strong commitment to their strategic investment by developing an EBT proof of concept see significantly higher market returns. Firms that have had prior cybersecurity incidents are rewarded by the market for strategically investing in EBT, and when firms with large undistributed free cash flows utilize this cash for strategic EBT investment, the market is more likely to reward these firms, indicating the market views EBT investment positively in these circumstances. Originality/value: The results of this study provide new evidence of the value impact of EBT for firms that suffered cybersecurity events in the past. The authors provide empirical evidence of firm-level characteristics that investors use to discern whether a strategic investment in EBT will drive organizational value. Likewise, the authors demonstrate how signaling affects investor perceptions of strategic information technology (IT) investments in EBT. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Ekonomi Manajemen Sistem Informasi (JEMSI) is the property of Dinasti Publisher and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The aim of this research is to examine the effects of firm size, leverage, and free cash flow on earnings management and firm value. The population for this study consists of all companies listed on the LQ45 index at the Indonesia Stock Exchange from 2018 to 2022. The sample was selected using purposive sampling, resulting in 22 companies. This study employs a quantitative approach, utilizing IBM SPSS 23 for data analysis, with hypothesis testing conducted through Structural Equation Modelling (SEM). The results indicate that the proportion of firm size has a negative and insignificant effect on earnings management and firm value. Conversely, leverage growth and free cash flow have a positive and significant impact on both earnings management and firm value. [ABSTRACT FROM AUTHOR]

This paper demonstrates whether the impact of agency costs on firm value depends on the level of managerial power using the fraction of capital held by the manager, as well as their level of voting rights. Focusing on a sample of 120 non-financial French firms incorporated in the CAC All-Tradable Index for the period 2008–2022, the first empirical analysis provides strong evidence that agency costs of equity, as measured in terms of operating expenses, administrative expenses and the agency cost of free cash flow, exert a negative impact on the firm's market value. In a second empirical analysis, we split our sample into three sub-samples with the aim of capturing the effect of managerial power. The findings lead us to believe that the association between the agency cost measurement and the firm's market value depend on the level of managerial power. This paper challenges prior studies by strengthening our understanding of managerial behavior (incentive, neutral, and entrenchment) in relation to shareholder wealth. Furthermore, it contributes to the recent literature by enabling a better knowledge of the disparity related to studies conducted in other countries with different governance models. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between managerial tone in management discussion and analysis (MD&A) disclosures and stock price crash risk. We make a distinction between two types of tone—concave and convex—based on how managers' tone changes according to whether performance is good or bad. Tone is classified as 'concave' ('convex') when managers overstate (understate) bad news and understate (overstate) good news. Using data on Chinese listed firms from 2013 to 2018, we find that convex tone is positively associated with stock price crash risk, and negatively associated with future performance. The positive relationship between convex tone and stock price crash risk is more pronounced for firms with high free cash flow, opaque financial reporting, and non‐stated‐owned enterprises. These results suggest that the use of a convex tone in MD&A may have a negative impact on the capital market. [ABSTRACT FROM AUTHOR]

We examine the impact of hedge fund activism (HFA) on the investment efficiency of target firms. We find that target firms' investment efficiency improves after the active involvement of hedge funds. This improvement is mainly evident for HFA campaigns with investment strategy-related reforms as one of the main stated objectives. Among investment strategy-related HFA campaigns, the changes in investment efficiency are more pronounced when hedge funds obtain board representation or privately settle with target firms. HFA improves the investment efficiency of target firms by mitigating overinvestment rather than underinvestment problems. Additional tests reveal that target firms with no resistance to HFA and higher free cash flow accommodate this improvement in investment efficiency following HFA. Overall, our findings highlight the role of HFA as a governance mechanism in improving investment efficiency and influencing managers to reduce overinvestment. [ABSTRACT FROM AUTHOR]

This study examines the correlation between fundamental financial metrics and stock returns of Indonesia's LQ45 Index over a 10-year period (2014-2023). The study aims to provide actionable insights for investors and companies by identifying the most critical financial metrics in predicting stock price movements. By analyzing data from 16 consistently listed Indonesian companies, the study focuses on stocks that have consistently maintained their position in the index over the past decade, a gap that has been underexplored in prior research. The study employs various statistical tests to validate the regression model, with hypothesis testing conducted through t-test and Ftests to determine the significance of financial ratios on stock returns. The analysis shows that Return on Equity, Price to Earnings Ratio (PER), Price to Book Value (PBV), Free Cash Flow per Share to Price (PFCF), and Dividend Payout Rate (DPR) have a significant positive effect on stock return. The research recommends that retail investors prioritize the PFCF ratio when evaluating potential stock investments. Transparency in financial reporting is essential, with companies encouraged to provide accurate and comprehensive financial statements, including clear reporting of key financial metrics, to build investor confidence. [ABSTRACT FROM AUTHOR]

The present research examined the effects of cash flow volatility on the buyback decisions of Indian firms. The sample constitutes 179 Indian companies listed on the Bombay Stock Exchange from 2012-2020. Firms have been divided into two sets, i.e., permanent and volatile cash flow firms. Across these two sets, the study determines the major factors affecting their buyback decisions. The results of ordinary least square regression suggested that when firms have fluctuating cash flows each year, they prefer to opt for repurchases than dividend payments. Further, stock undervaluation is the key determinant of repurchases decisions. Thus, firms with constant cash flows are not highly motivated for buyback decisions. Further, the study explored that larger the size of the firm, lower is the tendency to repurchase shares. Large, manufacturing and mature firms with consistent cash funds are more strongly tended towards repurchases. Correspondingly, such companies engaged in buybacks because of their low market-to-book ratios and high information asymmetry. As cash based firms become more old, their propensity to purchase equity reduces. [ABSTRACT FROM AUTHOR]

There is growing evidence that soil degradation, among other factors, has led to both the decline and constraint of agriculture in southern Africa. Conservation and regenerative agriculture (CA/RA) have been proposed as a grain crop production system that could slow down, halt or even reverse some of these disturbing trends. But the question remains whether it is financially viable. We sought to find an answer to this question by comparing the financial returns of a CA/RA system over a 20-year period to its alternatives, namely conventional tillage (CT) and no-tillage (NT) production systems. The cumulative free cash flow (CFCF) of the average between the realistic and conservative CA/RA scenarios in year 20 is considerably higher than that of the other systems under investigation. The CFCF for CA/RA in year 20 in Mpumalanga is estimated to be ZAR86 million, compared to -ZAR51 million for CT and about ZAR4 million for NT. That is a net difference between ZAR137 million (compared to CT) and ZAR82 million (compared to NT). In the Maluti area, the CFCF for the CA/RA production system is estimated at ZAR26 million, compared to -ZAR66 million for CT and -ZAR19 million for NT. In the North-West production area, the CFCF for the CA/RA production system is estimated at ZAR35 million, compared to -ZAR9 million for CT and about ZAR21 million for NT. The differences between the CFCF of the CA/RA system and the other systems represent the financial opportunity cost of not converting to the CA/RA system. [ABSTRACT FROM AUTHOR]

This paper incorporates low interest rates into a framework of post Keynesian theory of the firm under financialization and uses Compustat data to provide an empirical analysis of firm behavior in the eurozone for the period 2000–2018. It reasons that expansive monetary policy targeting low interest rates will only be effective in promoting investment in a scenario where shareholder value orientation (SVO) tightens the finance constraint on growth-maximizing managers. In contrast, when shareholder value maximization becomes the goal of the firm, expansive monetary policy may not only be ineffective in promoting growth but might actually be dangerous because it fosters financial fragility and promotes SVO. Data suggest that financialization in the eurozone represents a shift in the objectives of the firm toward maximizing free cash flows. However, there is no evidence that expansive monetary policy fostered leverage and an equity reduction in the eurozone. Still, the analysis shows that low interest rates were largely ineffective in fostering investment during the period 2008–2018. Therefore, monetary policy seems insufficient to promote investment and growth. Both expansionary fiscal policy and legal reforms that control shareholder power are needed. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the influence of ownership structure and board composition on the probability and intensity of stock repurchases. The study's sample comprises 3,744 firm-year observations, consisting of 53 repurchasing firms with 96 firm-year observations from 2008 to 2019. Design/methodology/approach: Probit and fixed-effects regression models are used to obtain empirical results. Moreover, a probit model with a continuous endogenous regressor (IV-probit) and an instrumental variable method with two-stage least squares (IV-2SLS) estimation are used to address endogeneity. Findings: Corporations with high family or state ownership tend to inhibit stock repurchases to hoard excess free cash flow, supporting agency theory. Conversely, firms with high board independence tend to repurchase their stocks at least once to distribute free cash flows to shareholders, confirming agency theory. Nonetheless, corporations with more female directors on the board or CEO duality tend to conduct stock repurchases at least once but do not repurchase stocks with high values. Interestingly, more female directors on the board may send false signals about undervalued stocks. Originality/value: This is the first study to reveal that firms with CEO duality repurchase their stocks at least once but avoid repurchasing shares with high values. It is also the first study to explore whether women on a board may cause false signaling about undervalued stocks. Furthermore, this study reveals that family and state ownership are potential determinants of stock repurchases in countries with high ownership concentration. This is the first study to address this issue in Thailand. [ABSTRACT FROM AUTHOR]

Purpose: This study proposes a novel measure for management's horizon (short-termism or myopia vs long-termism or hyperopia) derived from easily obtainable firm-level accounting and stock market performance data. The authors use the measure to explore the impact of managements' horizon on firms' investment efficiency. Design/methodology/approach: The authors rely on two commonly used but uncorrelated measures of management performance: accounting performance (return on capital employed, ROCE) and stock market performance (average abnormal return, AAR). The authors combine these measures to develop a multidimensional framework for performance, which classifies firms into four groups: efficient (high accounting and high market performance), poor (low accounting and low market performance), myopic (high accounting and low market performance) and hyperopic (low accounting and high market performance). The authors validate this framework and deploy it to explore the relationship between horizon and firms' investment efficiency. Findings: In validation tests, the authors show that management myopia (hyperopia) explains firms' decision to cut (grow) research and development investments. Further, as expected, myopic (hyperopic) firms are associated with significantly more (less) accrual and real earnings management. The empirical tests on the link between horizon and investment efficiency suggest that myopic managers cut new investments while their hyperopic counterparts grow the same. Ultimately, the authors find that myopia (hyperopia) exacerbates(mitigates) the over-investment of free cash flow problem. Originality/value: The authors introduce a framework for assessing management's horizon using easily obtainable measures of performance. The framework explains inconsistencies in prior empirical research using different measures of performance (accounting versus market). The authors demonstrate its utility by showing that the measure explains decisions around research and development investment, earnings management and firm investments. [ABSTRACT FROM AUTHOR]

The rapid development of many industries in the world has resulted in environmental damage due to excessive use and exploitation of natural resources. As a result, there is a decline in environmental quality resulting in global warming, ozone depletion, pollution, and acid rain. The impact of environmental conventions in the world Montreal Convention, Kyoto Protocol, Ban on the Use of Certain Hazardous Materials and increasing consumer environmentalism can change the context of competition in industries around the world. This study aims to examine the effect of Green Intellectual Capital, CEO Characteristic, Free Cash Flow on Prudence moderated by Environmental Performance. This study took the research population in the energy sector companies listed on the Indonesia Stock Exchange for the period 2019-2023. The type of data used in this study is secondary data in the form of financial reports of companies that are used as samples. The research method used in this study is a quantitative research method. The sample was selected using the purposive sampling method. For hypothesis testing, this study uses multiple linear regression analysis. Based on the results of this study, it shows that Green Intellectual Capital, Busy Director, and Free Cash Flow have an effect on prudence but CEO Tenure has no effect on Prudence. Environmental Performance strengthens the influence of Green Intellectual Capital, Busy Director, and Free Cash Flow on prudence and Environmental Performance strengthens the influence of CEO Tenure on prudence [ABSTRACT FROM AUTHOR]

The objective of this study is to analyze the intrinsic value of sharia stocks in the property sector listed on the Sharia Securities List (DES), utilizing two distinct valuation methodologies: free cash flow to equity (FCFE) and relative valuation. The stocks selected for analysis include PT Metropolitan Kentjana Tbk (MKPI), PT Mega Manunggal Property Tbk (MMLP), and PT Pollux Properties Indonesia Tbk (POLL). In this study, the free cash flow to equity (FCFE) method was employed to ascertain the intrinsic value of the shares. This was achieved through the consideration of free cash flow, which was subsequently deducted to account for expenses pertaining to working capital and investment. In contrast, the relative valuation method involved the comparison of the intrinsic value of the shares with financial ratios such as the price-to-earnings ratio (PER) and the price-to-book value (PBV). The aforementioned approach was informed by a fundamental analysis, which involved the examination of macroeconomic conditions, industry conditions, and company conditions. The data was obtained from property companies listed on the Indonesia Sharia Stock Index (ISSI) for the period 2019-2022. The results indicated that the intrinsic value of MKPI stock, as determined by the FCFE method, was Rp. 24,134. This value suggests that the stock is overvalued, given that the market price was Rp. 27,200. The PER method yielded the following results: The intrinsic value of the stock is Rp. 59,461, indicating that it is undervalued. The PBV method yields an intrinsic value of IDR 7,515, indicating that the stock is overvalued. The MMLP Shares are valued using the FCFE method, which yields an intrinsic value of IDR 4,857, indicating that the stock is undervalued as the market price is IDR 298. The PER method yields an intrinsic value of IDR 686, indicating that the stock is undervalued. The intrinsic value of the stock is IDR 893, indicating that it is undervalued. The PBV method yields an intrinsic value of IDR 686, also indicating undervaluation. The POLL stock is undervalued according to the FCFE method, with an intrinsic value of IDR 251. This is due to the market price of IDR 147. Finally, the PER method yields an intrinsic value of IDR 109, indicating that the stock is undervalued. The intrinsic value of IDR 109 indicates that the stock is undervalued. The PBV method yields an intrinsic value of IDR 214, which also indicates undervaluation. In conclusion, the FCFE and Relative Valuation methods can be used to determine the fairness of Islamic stock prices in the property sector. The data was obtained from property companies listed on the Indonesia Sharia Stock Index (ISSI) for the period 2019-2022. The results indicated that the intrinsic value of MKPI stock, as determined by the FCFE method, was Rp. 24,134. This value suggests that the stock is overvalued, given that the market price was Rp. 27,200. The PER method yielded the following results. [ABSTRACT FROM AUTHOR]

The article focuses on how new technology innovations are enhancing Sales and Operations Planning (S&OP) and Integrated Business Planning (IBP) processes for manufacturers. Topics include the integration of financial and operational planning through Extended Planning and Analysis (xP&A) solutions, the specific benefits of manufacturing-specific (MxP&A) solutions in addressing capability gaps, and how these advancements can significantly reduce planning costs and improve profitability.

The study aims to explore how to measure firms' open innovation from financial statements. So, our research question is as follows: How can we determine firms' open innovation signals directly or indirectly from financial statements? This study used data from the US financial statements and patent registration database from 2016 to 2018 to answer this research question. Three manifest signals of open innovation in financial data were found. First, subsidiary or related firm investment in financial data may have a negative relationship with open innovation because open innovation (i.e., the co-application of patents) could decrease subsidiary or related firm investment. But there are differences between the top and bottom twenty firms. Second, internal R&D investment (I R&D) in financial data may have a positive relationship with open innovation because I R&D could trigger inward open innovation. If I R&D combines with an open innovation strategy, it increases the size of subsidiary or related firm investment as a kind of inward open innovation. Third, free cash flow (FCF) in financial data may have a positive relationship with open innovation because high FCF could support outward open innovation. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of debt financing on dividend payments when they face the agency costs of free cash flow. It focuses on a sample of 120 firms listed on the Saudi Stock Exchange during the period of 2011–2021. The findings from the Generalized Least Squares regression model revealed that the presence of agency costs of free cash flows may limit the funds available for dividend payments. Regarding the moderating effect of debt structure, the research highlights the significant role of long-term debt in making more prudent use of free cash flow. The use of long-term debt becomes more effective and can enhance shareholder wealth when a firm is facing agency costs of free cash flow. More specifically, bondholders primarily focus on affirmative covenants which require the firm to undertake specified actions such as maintaining assets and financial ratios, or paying taxes, but they do not restrict financing activities such as dividend payments. Since interest and debt repayments are fixed obligations, using free cash flow for dividend disbursement is considered a more profitable and beneficial approach for shareholders in the context of Saudi Arabia. This study contributes to our understanding of financial management under different debt structures and improves our scientific knowledge of the culture of Saudi firms regarding the dividend distribution policy. [ABSTRACT FROM AUTHOR]

This study aimed to determine the effect of CEO Narcissism, Company Size, and Free Cash Flow through Corporate Social Responsibility (CSR) on Financial Performance in State-owned enterprises Companies. This study uses a quantitative approach with data sources from the Indonesia Stock Exchange (IDX) official website using the Warppls 7.0 application. The research sample data were from 16 state-owned enterprise companies. The test results show that CEO Narcissism has a negative and significant effect on Corporate Social Responsibility (CSR), Company Size has a negative and insignificant effect on Corporate Social Responsibility (CSR), Free Cash Flow has a positive and insignificant effect on Corporate Social Responsibility (CSR), CEO Narcissism is unable to mediate the effect of Corporate Social Responsibility (CSR) on financial performance. Company Size cannot mediate the effect of Corporate Social Responsibility (CSR) on financial performance. Free Cash Flow cannot mediate the influence of Corporate Social Responsibility (CSR) on financial performance. The Total Determination Coefficient in this study is 0.285 or 28.5%. This indicates the model can explain 28.5% of the data's information. Other factors not included in the study model account for the remainder. [ABSTRACT FROM AUTHOR]

The purpose of this study was to determine the effect of gender diversity and free cash flow on dividend policy with firm size as a moderating variable. The population in this study are mining companies listed on the Indonesia Stock Exchange in 2020-2023. This study used purposive sampling technique, so 138 data were obtained from 87 mining companies listed on the Indonesia Stock Exchange. The results showed that gender diversity has no effect on dividend policy, free cash flow has a significant positive effect on dividend policy. Firm size cannot moderate the effect of gender diversity and free cash flow on dividend policy. The implications of the results of this study are expected to provide information for consideration by stakeholders such as the board of directors and as information for investors in making investment decisions.

This study aimed to determine the effect of free cash flow, leverage, and liquidity on dividend policy and profitability as intervening variables in property companies and real estate. Companies were selected based on purposive sampling techniques to produce 50 samples from 10 companies. The data analysis technique used for testing the hypothesis was the path analysis test and the Sobel test. The research results showed that free cash flow, leverage and liquidity had no direct effect on dividend policy. Profitability had a mediate effect of free cash flow and liquidity on dividend policy while profitability was unable to mediate the relationship leverage on dividend policy. Companies can distribute dividends regardless of free cash flow, leverage and company liquidity. The results of the study indicated that there were no factors that are thought to have a direct influence on dividend policy that are proven to be significant, so it is suggested that further research include other factors that can influence dividend policy. [ABSTRACT FROM AUTHOR]

This study examined the relationship between a firm’s revenue as a measure of growth and the firm’s financial ratios and macroeconomic variables. Fifty firms from the New York Stock Exchange were chosen at random for the period from 2009 to 2022. The variables included in the study were: Earnings per share (EPS), free cash flow (FCF), debt-to-equity ratio (DER), return on assets (ROA), current ratio (CR), inflation (CPI), GDP, federal fund rate (FFR), and unemployment rate (Unempl). The results showed that each variable was significantly related to revenue for some firms. Across firms, the percentage of relationships for each variable was low (56% or less). In particular, the percentages over firms were as follows: EPS (56%), FCF (40%), CPI (30%), GDP (30%), DER (24%), FFR (24%), Unempl (20%), ROA (20%), and CR (22%). Financial ratios showed positive effects, as well as negative relationships with growth. These findings indicated that financial ratios are not good growth indicators. [ABSTRACT FROM AUTHOR]

Copyright of Gharee for Economics & Administration Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The global pandemic has weakened the company’s financial stability and slowed the economy. Using 241 Indian-listed companies of the BSE (A Group) for 5 years (i.e., 2017–2021), the study aims to examine the moderating role of the pandemic crisis on the dividend policy and its determinants associations. Applying the regression technique, the study reveals that profitability, liquidity, leverage, firm size and board independence have significant impact on dividend policy for the Indian listed businesses. However, the overall findings of the study suggest that the instability in the economic condition that occurred for the years 2020 and 2021 has weakened the association of free cash flows, the board size, CEO duality, and board independence with the dividend policy in India. The study also reports the positive impact of the crisis on dividend policy; accordingly, it implies that Indian firms may prefer to pay dividends during the crisis period to calm investors and restore their confidence. Relatively a low relationship between free cash flows and the state of the economy with the dividend policy is an indicator of serious agency problems. [ABSTRACT FROM AUTHOR]

In this note, we compare the methodologies in academic textbooks and the CFA practitioner's guide while demonstrating which academic approach provides the most consistent valuation metric with practitioners. There are many differences when it comes to the items or approaches considered for free cash flow calculations. Some differences, however, are related to the purpose of the calculated free cash flow, for example, the actual free cash flow a company generates during a certain year versus the free cash flow for firm valuation purposes. This note attempts to address this gap and may serve as a guide to faculty as well as practitioners. In what follows, different expositions of the free cash flow model are explored and compared. [ABSTRACT FROM AUTHOR]

Objective: This study analyzes the impact of free cash flow and state ownership on the Earnings Response Coefficient (ERC) in the Brazilian capital market. Method: A sample of 210 companies from 2011 to 2019 was obtained from the Economatica database, with the Earnings Response Coefficient being the dependent variable, free cash flow and state control being the main independent variables, in addition to control variables, which were analyzed using panel data regression with the Pooled Ordinary Least Squares (POLS) method. Results: The results show that free cash flow accounting information has relevant marginal implications on the earning response coefficient and state ownership. The interaction between free cash flow and state ownership reinforces that increases in unexpected earnings are due to the presence of these two elements. Contributions: The findings contribute to the literature on emerging markets by reporting that free cash flow (accounting data) and state monitoring (governance aspect) are informative items for the earnings response coefficient. Consequently, this can improve investors' financial analysis and company evaluation process and make managers pay attention to the effects of the decision to maintain cash surpluses. Therefore, it allows these stakeholders to understand that the existence of available resources (free cash flow) in a business indicates prospects of future earnings. [ABSTRACT FROM AUTHOR]

The thorny issue and contradictory conclusions on dividend payments and firm value are not ending any time soon. The existence of a divergence of findings in the literature suggests the need for further empirical studies on this subject matter. Therefore, this study focuses on how a firm's cash flow influences dividend payments in Ghana. Using data from 2015 to 2020, pooled ordinary least squares and random effects estimation, this study provides evidence of dividend payments in Ghana. The results show that dividend payments are influenced by a firm's net cash flow from operations, free cash flow to equity, firm size, and age. The relevant macroeconomic variables for dividend payments are inflation and gross domestic product growth. Another finding is that the more nonfinancial firms take on the characteristics of financial firms, the less dividends they pay. Managers of listed firms in Ghana should grow the size of their firms; however, this should be done in a manner not to expropriate value to managers as predicted in the Jensen agency problem associated with free cash flow. [ABSTRACT FROM AUTHOR]

This study examines the association between Corporate Social Responsibility (CSR) activities measured by two of Taiwan's leading publishers, the Commonwealth Magazine and the Global View Magazine, and the acquirer's short- and long-term performances after the merger announcement in Taiwan. We use CEO compensation and the firm's free cash flow as the proxies for CEO self-confidence. We find that the acquirer's CSR engagement is positively associated with its long-term performance but not with its short-term performance. CEO compensation is positively associated with the acquirer's performance, especially after the mandatory establishment of the remuneration committee for publicly traded firms. However, the acquirer's free cash flow is found negatively associated with its performance, supporting Jensen's (Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76, 323–329) free cash flow hypothesis or CEO hubris. These findings indicate that the CSR measurements of Commonwealth Magazine and Global View Magazine do provide valuable information for CSR activities and that CSR activities do enhance firm value in the long run. Furthermore, the requirement for the establishment of the remuneration committee does improve the effectiveness of CEO compensation for firm performance in Taiwan. [ABSTRACT FROM AUTHOR]

This paper presents a novel approach to calculate the weighted average cost of capital (WACC) but considering additional relevant variables to be applied to a specific cash flow, free cash flow to firm (FCFF), or capital cash flow (CCF), in order to value an asset. The analytical expressions deduced for this approach, one for each case, are based not only on the ratio debt to the value of the asset and the cost of debt and equity, as in the usual expression, but also includes the debt and firm's cash flow durations. The proposed novel approach to cost of capital has key advantages in comparison to the usual expression for WACC: It is an analytical expression that could be applied to whatever kind of debt or capital structure, not only perpetual debt or permanent capital structure.It is a single discount rate, and for its calculation, it is not necessary to recalculate financial factors involved, which makes easier its application.The additional financial variables involved, debt and firm's cash flow duration, allow to obtain better results for the right discount rate and for the value of an asset in the sense that the discount rate for the asset effectively will permit to reach the required level for the profitability for the investor and to cover the cost of debt. [ABSTRACT FROM AUTHOR]

This study sheds novel light on the factors influencing short-term investments made by businesses. It delves into the impact of previously unexplored variables on working capital requirements at both the firm and macroeconomic levels. These variables include equity issuance activity, corporate yields, free cash flow, retained earnings, depreciation, government oil revenue, and trade levels. The study employs a pooled Ordinary Least Squares (OLS) regression model on a panel dataset spanning the years 2000 to 2014. This investigation extends the existing body of knowledge regarding the determinants of corporate short-term investments in the context of a novel emerging market, specifically the Gulf Cooperation Council (GCC) market. The findings reveal that fluctuations in government oil revenue and trade conditions exert a significant influence on the short-term investments of service businesses in the GCC, with a stronger impact compared to their long-term investments. Considering these findings, GCC economic policymakers could consider implementing targeted interventions to bolster the resilience of service-sector firms. This could include facilitating access to financing channels less susceptible to national economic fluctuations, as well as enacting policies and programs that encourage service firms to diversify their revenue streams through increased export activity and lessened dependence on the domestic market. [ABSTRACT FROM AUTHOR]

Cost stickiness, which is also termed cost asymmetry, describes the asymmetric relationship between revenue and cost. In this study, we examine whether high-speed railway (HSR) connection affects the cost stickiness of tourism firms. Employing a sample of 324 Chinese tourism firms from 2003 to 2018 and applying a difference-in-difference (DID) method, we find that the cost stickiness of tourism firms increases after HSR connection. Our results also reveal that the relationship between HSR connection and cost stickiness is more pronounced in firms with higher free cash flow (FCF), higher labor costs, and in state-owned enterprises (SOEs). Our research advances an in-depth understanding of the cost behavior in tourism firms and sheds light on the policy effect of HSR connection. [ABSTRACT FROM AUTHOR]

This research aims to analyze the influence of a company’s growth, profitability, and free cash flow on the company’s value and the role of dividend policy in moderating this relationship. The research population is 159 manufacturing companies listed on the Indonesia Stock Exchange from 2018-2020. The sample is selected using a purposive sampling technique. There are 44 companies as the sample with 132 units of analysis. The data analysis uses Moderated Regression Analysis (MRA) supported by Eviews 9 tool. The results show that growth and profitability influence the company’s value, while free cash flow does not affect the value. A dividend policy can weakly moderate the relationship between a company’s growth and value, but it cannot moderate profitability and free cash flow to the company’s value. [ABSTRACT FROM AUTHOR]

This study aims to obtain empirical evidence about the effect of profitability and capital structure moderated by free cash flow on firm value. The research object is a company included in the classification of the raw material industry sector which is listed on the Indonesia Stock Exchange. The variables used as proxies for profitability return on assets (ROA) and return on equity (ROE); the capital structure variable is proxied by the debt to assets ratio (DAR) and the debt to equity ratio (DER), and the firm value is proxied by the price to book value (PBV). While the moderating variable uses free cash flow (FCF). Data analysis used multiple regression with the least squares method, and the sample selection method used purposive sampling. Based on the best model produced in this study, it is proven that free cash flow can significantly strengthen the effect of company profitability proxied by return on assets ROA and return on equity (ROE); the effect of capital structure proxied by DAR on firm value, but not as good as the direct effect of the moderated variables. The study reveals that profitability and capital structure significantly impact firm value, with free cash flow moderated by ROA. However, the model does not outperform direct effects, suggesting improved ROE, DAR management, and effective free cash flow management. [ABSTRACT FROM AUTHOR]

The rise in the capital allocated and investor focus attributed to ESG investing over the past several years has been significant. However, the current literature is not settled regarding the value that ESG risk measures and reporting has on investments and valuations. If this risk is essential, then this risk should be incorporated to account for the presence or the lack of ESG-related risk in valuation models. However, with the relative newness and difficulty of quantifying ESG risk, there is little practical guidance on incorporating this risk into valuation estimates. We provide evidence that ESG-related risk scores are positively associated with the cost of equity. Building upon that result, we operationalize the positive relationship to adjust the cost of equity in free cash flow to equity valuation models. Firms with higher ESG risk have a higher required return, while firms with lower ESG risk have a lower discount rate. Our approach is a practical guide for investors and analysts to account for ESG risk adjustments in valuation models. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine empirically the association between surplus free cash flow (SFCF) and earnings management (EM), and the moderating effect of governance on this relationship. The study used a sample of non-financial companies listed on the Amman Stock Exchange (ASE) over the ten-year period (2011-2020) with all the information necessary to estimate the study variables. The modified Jones (1991) model is used to estimate discretionary accruals, a widely used proxy for earnings management. Based on the regression analysis of the related panel data collected, the study's findings indicate that SFCF is positively associated with EM activities. This result is consistent with most prior related study's findings (Nouri & Gilaninia, 2017; Rahmawati, 2020) and suggests that when growth opportunities are limited, the free cash flow induces management to involve in upward management practices. Additionally, results indicate a significant negative impact of the interaction variable SFCF*AQ (audit quality) on EM, suggesting that, in an SFCF situation, AQ reduces manager's tendency to involve in upward EM practices. The study's results are likely to be useful for accounting researchers, local governmental bodies, and policymakers who are concern with the impact of EM practices on the quality of earnings. [ABSTRACT FROM AUTHOR]

This research article investigates the determinants of the dividend payout-level decision of 703 National Stock Exchange (NSE) listed sample firms in India during the period from 1994-95 to 2017-18. Also, considering the different phases of liberalisation in India a sub-period wise analysis is carried out. The censored or Tobit regression analysis is utilised in order to examine the determinants of dividend payoutlevel decision (i.e. how much amount of dividend a firm distributes out of its total profits to the equity shareholders?). From the trend analysis the study finds that the dividend payout ratio (DivPayout) as well as the dividend yield (DivYield) show a volatile trend during the entire study period. Also, the number of dividend paying firms have declined by 20.36% during the study period but this decline is not consistent rather it depicts a volatile trend throughout the study period. The censored or Tobit regression analysis results indicate that the larger, mature firms and firms with high free cash flow have higher dividend payoutlevel on the other hand, the firms facing high business risk and the high dividend distribution tax imposed by the government tend the firms to have lower dividend payout-level. Overall, the findings of the study are in line with the agency, signalling and firm life-cycle theories of the dividend policy. [ABSTRACT FROM AUTHOR]

Intellectual Capital is all knowledge assets that can be differentiated between stakeholder resources and structural resources. This research aims to analyze the influence of the audit committee and audit quality on intellectual capital disclosure and to analyze whether there is a role for free cash flow as a moderating variable in the influence of the audit committee and audit quality on the company's intellectual capital disclosure. This research uses a population of banking companies listed on the Indonesian capital market (BEI). This research sample consists of 30 banking companies whose data can be used for this research with a research period of 5 (five) years, from 2017-2022 where the total analysis data units that can be processed for this research amount to a total of 150 analysis data units. This existing data was processed with the help of statistical tools SPSS software version 26.00. By using multiple regression analysis to test the hypothesis in this research, the following research results can be produced: (1) The Audit Committee has a significant effect on Intellectual Capital disclosure; (2) Audit quality has a significant effect on Intellectual Capital disclosure; (3) Free Cash Flow moderates the relationship between the Audit Committee regarding Intellectual Capital disclosure; (4) Free Cash Flow moderates the relationship between Audit Quality and Intellectual Capital disclosure. Limitations in the research include that the audit committee is only assessed from the number of committees in the company so that in further research the audit committee can be assessed from the number of meetings held. Further research is recommended to expand sectors other than banking to be used as research samples, such as the energy sector or other sectors in the Indonesian capital market. [ABSTRACT FROM AUTHOR]

The current research paper explores some key aspects of the application of the DCF enterprise valuation. This paper presents the second part of a broader study by the authors, which is focused on the analysis of key input variables, predetermining the amount of free operating cash flows as an important part of the application of DCF valuation models. Here are the most serious prerequisites for deviation of forecasts from reality, which often leads to a significant distortion of the final valuations of enterprises. This provokes the research on the interdependence between the five main input variables and especially between operating revenue on the one hand, and the different expenditure groups, on the other hand, is required. In the first part of this research, the relationship between operating revenue and operating expenditures was investigated. In the present research paper, the relationship between operating revenue and gross investment expenditures is investigated, including the increase in net operating working capital and capital expenditures. The research was again carried out on the basis of aggregated data for all non-financial enterprises in Bulgaria for the period 2008-2020. The results are generally ambiguous, but in the medium and long term, at least for some of the largest sectors explored, relatively representative and sustainable averages are established for the relative share of net operating working capital and capital expenditures to revenues. There are no strong arguments against forecasting gross investment costs based on their historical averages as a percentage of operating revenue. [ABSTRACT FROM AUTHOR]

This paper exploits the introduction of China's Fair Competition Review System in 2016 as a quasi-natural experiment to analyze the impact of changes in market competition on firm innovation. Our findings illustrate that heightened competition fosters innovation at the firm level. After the implementation of the Fair Competition Review System, monopolistic firms face enhanced financing constraints and reduced free cash flows, while their degree of financialization is also curbed. Furthermore, the management's emphasis on innovation strengthens the motivational effect of competition on innovation. The results from heterogeneity analysis suggest that the Fair Competition Review System's stimulating effect on innovation is especially salient for state-owned enterprise, non-high-tech enterprises, large firms, and those located in regions with lower levels of marketization. [ABSTRACT FROM AUTHOR]

Financial institutions, particularly banks, have long grappled with the dilemma of structuring their capital optimally. This process, commonly referred to as capital structure decision-making, is of paramount importance, especially within the financial services sector, where strict regulations are imposed by reserve and central banks in alignment with global Basel guidelines. This study unveils the key factors that determine the capital structure choices of African banks, using panel data encompassing 45 listed banks across six nations that had embraced the Basel III Accord spanning the years 2010 to 2019. The study used the system-generalised moment methods (sys-GMM) estimator to fit the formulated panel data regression model. The study findings showed positive associations between ZSCORE, an indicator of bank financial stability, and net interest margin ratio (NIMR) with bank leverage (TCTE). In addition, the results revealed positive correlations between earnings volatility (EV), profitability (P), and risk (R) with bank leverage (TDCE). This suggests that profitable banks are inclined to favour debt financing, a phenomenon driven by their ability to comfortably service debt obligations with free cash flows. This study's overarching conclusion underscores the dominant influence of the Liquidity Coverage Ratio (LCR) on African bank capital structures. Whether assessing traditional or Basel III-prescribed measures of bank leverage, LCR consistently emerged as the primary determinant. This finding is of significant relevance to bank executives and regulators, offering them essential insights for informed decision-making by considering striking a balance between equity and debt financing based on financial stability, profitability, and risk profiles. [ABSTRACT FROM AUTHOR]

Enterprise investment is closely related to cost of capital, and cost of capital is affected by lending rate driven by national monetary policy. For instance, the retail interest rate (including deposit, loan interest rates) of a bank would rise during the practice of tight national monetary policy. Excessively high loan interest rate would reduce enterprises' investment due to increasing cost of capital. In this case, corporate investment behavior could be understood from national monetary policy. Taking listed companies publicly offered by Shanghai Stock Exchange and Taipei Exchange as the research samples, the open annual information from the database are acquired. Industry peculiarities, financial, securities, and insurance industries applicable to special accounting standards, as well as construction industry are excluded, and samples with incomplete or omitted data are deleted. The research results show that 1. the practice of easing policy in national monetary policy allows Chinese enterprises holding higher free cash flow, 2.Chinese enterprises with positive free cash flow appear higher investment behavior, and 3. the practice of easing policy in national monetary policy results in higher investment behavior of Chinese enterprises. According to the results, it is proposed to discuss the evaluation basis for impacts on industrial development during monetary policy. The results could assist policy makers in better understanding impacts of national monetary policy adjustment on enterprise investment effect as well as provide business managers for evaluating the effectiveness of national monetary policy. [ABSTRACT FROM AUTHOR]

Paying less cash dividend is one type of pledging shareholders' opportunistic behaviour. Previous literature leaves unclear evidence about the impacts of share pledging on such firm-level decisions. Using the data of listed firms between 2014 and 2020 in China, we fill this void by examining the relationship between share pledging and cash dividend payouts from the perspective of social trust. Using a Heckman two-stage model, we find that share-pledging firms are less likely to pay cash dividend and the cash dividend payout is negatively related to pledged shares. We employ a hierarchical linear model and find that the level of social trust positively moderates the relationship between share pledging and cash dividend payout. Further, we find the effect is more pronounced for firms with higher free cash flows. The results indicate that social trust reduces the moral risk of pledging shareholders of listed firms in emerging market. [ABSTRACT FROM AUTHOR]