Ramzi Benkraiem

Market reaction to sporting results The case of European listed football clubs

Purpose – This paper aims to study the stock market reaction to sporting results of European listed football clubs. Specifically, it tries to examine the impact of the sporting results on the stock market valuation in terms of abnormal returns and trading volume around the dates of matches. Design/methodology/approach – This paper undertakes an event study around the dates of 745 matches played by European listed football clubs. Findings – The empirical analysis shows that the sporting results of listed football clubs affect both the abnormal returns and the trading volume around the dates of matches. The movement (positive or negative) and the time when the impact occurs (before or after the match) differ according to the nature of the result (defeat, draw or win) and the match venue (home or away). Findings in this study imply that the success of investments in listed football clubs requires a regular follow-up of their sporting performances. Originality/value – This paper is one of the first to take into consideration the nature of sporting results (defeat, draw or win) according to the match venue (home or away) in order to study the market reaction in terms of both abnormal returns and trading volume. Unlike some previous studies, it is not limited to studying a single specific context but considers listed football clubs from all over Europe.

How do corporate characteristics affect capital structure decisions of French SMEs

Purpose – The purpose of this paper is to study the influence of various corporate characteristics on the capital structure of French small and medium‐sized enterprises (SMEs). Design/methodology/approach – OLS fixed‐effect regressions are used to estimate the influence of SME corporate characteristics on three capital structure measures, namely total, long‐term and short‐term debt. Findings – The findings suggest that size, profitability, growth and tangibility of assets influence, in a significant way, the capital structure of French SMEs. Furthermore, when decomposing the sample into two groups: small (1) and medium‐sized (2) firms, the findings indicate that corporate characteristics affect the capital structure of these two subsamples in the same direction, but with different amplitudes. Originality/value – The evidence presented and discussed in this paper extends the existing literature. From an academic perspective, the methodological approach and the empirical results provide a level of analysis unmatched by the previous research on French firms. Moreover, the findings can add to the knowledge and the understanding of SME corporate managers. They can provide useful information to assist them in their decision making regarding the capital structure of their firms at a time when difficulties of SME financing are more and more evoked in the French context.

Board director disciplinary and cognitive influence on corporate value creation

Purpose This paper aims to investigate board director disciplinary and cognitive influence on corporate value creation. Design/methodology/approach Fixed-effect regressions are used to check whether gender diversity, education, independence and size of the board of directors affect measures of corporate value creation. Findings The empirical results show that corporate value creation is positively influenced by the cross effect of the board independence and the presence of women. They also point out a positive impact of the cross effect of board independence and management education. They reveal that the board of directors contributes significantly to corporate value creation, particularly when there is a mix of independent, female and management-qualified directors. Originality/value The evidence presented and discussed in this paper should be of interest to managers and regulators. The methodological approach and the empirical results extend the existing literature. They enrich the limited empirical research devoted to this theme, especially in a continental European context, i.e. France. They shed light on the effect of board of directors’ disciplinary and cognitive influence on corporate value creation.

Board independence, gender diversity and CEO compensation

This paper aims to investigate the joint effect of board independence and gender diversity on the effectiveness of boards in monitoring CEO compensation in a continental European context, i.e. France.,Fixed-effect regressions are used to study the impact of board independence, gender diversity and their interaction, i.e. the proportion of female independent directors on the different components of CEO compensation (total, fixed and variable).,The authors observe that both the proportions of independent directors and women sitting on the boards positively influence the various components of CEO compensation. However, the interaction of these factors, i.e. the proportion of female independent directors, is negatively associated with CEO compensation. These results suggest that independent women directors improve board effectiveness in monitoring CEO compensation, especially its fixed component.,The results of this research help to elucidate the importance of women being appointed to boards as independent directors to properly monitor managerial pay. These results provide support to the approach of the French Cope-Zimmerman law of January 2011, which promotes female representation on boards as independent directors to enhance board decision-making. Thus, evidence presented and discussed in this paper should provide useful insights for academics, corporate managers and regulators.

Corporate leverage and the terms of employment: evidence from French small businesses before and during the global crisis

ABSTRACT Despite the particular importance of corporate leverage and human capital for small businesses, little is surprisingly known about the relationship between these two factors for this category of firms. Accordingly, this article tries to fill this gap by investigating the relationship between leverage and human capital examined through the investment in employee-related expenditure. The analysis focuses on a sample of French listed small businesses before and during the recent global crisis. The empirical findings show that leverage serves as a monitoring mechanism of corporate managers prone to over or underinvest in employee-related expenditure to obtain private benefits. Due notably to the availability of debt, this monitoring is more effective before the crisis period, especially for low growth firms. Overall, these results provide support to the theory that leverage has a disciplining role. Simultaneously, they lead to moderate the strength of this role according to the global crisis. Thus, they should provide useful insights for academics, regulators, managers and credit institutions.

Small business access to bank leverage under crisis circumstances

This article relies on a dynamic theoretical framework to empirically investigate corporate drivers of small business access to bank leverage during the global crisis period. The empirical analysis leads to several interesting results. In particular, indicators of size and tangibility are positively related to bank leverage proxies. Moreover, they are by far more important than those of profitability, growth and earnings volatility in explaining access to bank leverage. These findings lay stress on the need of small businesses, above all, to provide sufficient guarantees when they wish to incur new bank leverage under crisis circumstances. Thus, they contribute to the debate on small business financing at a time when consequences of the global crisis on this category of firms are more and more evoked.

HOW DOES CORPORATE VOLUNTARY DISCLOSURE AFFECT ASYMMETRIC INFORMATION AND ADVERSE SELECTION

This paper investigates whether the extent of corporate voluntary disclosure mitigates asymmetric information and adverse selection in the Euronext Paris stock exchange. We apply a disclosure index as a proxy for the extent of voluntary disclosure and use different spread measures to estimate both asymmetric information and adverse selection. Our findings show a negative relationship between the disclosure index and asymmetric information and adverse selection proxies. An analysis of sub-indexes provides additional mixed results. Several asymmetric information measures are negatively related to the volume of financial, non-financial and voluntary governance information in corporate annual reports. Nevertheless, the effect of strategic information volume is statistically significant only for effective bid-ask spreads. On the whole, these results are consistent with the view that high corporate voluntary disclosure is associated with narrow spreads and low adverse selection costs.

Voluntary information disclosure and sell-side analyst coverage intensity

Purpose - This paper aims to investigate whether a high level of voluntary disclosure attracts sell-side analysts. In other words, the authors check whether the number of analysts following a given firm increases with the extent of voluntary information that corporate managers provide in annual reports. Design/methodology/approach - The paper relies on regression analyses to study the relationship between the level of coverage by sell-side analysts and the extent of voluntary disclosure for a sample of 155 non-financial firms listed on the Euronext Paris stock exchange and members of the SBF 250 index. Findings - The empirical results show that the number of analysts following a given firm increases with the extent of voluntary disclosure. Consequently, the authors conclude that analysts are interested in the volume of information provided voluntarily by corporate managers. Their interest varies across the voluntary-information categories (strategic, financial, non-financial and governance) disclosed in annual reports. Originality/value - This study extends previous research by investigating sell-side analysts’ preferences in terms of voluntary-information categories in annual reports. A better understanding of the effects of sub-categories of voluntary information is useful to corporate managers wishing to meet market expectations and attract sell-side analysts. In fact, the authors verify how each category of disclosed information (strategic, financial, non-financial and governance) affects the analyst coverage intensity. In addition, the authors apply our study in the rather interesting empirical setting that is France, which is characterized by a low investor protection and a large number of active analysts.

Football et Bourse : Analyse de la volatilité autour des annonces de résultats

This study investigates the relationship between Football and stock market by analyzing the volatility around the sporting result announces. The theoretical background is based on the importance of intangible assets in the football industry and the difficulty in evaluating them. The empirical analysis is based on the family of ARCH models and relates to a sample of football clubs listed on the AIM and included in the Dow-Jones STOXX Football index. The findings show that sporting performances have a significant impact on the stock market valuation of football clubs. The magnitude of the market reaction depends on the nature of the result.

Board Independence, Corporate Governance and Earnings Management in France

The financial markets increasingly look to corporate governance mechanisms to help guarantee reliable and accurate financial information. The evaluation of the effectiveness of this role is therefore an interesting empirical question. This question has been brought to the fore by recent financial scandals and made crucial by the recent changes in the French institutional context. It is from this standpoint that this chapter aims to examine the influence of the board independence and two other corporate governance mechanisms, namely the audit quality and the ownership structure, on earnings management as measured by discretionary accruals. The empirical findings show that the presence of independent directors can moderate the management of discretionary accruals. The Big 4 auditors can also limit this discretionary adjustment. However, no statistically significant relationship was observed between dispersion vs. concentration of ownership structure and these accruals. This study makes an interesting contribution by making it possible to evaluate empirically the effectiveness of the role of three important corporate governance mechanisms. It adds to the limited research into the relationship between corporate governance and earnings management in France. Thus, it should be of interest to academics as well as regulators in preparing and amending corporate governance laws.