Bruce Seifert

Having, giving, and getting: Slack resources, corporate philanthropy, and firm financial performance

This study investigates financial correlates of corporate philanthropy in Fortune 1000 companies using structural equation modeling. The results suggest that cash flow (one of the most discretionary types of organizational slack) has a significant impact on a firm’s cash donations to charitable causes, but monetary donations do not affect firm financial performance. These findings support the accepted view of corporate philanthropy as a discretionary social responsibility and the traditional thinking about firm giving in the business and society literature—that doing well enables doing good. Contrary to some contemporary thinking, the findings imply no significant effect on profits from corporate generosity.

Comparing Big Givers and Small Givers: Financial Correlates of Corporate Philanthropy

In a departure from the traditional studies of corporate philanthropy that focus on board composition, advertising, and social networks, the authors investigate the financial correlates of corporate philanthropy. The research design controls for firm size and industry while observing firms from a variety of industries. The sample contains matched pairs of generous and less generous corporate givers. The authors find, as hypothesized, a positive relationship between a firms cash resources available and cash donations, but no significant relationship between corporate philanthropy and firm financial performance, regardless of whether corporate philanthropy is measured as cash payouts or the aggregate contributions that charities actually receive, and regardless of whether financial performance is gauged using accounting measures or market measures. Whereas the link between available resources and corporate philanthropy is well accepted in the literature on corporate social responsibility, it has been rarely tested and never so definitively found as in this research.

Governance and corporate philanthropy: Restraining Robin Hood?

Although corporate decision makers may justify charitable contributions on strategic grounds, extremely large corporate philanthropic contributions may beperceived by shareholders as unnecessary. If stockholders attempt to limit corporate philanthropy, then governance mechanisms should put a cap on giving amounts. Using a matched-paired sample to control for industry and company size, theauthors compared big givers and small givers. The authors find that blockholders and institutional owners limit corporate philanthropy. This suggests that high levels of corporate philanthropy may be perceived as excessive by influentialstockholders, and some governance mechanisms act to curtail it.

Are Exporting Firms Modifying Their Product, Pricing and Promotion Policies?

Firms in the electrical, machine tool builders, food processing equipment, and fluid power industries were surveyed concerning their export marketing policies. Except in promotion, most of these industrial firms follow a standardised marketing approach. Their export budgets are smaller than their domestic budgets. Also the firms indicated that they were only lukewarm about their overall export performance; those most satisfied with their export performance tend to be larger, more experienced in exporting, or spend equal or greater amounts on export promotion than on comparable domestic product line promotion.

Distribution properties of Latin American black market exchange rates

Abstract This paper conducts a statistical analysis of the distribution properties of black market exchange rate changes for 12 Latin American currencies. The infinite variance stable law hypothesis is tested using a regression- type technique to estimate the parameters of the stable Paretian distribution. Strong evidence is found supporting this hypothesis. A separate analysis of extreme observations using a robust statistical procedure further supports these findings.

Pecking Order Behavior in Emerging Markets

This paper examines the validity of the pecking order hypothesis in 23 emerging market countries. Emerging market countries would appear to be an ideal setting for the pecking order hypothesis to hold because of the presence of strong asymmetric information issues and agency costs. We observe, however, little support for the pecking order hypothesis as the primary financing theory for all emerging market firms. Firms in these countries finance their deficit mainly with equity, the opposite of what would be expected under this hypothesis. However, we do find support for the pecking order for firms in emerging market countries that suffer the most from either asymmetric information issues and/or agency costs. Our findings are consistent with the idea that the environment the firm operates in influences the financial decisions the firm makes.

Market efficiency, purchasing power parity, and black markets: Evidence from latin american countries

ZusammenfassungMarkteffizienz, KaufkraftparitÄt und SchwarzmÄrkte: Evidenz aus lateinamerikanischen LÄndern. - Die Arbeit verwendet den von Rogalski/Vinso und Roll entwickelten theoretischen Rahmen, um das Verhalten der WÄhrungen von Kanada und den USA sowie von ausgewÄhlten lateinamerikanischen LÄndern auf dem dortigen Schwarzmarkt zu untersuchen. Abweichungen von der KaufkraftparitÄt werden analysiert, ebenso die Beziehungen zwischen diesen Abweichungen, den Wechselkursen und Inflationsdifferentialen, um die Vereinbarkeit der KaufkraftparitÄt mit der Konzeption der effizienten MÄrkte und mit dem monetÄren Ansatz zu prüfen. Die Ergebnisse stützen im allgemeinen die Hypothese der effizienten MÄrkte und liefern interessante Informationen über eine normalerweise vernachlÄssigte Gruppe von Wechselkursen.RésuméEfficacité de marché, parité de pouvoir d’achat et marchés noirs: Evidence des pays latino-américains. - Les auteurs utilisent le cadre théorique développé par Rogalski/ Vinso et Roll pour analyser la performance des monnaies de marché noir des pays latinoaméricains sélectionnés ainsi que des monnaies des E. U. et de Canada. Le comportement des déviations de la parité du pouvoir d’achat (PPA) est examiné aussi bien que les relations entre ces déviations, les taux de change et les différences d’inflation pour analyser la compatibilité de la PPA avec la conception des marchés efficients et l’approche monétaire. Les résultats supportent généralement l’hypothèse de marché efficient et offrent des informations intéressantes sur un groupe des taux de change généralement négligé.ResumenMercados eficientes, paridad del poder adquisitivo y mercados negros: Evidencia de países latinoamericanos. - En este trabajo se utiliza el marco teórico desarrollado por Rogalski/Vinso y por Roll para analizar el funcionamiento de mercados negros seleccionados en Latinoamérica, los EEUU y Canadá. Se examina el comportamiento de las desviaciones de la paridad del poder adquisitivo (PPA) como también las relaciones entre las desviaciones, los tipos de cambio y las diferencias entre las tasas de inflatión con el fin de investigar la compatibilidad del PPA con los enfoques de mercados eficientes y monetario. Los resultados obtenidos apoyan en general la hipótesis de mercodos eficientes e iluminan aspectos interesantes de tipos de cambio habitualmente obviados.

Impact of Headquarters Relocation on the Operating Performance of the Firm

Communities often compete fiercely for corporate headquarters relocations. Although headquarters relocations affect both the losing and winning communities, the authors investigate only the impact of corporate headquarters relocation on the subsequent financial performance of the firm. Prior research using event study methodology suggests that headquarters relocation announcements, when controlling for motivation of relocation, significantly affect short-term stock market reactions. Unlike previous research in this area, the authors use an industry-matched-firm comparison and investigate the impact of relocation on select performance indicators over a 6-year period surrounding the relocation. Using a sample of 167 corporate headquarters relocations during the 1990s, they find little evidence of improved operating performance after headquarters relocation. They also test for the influence of distance as a factor and find that the distance relocated has no significant impact.

Stockholder returns and international acquisitions of financial firms: An emphasis on banking

The wealth effects for shareholders of American financial firms involved in foreign acquisitions and also the wealth effects for shareholders of U.S. target firms acquired by foreign concerns are the topics of this study. The findings indicate that stockholders of U.S. bidding financial firms (and its subset of banks) earn neither abnormal gains nor suffer abnormal losses upon the announcement of an acquisition or regulatory approval. On the other hand, stockholders of U.S. target financial firms (and its subset of banks) earn significant abnormal profits at both the announcement of the proposed acquisition and the announcement of regulatory approval of the acquisition. The wealth effects for these two samples are also compared to samples in which both parties to the acquisition are U.S. firms. The research suggests that there is no significant difference in the size of the announcement gains or losses for either stockholders of the target or bidding firms based on whether the acquisition is foreign or domestic. These findings conflict with prior research which indicates that, for firms in general, stockholders of U.S. targets earn significantly greater wealth benefits when they are acquired by foreign firms than by domestic firms. Overall, these results are consistent with a competitive market for acquisitions of financial firms in which buyers do not earn or lose at the announcement of an acquisition, and in which abnormal gains are received only by the sellers.

The role of economic freedom in explaining penetration of consumer durables

This study examines the link between economic freedom (a measure of government intervention) and the penetration of three durable goods (televisions, radios and automobiles) across countries. After controlling for the influence of income, there is a significant relationship between greater amounts of economic freedom and durable penetration for these three products. Practical implications are provided for both governments and global marketers.