Equity offerings, stock price crash risk, and the impact of securities regulation: international evidence

We examine whether earnings manipulation around seasoned equity offerings (SEOs) is associated with an increase in the likelihood of a stock price crash post-issue and test whether the enactment of securities regulations attenuate the relation between SEOs and crash risk. Empirical evidence documents that managerial tendency to conceal bad news increases the likelihood of a stock price crash (Jin and Myers, 2006; Hutton, Marcus, and Tehranian, 2009). We test this hypothesis using a sample of firms from 29 EU countries that enacted the Market Abuse Directive (MAD). Consistent with our hypothesis, we find that equity issuers that engage in earnings management experience a significant increase in crash risk post-SEO relative to control groups of non-issuers; this effect is stronger for equity issuers with poor information environments. In addition, our findings show a significant decline in crash risk post-issue after the enactment of MAD that is stronger for firms that actively manage earnings. This decline in post-issue crash risk is more effective in countries with high ex-ante institutional quality and enforcement. These results suggest that the implementation of MAD helps to mitigate managers’ ability to manipulate earnings around SEOs.

Earnings management and stock price crashes post-crossdelisting

We test whether cross-delisted firms from the major U.S. stock exchanges experience an increase in crash risk associated with earnings management. Consistent with our prediction, we find that earnings management have a greater positive impact on stock price crash risk post-cross-delisting when compared to a sample of still cross-listed firms. Moreover, our results suggest that this effect is more pronounced for crossdelisted firms from countries with weaker investor protection and poorer quality of their information environment. We further examine whether managers’ ability to manipulate earnings increases post-cross-delisting around seasoned equity offerings. Our evidence shows that cross-delisted firms that engage in earnings management to inflate reported earnings prior to a seasoned equity offering are more likely to observe a subsequent stock price crash.

Development of autonomous maintenance in a furniture company

This article presents a work performed in the maintenance department of a furniture company in Portugal, in order to develop and implement autonomous maintenance. The main objective of the project was related to the objective to increase and make effective the autonomous maintenance tasks performed by production operators, and in this way avoiding unplanned downtime due to equipment failures. Although some autonomous maintenance tasks were already carried out within the company, a preliminary study revealed weaknesses in the application of this tool. In the initial phase of this pilot project, the main problems encountered at the level of autonomous maintenance were related to the lack of time to carry out these tasks, showing that the stipulated procedures were far from the real needs of the company. To solve these problems a pilot project was conducted, making several changes in the performance of autonomous maintenance tasks, making them standard and adapted to reality of each production line. There was a general improvement in the factory indicators, and essentially there was a behavioral change, since the operators felt that their opinions were taking into account and began to understand the importance of small tasks performed by them.

Fuzzy maintenance costs of a wind turbine pitch control device

This paper deals with the problem of estimation maintenance costs for the case of the pitch controls system of wind farms turbines. Previous investigations have estimated these costs as (traditional) “crisp” values, simply ignoring the uncertainty nature of data and information available. This paper purposes an extended version of the estimation model by making use of the Fuzzy Set Theory. The results alert decision-makers to consequent uncertainty of the estimations along with their overall level, thus improving the information given to the mainte-nance support system.

Behavior-based price discrimination in a multi-dimensional preferences market

NIPE WP 04/ 2016