Lynette Knowles Mathur

The Interrelationship between Culture, Capital Structure, and Performance: Evidence from European Retailers

Abstract Research has shown that capital structure influences firm performance. It is generally accepted that variables other than capital structure also influence corporate performance. While this line of research has been extended to an international setting, research on the influence of national culture on capital structure is rather sparse, an issue addressed in this article. Using data from retailers in 14 European countries, which are grouped into four cultural clusters, it is shown that capital structures for retailers vary by cultural clusters. This result holds in the presence of control variables. Using both financial and operational measures of performance, it is shown that capital structure influences financial performance, although not exclusively. A negative relationship between capital structure and performance suggests that agency issues may lead to use of higher than appropriate levels of debt in the capital structure, thereby producing lower performance.

An Analysis of the Wealth Effects of Green Marketing Strategies

Abstract Event study methodology is used to examine the wealth effects, or stock price reactions, to corporate announcements of green marketing activities. Two procedures for measuring stock price reactions and two different tests of significance are used in the study. The results for the sample of 73 firms show that the market value for the average firm in the sample declines by 3.14% during the period from 10 days prior to 10 days after the news is announced. Announcements related to green products, recycling efforts, and appointments of environmental policy managers result in insignificant stock price reactions. However, announcements for green promotional efforts produce significantly negative stock price reactions. Sampling by financial and operational characteristics shows that firms with higher growth in earnings, larger firms, and firms with higher advertising-to-sales ratios experience relatively less negative stock price reactions. Managerial implications of the results and directions for future research are also presented.

Services advertising and providing services on the Internet

The stock price reactions to announcements of advertising services and providing services on the Internet are examined in this paper. The overall results suggest that Internet‐related activities are generally desirable. However, the results suggest that announcements of services advertising on the Internet are not perceived as an important component of a service firm’s promotional strategy. On the other hand, announcements of providing services on the Internet produce an average significant stock price reaction of 0.85 percent. This result suggests that providing services on the Internet should be an important component of a service firm’s marketing strategy. When the sample is segmented by firms’ prior financial performances, the observed stock price reactions are significantly positive for firms with superior prior financial performances. These results suggest that service firms with above average financial performances would benefit from a presence on the Internet.

Shareholders' Gains from Corporate Expansion to the Republics of the Former Soviet Union

Recent political, economic, and social changes in the Republics of the Former Soviet Union (RFSUs) have created opportunities for US firms to expand their presence there. This study provides evidence on how shareholder wealth is affected by expansion into the RFSUs. The results show that tangibility of assets influences excess returns. Finally, the results indicate that higher excess returns are realized when managerial interests are aligned with those of shareholders.

Managing Expansion to Transition Economies: The Evidence from Eastern Europe

Abstract Recent political, economic, and social changes occurring in Eastern Europe are providing opportunities for Western firms to expand to this region. This study presents evidence on the wealth effects associated with expansion by U.S. firms to Eastern European countries. The results of this study show that differential wealth effects are associated with announcements of different modes of expansion, and with country of expansion. The results suggest that Hungary and Poland are important for expansion to Eastern Europe, and that joint ventures should be the preferred mode of expansion for U.S. firms seeking to expand to Eastern Europe. The results also suggest that investors are able to discern between different levels of country risk.

Are Foreign-Trade Zone Users More Cost Competitive in International Marketing?

Foreign-trade zone (FTZ) use by international marketers vrovides them with the mlential to gain cost savings and increak operating efficiencies. However, no empirical research has yet been conducted to examine whether operating cost efficiency is better for international marketers using FTZs (FTZ firms) than those not using FTZs (non-FTZ firms). The operating cost efficiency of FTZ and non-FIZ firms is examined through a comparison of their cost structures. Using translog production functions, the surprising results in this paper suggest that FTZ firms tend to be less efficient than non-FTZ firms. Some possible explanations for this result are advanced, and public policy implications are discussed.