Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50

Purpose – The purpose of this study is to examine dividend policies in an emerging capital market, in a country undergoing a transitional period. Design/methodology/approach – Using pooled cross-sectional observations from the top 50 listed Egyptian firms between 2003 and 2005, this study examines the effect of board of directors’ composition and ownership structure on dividend policies in Egypt. Findings – It is found that there is a significant positive association between institutional ownership and firm performance, and both dividend decision and payout ratio. The results confirm that firms with a higher return on equity and a higher institutional ownership distribute higher levels of dividend. No significant association was found between board composition and dividend decisions or ratios. Originality/value – This study provides additional evidence of the applicability of the signalling model in the emerging market of Egypt. It was found that despite the high institutional ownership and the closely held nature of the firms, which imply lower agency costs, the payment of higher dividend was considered necessary to attract capital during this transitional period.

Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt

The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets.

The market for professional services in Indonesia

This paper reports the results of a study which investigates the market for professional services in Indonesia, a country which has not been investigated in the by audit fee literature prior. A well-developed research model used in the prior literature has also been applied in this study, and the empirical findings suggest broad similarities in the pricing of professional services in Indonesia and other countries previously studied. In addition to extending the results of prior research to a country not previously studied, this paper examines whether the large auditors fee premium documented in other countries exists in Indonesia, especially after the major Asian financial crisis of 1997/98, since then almost all companies in this geographical area exercise tight budget controls. The results suggest that no audit fee premium is accrued to Indonesian Big 5 auditors, in contrast to the large audit firm fee premium documented in many other countries.

External audit in the National Health Service in England and Wales:a study of an oversight body's control of auditor remuneration

In the National Health Service (NHS) in England and Wales an oversight body, the Audit Commission (AC), defines the scope of the external auditors’ work, appoints the auditors and has oversight of their fees and audit quality. This heavily regulated audit regime mitigates some of the deficiencies observed in high profile corporate failures. Independence, it has been argued, is influenced by the total auditor remuneration paid by the client. In this study we examine total auditor remuneration in a regulated market which seeks to ensure audit independence and audit quality. In particular we undertake rigorous analysis of auditor remuneration by the type of auditor: We place emphasis on the differentiation between private sector firms and the AC’s in-house auditors (District Audit). Individual private audit firms charge premiums (up to 16%) for particular audit work in identified locations, but no premiums were found when we examined total auditor remuneration. The regime appears to permit efficient operation of the audit market while safeguarding both audit independence and standards.

Success strategies in the Chinese chemical industry: a survey and case study investigations

The chemical industry in China is facing fierce competition and exposure to market forces as a result of changes in the country's economic policy. The Chinese government has applied administrative actions rather than simply relying on market forces to address the changing dynamics. It has attempted to privatise state-owned chemical enterprises (SOCEs) by corporatisation, coupled with industrial restructuring by merging individual state-owned enterprises into groups. Based on a quantitative survey in combination with case studies of two Chinese chemical enterprises, this paper concludes that in this industry building competences is more effective than privatisation and restructuring to improve performance.

Concentration of the UK stock market

During 1999 and 2000 a large number of articles appeared in the financial press which argued that the concentration of the FTSE 100 had increased. Many of these reports suggested that stock market volatility in the UK had risen, because the concentration of its stock markets had increased. This study undertakes a comprehensive measurement of stock market concentration using the FTSE 100 index. We find that during 1999, 2000 and 2001 stock market concentration was noticeably higher than at any other time since the index was introduced. When we measure the volatility of the FTSE 100 index we do not find an association between concentration and its volatility. When we examine the variances and covariance’s of the FTSE 100 constituents we find that security volatility appears to be positively related to concentration changes but concentration and the size of security covariances appear to be negatively related. We simulate the variance of four versions of the FTSE 100 index; in each version of the index the weighting structure reflects either an equally weighted index, or one with levels of low, intermediate or high concentration. We find that moving from low to high concentration has very little impact on the volatility of the index. To complete the study we estimate the minimum variance portfolio for the FTSE 100, we then compare concentration levels of this index to those formed on the basis of market weighting. We find that realised FTSE index weightings are higher than for the minimum variance index.

Momentum profits in alternative stock market structures

The aim of this study is to examine the relationship between momentum profitability and the stock market trading mechanism and is motivated by recent changes to the trading systems that have taken place on the London Stock Exchange. Since 1975 the London stock market has employed three different trading systems: a floor based system, a computerized dealer system called SEAQ and the automated auction system SETS. Since each new trading system has reduced the level of execution costs, one might expect, a priori, the magnitude of momentum profits to decline with each amendment to the trading system. However, the opposite empirical result is found showing that shares trading on the automated system generate higher momentum profits than those trading on the floor system and companies trading on the SETS system display greater momentum profitability than those trading on SEAQ. Our empirical results concur with the theoretical findings of the trader’s hesitation model of Du [Du, J., 2002. Heterogeneity in investor confidence and asset market under- and overreaction. Working paper] and the empirical findings of Arena et al. [Arena, M., Haggard, S., Yan, X., Price momentum and idiosyncratic volatility. Financial Review, in press].

Selection of power market structure using the analytic hierarchy process

Selection of a power market structure from the available alternatives is an important activity within an overall power sector reform programme. The evaluation criteria for selection are both subjective as well as objective in nature and the selection of alternatives is characterised by their conflicting nature. This study demonstrates a methodology for power market structure selection using the analytic hierarchy process (AHP), a multiple attribute decision-making technique, to model the selection methodology with the active participation of relevant stakeholders in a workshop environment. The methodology is applied to a hypothetical case of a State Electricity Board reform in India.

Integrated approach to project feasibility analysis:a case study

Feasibility studies of industrial projects consist of multiple analyses carried out sequentially. This is time consuming and each analysis screens out alternatives based solely on the merits of that analysis. In cross-country petroleum pipeline project selection, market analysis determines throughput requirement and supply and demand points. Technical analysis identifies technological options and alternatives for pipe-line routes. Economic and financial analysis derive the least-cost option. The impact assessment addresses environmental issues. The impact assessment often suggests alternative sites, routes, technologies, and/or implementation methodology, necessitating revision of technical and financial analysis. This report suggests an integrated approach to feasibility analysis presented as a case application of a cross-country petroleum pipeline project in India.

Managing risk in software development projects:a case study

Purpose - The main objective of the paper is to develop a risk management framework for software development projects from developers' perspective. Design/methodology/approach - This study uses a combined qualitative and quantitative technique with the active involvement of stakeholders in order to identify, analyze and respond to risks. The entire methodology has been explained using a case study on software development project in a public sector organization in Barbados. Findings - Analytical approach to managing risk in software development ensures effective delivery of projects to clients. Research limitations/implications - The proposed risk management framework has been applied to a single case. Practical implications - Software development projects are characterized by technical complexity, market and financial uncertainties and competent manpower availability. Therefore, successful project accomplishment depends on addressing those issues throughout the project phases. Effective risk management ensures the success of projects. Originality/value - There are several studies on managing risks in software development and information technology (IT) projects. Most of the studies identify and prioritize risks through empirical research in order to suggest mitigating measures. Although they are important to clients for future projects, these studies fail to provide any framework for risk management from software developers' perspective. Although a few studies introduced framework of risk management in software development, most of them are presented from clients' perspectives and very little effort has been made to integrate this with the software development cycle. As software developers absorb considerable amount of risks, an integrated framework for managing risks in software development from developers' perspective is needed. © Emerald Group Publishing Limited.

Applications of the behavioural homogeneity evaluation framework: the predictive ability of consumer involvement for international food market segmentation

This article proposes a framework of alternative international marketing strategies, based on the evaluation of intra- and inter-cultural behavioural homogeneity for market segmentation. The framework developed in this study provides a generic structure to behavioural homogeneity, proposing consumer involvement as a construct with unique predictive ability for international marketing strategy decisions. A model-based segmentation process, using structural equation models, is implemented to illustrate the application of the framework.

An empirical investigation of the UK stock market response to the implementation of SSAP 20

This study presents an empirical investigation of the UK stock market response to the im-plementation of the UK Statement of Standard Accounting Practice (SSAP) No. 20 “Foreign Cur-rency Translation” (issued in April 1983). Such an empirical investigation has not yet been under-taken for the UK. Our results show that the stock market generally appeared to have anticipatedthe implementation of SSAP 20. For the aggregate set of adopters, we found a positive stock mar-ket response in the official year of adoption, reflecting the appreciation of the income-stabilisingeffects of the standard. This paper also presents a cross-sectional analysis that tests for a relation-ship between the stock returns and the accounting measures of those firms that adopted SSAP 20.We found a significant relation between the stock returns and the related accounting measures inthe actual adoption period of the aggregate set of adopters. This study generally focuses on theinterpretation of the financial impacts of the various accounting choices of firms within their fi-nancial and economic environments.

A study of the attitudes towards unethical selling amongst Chinese salespeople

The latter part of the twentieth century saw the Chinese economy moving towards a socialist market economy rather than a planned system. Despite growing interest in Chinese business ethics, little work has examined ethical issues concerning the Chinese sales force. This study draws from existing work on Chinese and Western business and sales ethics to develop hypotheses regarding the perceptions of unethical selling behaviour of modern Chinese salespeople. A survey of Chinese sales executives is conducted and statistically analysed. Results are compared with those reported in previous US-based research with regard to differences in perceptions of unethical selling behaviour. The results indicate that contemporary Chinese salespeople were more favourably disposed than expected towards unethical selling behaviour, and also more favourably disposed than previously studied US salespeople. Younger Chinese salespeople evaluated unethical behaviours more favourably than older ones. The results are discussed, along with implications for theory, practice and future work.

Internal versus external R&D:a study of R&D choice with sample selection

This paper extends previous analyses of the choice between internal and external R&D to consider the costs of internal R&D. The Heckman two-stage estimator is used to estimate the determinants of internal R&D unit cost (i.e. cost per product innovation) allowing for sample selection effects. Theory indicates that R&D unit cost will be influenced by scale issues and by the technological opportunities faced by the firm. Transaction costs encountered in research activities are allowed for and, in addition, consideration is given to issues of market structure which influence the choice of R&D mode without affecting the unit cost of internal or external R&D. The model is tested on data from a sample of over 500 UK manufacturing plants which have engaged in product innovation. The key determinants of R&D mode are the scale of plant and R&D input, and market structure conditions. In terms of the R&D cost equation, scale factors are again important and have a non-linear relationship with R&D unit cost. Specificities in physical and human capital also affect unit cost, but have no clear impact on the choice of R&D mode. There is no evidence of technological opportunity affecting either R&D cost or the internal/external decision.

A concise guide to market research:the process, data, and methods using IBM SPSS Statistics

This accessible, practice-oriented and compact text provides a hands-on introduction to the principles of market research. Using the market research process as a framework, the authors explain how to collect and describe the necessary data and present the most important and frequently used quantitative analysis techniques, such as ANOVA, regression analysis, factor analysis, and cluster analysis. An explanation is provided of the theoretical choices a market researcher has to make with regard to each technique, as well as how these are translated into actions in IBM SPSS Statistics. This includes a discussion of what the outputs mean and how they should be interpreted from a market research perspective. Each chapter concludes with a case study that illustrates the process based on real-world data. A comprehensive web appendix includes additional analysis techniques, datasets, video files and case studies. Several mobile tags in the text allow readers to quickly browse related web content using a mobile device.