Template-Type: ReDIF-Article 1.0 Author-Name: Cheedradevi Narayanasamy Author-Name: Izani Ibrahim Author-Name: Yeoh Ken Kyid Title: INDIVIDUAL INVESTORS PARTICIPATION AND DIVERGENCE OF OPINION IN NEW ISSUE MARKETS: EVIDENCE FROM MALAYSIA Abstract:We investigate the effects of individual investors participation on after-market divergence of opinion (DOP) for 269 Malaysian fixed-price initial public offerings (IPOs). Our findings show that individual investor participation moderates the relationship between initial performance and after-market investors opinion. Furthermore, our findings suggest that individual investors who participate in initial public offerings dispose their holdings quickly to take advantage of DOP in the after-market. However, the aftermarket investors are not willing to pay higher for IPOs sold by the participating individual investors. Our analysis across market conditions shows that the initial performance of IPOs with greater individual investor participation in (i) hot issues is inversely related to after-market DOP and, (ii) cold issues is positively related to after-market DOP (indicating signs of aversion to losses). Classification-JEL: G02, G11, G14, G18, G12, L10 Keywords: Divergence of Opinion, Individual Investor Participation, Post-IPO Performance, Offer Turnover, Underpriced IPOs, Loss Aversion Journal: The International Journal of Business and Finance Research Pages: 1-22 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:1-22 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Moslares Author-Name: E. M. Ekanayake Title: THE EFFECT OF REAL EXCHANGE RATE VOLATILITY ON EXPORTS IN THE BALTIC REGION Abstract: In this paper we analyze the effects of the real exchange rate volatility on exports in the Baltic region. The study focuses on three countries in the Baltic region, namely, Estonia, Latvia, and Lithuania, and uses quarterly exports of these countries to their major trading partners over the period from 1993Q1 to 2014Q4. It uses both the panel co-integration analysis and the method of bounds testing or the Autoregressive Distributed Lag (ARDL) approach to co-integration analysis to estimate the short-run and long-run effects of the real exchange rate volatility on exports. Our results reveal that exports depend positively on the levels of foreign economic activity but negatively on relative prices and real exchange rate. However, the exchange rate volatility tends to provide mixed effects. Furthermore, the effects of exchange volatility are found to yield mixed effects both in the short-run and the long-run. The results also indicate that the effects vary from country to country Classification-JEL: F14, F31 Keywords: Baltic Countries, Exports, Exchange Rate Volatility, GARCH Volatility Measures, Panel Unit Roots, Panel Co-integration Journal: The International Journal of Business and Finance Research Pages: 23-38 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:23-38 Template-Type: ReDIF-Article 1.0 Author-Name: Chun-An Li Author-Name: Min-Ching Lee Author-Name: Ju-Hua Liu Title: LABEL CO-MOVEMENT: COMPONENT STOCK INCLUSION AND EXCLUSION BETWEEN DIFFERENT EXCHANGE-TRADED FUNDS Abstract: This study examines the co-movement phenomenon in Taiwan’s stock markets. We investigate this phenomenon both before and after the inclusion and exclusion of component stocks from the Taiwan 50 or Taiwan 100 indices in terms of changes in component stock returns and turnover co-movement relationships. In addition to providing a sample analysis, this study explores consistency in changes to comovement relationships owing to market status (bull or bear) or investor sentiment (overly optimistic, optimistic, pessimistic, and overly pessimistic). The empirical results reflect the stocks’ returns or turnover. For example, apart from periods of overly pessimistic sentiment, including and excluding components in the Taiwan 100 or Taiwan 50 indices generally reveals a strengthened co-movement relationship with the new group and a weakened link with the original group, regardless of a bull or bear market. The result is consistent with Boyer’s (2011) label argument on co-movement. However, a subtler perspective reveals a rather insignificant change in the co-movement relationship for stock returns as components move from the Taiwan 50 to the Taiwan 100 index Classification-JEL: G12 Keywords: Co-Movement, Label Effect, Exchange-Traded Funds Journal: The International Journal of Business and Finance Research Pages: 39-56 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:39-56 Template-Type: ReDIF-Article 1.0 Author-Name: Wenchien Liu Title:DETERMINANTS AND MARGINAL VALUE OF CORPORATE CASH HOLDINGS: FINANCIAL CONSTRAINTS VERSUS CORPORATE GOVERNANCE Abstract: Previous studies indicate that financial constraints and corporate governance are main factors affecting corporate cash holdings. This paper simultaneously examines the interactive influences of financial constraints and corporate governance on corporate cash holdings among publicly traded U.S. firms. We find that firms with good governance hold more cash than do firms with poor governance, regardless of financial constraints. Furthermore, the cash holdings of financially constrained firms with good corporate governance are the highest among all firm types in this study. The impact of corporate governance on firm value is statistically strong only among firms with financial constraints. Our results indicate that financial constraints are a more crucial determinant of corporate cash holdings than is corporate governance. These findings have implications that firms with financial constraints should pay more attention to keep optimal liquidity, especially avoiding the unnecessary waste due to agency problems Classification-JEL: G32, G34 Keywords: Corporate Cash Holdings, Corporate Governance, Financial Constraints Journal: The International Journal of Business and Finance Research Pages: 57-70 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:57-70 Template-Type: ReDIF-Article 1.0 Author-Name: Walid Masadeh Author-Name: Ahmad Y. A. Khasawneh Author-Name: Wasfi AL Salamat Title: WORKING CAPITAL VARIATIONS BY INDUSTRY AND IMPLICATIONS FOR PROFITABLE FINANCIAL MANAGEMEN Abstract: Data on annual working capital and profitability for 5 years, 2010-2015, in 7000 U.S. companies were grouped into three industrial sectors, retailing, production, and services. Mean current and inventory ratios and profitability were calculated for each industrial sector, and the correlation and regression tests were run for data analysis. No significant difference in profitability was found between industries. However, within industries, a correlation was found between current ratio, sales inventory ratios, and profit margin. A positive correlation was found between current and sales inventory ratios and profit margin in the production industry. In the retail industry, no correlation was found between current ration and profit margin, but a negative correlation was found between sales inventory ratio and profit margin. In the services industry, a correlation was found between current ratio and profit margin, and a negative correlation between sales inventory and profitability. High inventory volumes are profitable to manufacturing and production industries. Low inventory volumes are profitable in retail industries. None, if not very little inventory is profitable for the services industry. From the findings, a predictive model was developed for profitable working capital management. Further research that tests the model is suggested using data from other companies and countries Classification-JEL: G31, G34 Keywords: Working Capital, Current Ratio, Profitability, Industry Journal: The International Journal of Business and Finance Research Pages: 71-80 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:71-80 Template-Type: ReDIF-Article 1.0 Author-Name: Eric C. Lin Title: THE EFFECT OF DOW JONES INDUSTRIAL AVERAGE INDEX COMPONENT CHANGES ON STOCK RETURNS AND TRADING VOLUMES Abstract: This study examines the impact of index membership changes in Dow Jones Industrial Average (DJIA) Index on the return and trading volume of the affected stock. We make two key contributions to the literature. First, we employ a robust event study methodology based on Fama-French Momentum Model with EGARCH to explore the price/volume dynamics associated with DJIA Index additions and deletions. Second, we extend earlier work by incorporating all index reconstitution announcements after Dow Jones & Company began preannouncing index changes in 1990. Our results show that index additions (deletions) experience temporary increases (decreases) in stock prices following the announcement. The abnormal returns surrounding the announcements are economically and statistically significant. In addition, both inclusions and removals lead to temporary abnormal trading volume increases in the post-announcement period. However, the stock prices and trading volumes revert within a few trading days. Our findings are consistent with the price pressure hypothesis as the documented abnormal returns and trading volumes are not permanent. Classification-JEL: G12, G14 Keywords: Dow Jones, Event Study, Index Reconstitution; Fama-French Momentum Model, Abnormal Return and Volume Journal: The International Journal of Business and Finance Research Pages: 81-92 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:81-92 Template-Type: ReDIF-Article 1.0 Author-Name: Chong-Chuo Chang Author-Name: Shieh-Liang Chen Author-Name: Aini Farmania Author-Name: Feng-Tse Tsai Author-Name: Ping-Chao Wu Title: CORPORATE GOVERNANCE AND PRODUCT MARKET POWER: EVIDENCE FROM TAIWAN Abstract: The objective of this study is to investigate how a firm’s corporate governance affects its product market power. Adopting firms listed in the TSE and the OTC Exchange from 1996 to 2011, we find three main results. Firstly, better corporate governance leads to stronger product market power. Secondly, firms with higher research and development expenditure return on assets and market to book value have stronger market power while large and high leveraged firms are weak in product market power. Last but not least, cash holding plays an important role in deciding firms’ product market power. Companies with a high level of cash holding enjoy better product market power Classification-JEL: G34 Keywords: Corporate Governance, Product Market Power, Agency Problems, Cash Holdings Journal: The International Journal of Business and Finance Research Pages: 93-104 Volume: 12 Issue: 1 Year: 2018 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v12n1-2018/IJBFR-V12N1-2018-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:93-104