Impact of the Financial Crisis on the Performance of European Acquisitions

This study looks at the impact of the recent financial crisis on the short-term performance of European acquisitions. We use institutional theory and transaction cost economic theory to study whether bidders derive lower or higher returns from acquisitions announced after 2008. We investigate shareholders’ stock price reaction to 2245 deals which occurred during 2004–12 across 22 European Union countries. Our results from both univariate and multivariate analysis show that the deals announced in the post-crisis period, corresponding to the period of economic recession, generate higher returns to shareholders as compared to acquisitions announced in the pre-crisis period. We also test the relevance of the Economic and Monetary Union (EMU), that is, the Eurozone, to this value accrual during the recessionary period. We observe that non-EMU transactions obtain significantly higher gains vis-à-vis EMU transactions in the post-crisis years. Overall, announcement returns of European acquisitions have been affected by the financial crisis and the global recession; and companies that target countries with different currency regimes are likely to generate better returns from their acquisitions.

Multi-Tenant Virtual GPUs for Optimising Performance of a Financial Risk Application

Graphics Processing Units (GPUs) are becoming popular accelerators in modern High-Performance Computing (HPC) clusters. Installing GPUs on each node of the cluster is not efficient resulting in high costs and power consumption as well as underutilisation of the accelerator. The research reported in this paper is motivated towards the use of few physical GPUs by providing cluster nodes access to remote GPUs on-demand for a financial risk application. We hypothesise that sharing GPUs between several nodes, referred to as multi-tenancy, reduces the execution time and energy consumed by an application. Two data transfer modes between the CPU and the GPUs, namely concurrent and sequential, are explored. The key result from the experiments is that multi-tenancy with few physical GPUs using sequential data transfers lowers the execution time and the energy consumed, thereby improving the overall performance of the application.

Performance determinants For Swedish Financial Monetary Institutions: Panel Data evidence between 2010-2014.

Due to the rapid changes that governs the Swedish financial sector such as financial deregulations and technological innovations, it is imperative to examine the extent to which the Swedish Financial institutions had performed amid these changes. For this to be accomplish, the work investigates what are the determinants of performance for Swedish Financial Monetary Institutions? Assumptions were derived from theoretical and empirical literatures to investigate the authenticity of this research question using seven explanatory variables. Two models were specified using Returns on Asset (ROA) and Return on Equity (ROE) as the main performance indicators and for the sake of reliability and validity, three different estimators such as Ordinary Least Square (OLS), Generalized Least Square (GLS) and Feasible Generalized Least Square (FGLS) were employed. The Akaike Information Criterion (AIC) was also used to verify which specification explains performance better while performing robustness check of parameter estimates was done by correcting for standard errors. Based on the findings, ROA specification proves to have the lowest Akaike Information Criterion (AIC) and Standard errors compared to ROE specification. Under ROA, two variables; the profit margins and the Interest coverage ratio proves to be statistically significant while under ROE just the interest coverage ratio (ICR) for all the estimators proves significant. The result also shows that the FGLS is the most efficient estimator, then follows the GLS and the last OLS. when corrected for SE robust, the gearing ratio which measures the capital structure becomes significant under ROA and its estimate become positive under ROE robust. Conclusions were drawn that, within the period of study three variables (ICR, profit margins and gearing) shows significant and four variables were insignificant. The overall findings show that the institutions strive to their best to maximize returns but these returns were just normal to cover their costs of operation. Much should be done as per the ASC theory to avoid liquidity and credit risks problems. Again, estimated values of ICR and profit margins shows that a considerable amount of efforts with sound financial policies are required to increase performance by one percentage point. Areas of further research could be how the individual stochastic factors such as the Dupont model, repo rates, inflation, GDP etc. can influence performance.

Introduction to Discounted Cash Flow Analysis and Financial Functions in Excel

The financial and economic analysis of investment projects is typically carried out using the technique of discounted cash flow (DCF) analysis. This module introduces concepts of discounting and DCF analysis for the derivation of project performance criteria such as net present value (NPV), internal rate of return (IRR) and benefit to cost (B/C) ratios. These concepts and criteria are introduced with respect to a simple example, for which calculations using MicroSoft Excel are demonstrated.

Performance of european socially responsible funds during market crises: evidence from France

This paper investigates the performance, investment styles andmanagerial abilities of French socially responsible investment (SRI) funds investing in Europe during crisis and non-crisis periods. Our results show that SRI funds significantly underperformcharacteristics-matched conventional funds during non-crisis periods, but match the performance of their peers duringmarket downturns. The underperformance of SRI funds during good economic states is driven by funds that use negative screens, since funds that use only positive screens performsimilarly to conventional funds across differentmarket conditions. SRI and conventional funds showsignificant differences in risk exposures during non-crisis periods but exhibit much more similar investment styles during crises. Furthermore,we find little evidence of significant differences inmanagerial abilities during bad economic states. Yet, during non-crisis periods, SRI and conventional fund managers exhibit significantly different style-timing abilities and these differences are also related to screening strategies.

A System Dynamics-Based Simulation Experiment for Testing Mental Model and Performance Effects of Using the Balanced Scorecard

This study develops a theoretical model that explains the effectiveness of the balanced scorecard approach by means of a system dynamics and feedback learning perspective. Presumably, the balanced scorecard leads to a better understanding of context, allowing managers to externalize and improve their mental models. We present a set of hypotheses about the influence of the balanced scorecard approach on mental models and performance. A test based on a simulation experiment that uses a system dynamics model is performed. The experiment included three types of parameters: financial indicators; balanced scorecard indicators; and balanced scorecard indicators with the aid of a strategy map review. Two out of the three hypotheses were confirmed. It was concluded that a strategy map review positively influences mental model similarity, and mental model similarity positively influences performance.

Changes in the influence of board characterisitcs on corporate results due to the recent global financial crisis

The main purpose of this study is to analyse the changes caused by the global financial crisis on the influence of board characteristics on corporate results, in terms of corporate performance, corporate risk-taking, and earnings management. Sample comprises S&P 500 listed firms during 2002-2008. This study reveals that the environmental conditions call for different behaviour from directors to fulfil their responsibilities and suggests changes in normative and voluntary guidelines for improving good practices in the boardroom.

Do economic and financial firm's situation affect the quality if financial reports?

We investigate whether firms’ economic and financial situation influence the Quality of their Financial Reports (FRQ). FRQ is fundamental for investors and it affects the international capital movements [Bradshaw et al. (2004)] and Gelos and Wei (2005)]. Following Schipper and Vicent (2003) we use two issues to access earnings quality: abnormal accruals and earnings persistence. For seventeen European countries, we find evidence that the economic performance affects FRQ. Big firms and those with high current earnings exhibit better financial information. These results are robust since they don’t depend on FRQ proxy and we have the same evidence when we estimate regression with economical and financial factors separately or together. About financial situation, it seems not to affect FRQ. However, in high leveraged firms, the capital structure becomes determinant.

The effect of financial reports’ auality on Ffrm’s rerformance

We analyse whether the quality of firms’ Financial Reports (FRQ) produces any effect on their performance. Bradshaw et al. (2004) and Gelos and Wei (2005) call attention to the fact that the international capital movements is affected by FRQ. Following Schipper and Vicent (2003) we use the abnormal accruals to access earnings quality. For seventeen European countries, we found evidence that FRQ produces a positive impact on firm’s performance. This finding indicates that mangers are not opportunists and tends to make decisions to defend the firm’s best interests. This result is robust since it does not depend on the accounting firms’ performance proxy (ROA/ROE). In addition, it is also consistent when we use data in time series and in cross-sectional and when we estimate regression with lagged or the current year information about abnormal accruals.

Avaliação da performance empresarial: as métricas tradicionais versus as métricas baseadas em valor

Mestrado em Controlo e Gestão dos Negócios

Residential property loans and performance during property price booms: evidence from European banks

Understanding the performance of banks is of the utmost relevance, because of the impact of this sector on economic growth and financial stability. Of all the different assets that make up a bank portfolio, the residential mortgage loans constitute one of its main. Using the dynamic panel data method, we analyse the influence of residential mortgage loans on bank profitability and risk, using a sample of 555 banks in the European Union (EU-15), over the period from 1995 to 2008. We find that banks with larger weights of residential mortgage loans show lower credit risk in good times. This result explains why banks rush to lend on property during booms due to the positive effects it has on credit risk. The results show further that credit risk and profitability are lower during the upturn in the residential property price cycle. The results also reveal the existence of a non-linear relationship (U-shaped marginal effect), as a function of bank’s risk, between profitability and the residential mortgage loans exposure. For those banks that have high credit risk, a large exposure of residential mortgage loans is associated with higher risk-adjusted profitability, through lower risk. For banks with a moderate/low credit risk, the effects of higher residential mortgage loan exposure on its risk-adjusted profitability are also positive or marginally positive.

Residential property loans and performance during property price booms: evidence from European

Understanding the performance of banks is of the u tmost importance due to the impact the sector may have on economic growth and financial stability. Residential mortgage loans constitute a large proportion of the portfolio of many banks and are one of the key assets in the determination of performance. Using a dynamic panel model , we analyse the impact of res idential mortgage loans on bank profitability and risk , based on a sample of 555 banks in the European Union ( EU - 15 ) , over the period from 1995 to 2008. We find that banks with larger weight s in residential mortgage loans display lower credit risk in good market conditions . This result may explain why banks rush to lend on property during b ooms due to the positive effect it has on credit risk . The results also show that credit risk and profitability are lower during the upturn in the residential property cy cle. Furthermore, t he results reveal the existence of a non - linear relationship ( U - shaped marginal effect), as a function of bank’s risk, between profitability and residential mortgage exposure . For those banks that have high er credit risk, a large exposur e to residential loans is associated with increased risk - adjusted profitability, through a reduction in risk. For banks with a moderate to low credit risk, the impact of higher exposure are also positive on risk - adjusted profitability.

As métricas de avaliação da performance e a sua contribuição na tomada de decisão, na concessão de crédito e avaliação de risco, numa instituição bancária

Mestrado em Contabilidade e Gestão das Instituições Financeiras

A gestão baseada no valor: Métricas tradicionais e medidas de performance ajustada ao risco. Risk Adjusted Return on Capital (RAROC) - Aplicação prática à actividade bancária

Mestrado em Contabilidade e Gestão das Instituições Financeiras

Inovação tecnológica e performance empresarial

Mestrado em Controlo e Gestão de Negócios