Template-Type: ReDIF-Article 1.0 Author-Name: Kevin Lee Author-Name: Scott Miller Author-Name: Nicole Velasquez Author-Name: Christi Wann Title: The Effect of Investor Bias and Gender on Portfolio Performance and Risk Abstract: We survey 84 finance and accounting majors to determine the behavioral factors that males and females exhibit when making investment decisions. The survey results are linked to student performance in the Stock-Trak Global Portfolio Trading Simulation. We find that males and females exhibit different behavioral biases and these behavioral biases can ultimately affect investment performance. We also find evidence to support previous research showing that males are more risk tolerant than females. However, our findings indicate that this behavior may be due to a difference in the perception of the actual risk being taken rather than an inherent desire to engage in more risky behavior. Classification-JEL: D03, G02, G14 Keywords: Forecasting, agricultural economics Journal: The International Journal of Business and Finance Research Pages: 1-16 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-1.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:1-16 Template-Type: ReDIF-Article 1.0 Author-Name: Halil Kiymaz Title: Cross-Border Mergers and Acquisitions and Country Risk Ratings: Evidence From U.S. Financials Abstract: This study reports how country risk and macroeconomic conditions influence the wealth gains of U.S. financial firms involved in international mergers and takeovers. The findings suggest that U.S. financials experience weakly significant wealth gains around announcement date. The wealth gains are significant for takeovers in Latin America. There are also differences in wealth gains of subsector affiliations of financial firms. While banks experiencing wealth loss, both insurance and investment services firms having significant wealth gains. The country risk, including economic, political, and financial risk ratings, help to explain the wealth gains to financial bidders. Classification-JEL: G14, G15, G20, G34 Keywords: Financial Takeovers, Country Risk, Wealth Effects Journal: The International Journal of Business and Finance Research Pages: 17-29 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-2.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:17-29 Template-Type: ReDIF-Article 1.0 Author-Name: Kenneth Yung Author-Name: Hamid Rahman Author-Name: Qian Sun Title: Do Neglected Firms Suffer from an Information Deficit? Abstract: We study the presence and distribution of private information in neglected firm stocks using a measure of private information first suggested by Roll (1988). Our results suggest that there is no shortage of information on neglected firms for investors and that this private information forms part of the decision set for managerial decisions. Our results indicate a significant negative correlation between the amount of private information and certain important firm characteristics such as market size, cash flow, sales and return on assets. When the impact of private information is analyzed on the investment and payout policies of the neglected firms, the results indicate that private information in stock price has a significant impact on firm investment but not on payout. However, private information does affect payout but through interaction with firm cash flow. Finally we find that private information impact on firm investment is stronger in smaller as compared to larger neglected firms. Classification-JEL: G14, G35 Keywords: Neglected Stocks, Neglected Firms, Information Deficit Journal: The International Journal of Business and Finance Research Pages: 31-44 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-3.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:31-44 Template-Type: ReDIF-Article 1.0 Author-Name: Sandip Mukherji Author-Name: Youngho Lee Title: Explanatory Factors for Market Multiples and Expected Returns Abstract: Market multiples of the largest firms are most likely to reflect efficient pricing of stocks. For such firms, variations in market multiples should be largely explained by fundamental variables, and expected returns should be positively related to beta but not significantly related to other factors. This study shows that, for stocks in the Standard & Poor’s 100 index, fundamental factors explain almost all of the variations in price/book and price/sales multiples but only 25% of variations in forward price/earnings multiples. Expected returns are positively related to beta, as postulated by the capital asset pricing model. However, contrary to the expectations of the capital asset pricing model and the weak and semistrong forms of the efficient market hypothesis, expected returns are also significantly negatively related to prior returns and forward price/earnings multiples. These findings are surprising for a sample comprising the largest stocks. Classification-JEL: G11, G12 Keywords: Market Multiples, Expected Returns, Explanatory Factors Journal: The International Journal of Business and Finance Research Pages: 45-54 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-4.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:45-54 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Zhe Wang Title: This paper empirically tests the relation between a firm’s degree of accounting conservatism and its level of operating risk. This paper constitutes the first empirical study in the accounting literature to test the risk signaling theory of accounting conservatism which is recently proposed by Wang, O hOgartaigh and van Zijl (2010), who argue that a firm optimally selects a degree of accounting conservatism in order to signal its own operating risk to the capital market. Consistent with the signaling theory, this paper reports empirical evidence that US firms with a lower level of operating risk are more likely to adopt a higher level of accounting conservatism than are firms with a higher level of operating risk. This finding indicates that a signaling separating equilibrium indeed exists in the capital market, where firms use accounting conservatism as a signaling device. The findings of this paper highlights the important economic role that accounting conservatism plays in reducing the capital market’s information asymmetry with regard to the firm’s operating risk. Classification-JEL: G14, M40, M41 Keywords: Accounting Conservatism, Asymmetric Timeliness of Earnings, Basu Measure, Risk, Asset Volatility Journal: The International Journal of Business and Finance Research Pages: 55-68 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-5.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:55-68 Template-Type: ReDIF-Article 1.0 Author-Name: Hisham Handal Abdelbaki Title: Causality Relationship between Macroeconomic Variables and Stock Market Development: Evidence from Bahrain Abstract: This paper investigates the relationship between macroeconomic variables and Bahraini stock market development by using the Autoregressive Distributed Lag model. The development of a financial market is closely related to the overall development in the national economy. Well functioning financial system achieves efficiencies that provide good and easily accessible information, lower transaction costs and efficient resource allocation then boost economic growth. Many macroeconomic variables have significant effects on a stock market and its functions, development, and role in the national economy. The central bank actions, governmental policies and individual behavior affect the financial system development. For instance, monetary policy links with stock market development through affecting money supply, interest rates, investment activities in stocks and the market values of stocks. Expansion monetary policy raises money supply, decreases interest rates and raises investment in stocks and market values of stocks. A similar effect can be done by fiscal policy but the effect will be gone directly through interest rates and investment. The main findings of the paper are that income level, domestic investment, banking system development; private capital flows and stock market liquidity are important determinants of Bahraini stock market development. The results of the paper support the theoretical and empirical literature on macroeconomic variables and stock market development nexus. Classification-JEL: C32, C53, G15 Keywords: Macroeconomic Variables, Stock markets Development, Autoregressive Distributed Lag Model, Bahrain Journal: The International Journal of Business and Finance Research Pages: 69-84 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-6.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:69-84 Template-Type: ReDIF-Article 1.0 Author-Name: Hanene Ezzine Author-Name: Bernard Olivero Title: Evolution of Corporate Governance During the Recent Financial Crises Abstract: A domino effect can accelerate the spread of financial crises. Some firms, however, show better resistance than others thereby limiting the spread. Effective governance mechanisms enhance the ability of firms to absorb a stock market crisis. In a sample of Société des Bourses Françaises (SBF) 120 firms, significant changes in corporate governance scores are observed during the financial crises of 2006- 2008. We find that most French firms show a fairly satisfactory level of compliance with OECD governance principles. The results also suggest that stronger corporate governance practices should improve the visibility of the firm by the market. Classification-JEL: G01, G30, G34 Keywords: Governance, Corporate Governance, Financial Crises Journal: The International Journal of Business and Finance Research Pages: 85-100 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-7.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:85-100 Template-Type: ReDIF-Article 1.0 Author-Name: Jason West Title: This paper examines the structural components that characterize the price behavior and perceived arbitrage of the global thermal coal market. Index coal prices plus freight costs to India favor imports of Indonesian thermal coal however significant volumes are also imported from South Africa and Australia. The Indian energy market is characterized by homogeneous power plant technologies and coal procurement strategies which allows for seaborne coal brands to be benchmarked against a specific quality. In this study the index price of Australian, South African and Indonesian thermal coal is transformed using freight and quality adjustments to derive a measure for the expected electrical energy output in units of energy. The degree of market integration in the seaborne thermal coal market using the new price series is tested using cointegration analysis. The degree of convergence and the absolute level of arbitrage between major coal exporters are also tested using a recursive approach in the form of a Kalman filter. Using the transformation to units of energy the market is shown to be relatively integrated and the apparent arbitrage between exporters disappears when accounting for freight and coal quality differentials. This study challenges the common notion that thermal coal importers source material that has a freight price advantage and highlights the importance of coal quality differentials in power production Classification-JEL: G11, Q41 Keywords: Arbitrage, Thermal Coal, Energy Efficiency, Kalman Filter, Cointegration Journal: The International Journal of Business and Finance Research Pages: 101-120 Volume: 7 Issue: 1 Year: 2013 File-URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v7n1-2013/IJBFR-V7N1-2013-8.pdf File-Format: Application/pdf Handle: RePEc:ibf:ijbfre:v:7:y:2013:i:1:p:101-120