Thomas M. Krueger

An Analysis of Working Capital Management Results Across Industries

Firms are able to reduce Þnancing costs and/or increase the funds available for expansion by minimizing the amount of funds tied up in current assets. We provide insights into the performance of surveyed Þrms across key components of working capital management by using the CFO magazineOs annual Working Capital Management Survey. We discover that signiÞcant differences exist between industries in working capital measures across time. In addition, we discover that these measures for working capital change signiÞcantly within industries across time.

Contemporaneous relationship between corporate reputation and return

Purpose - The purpose of this paper is to examine the contemporaneous relationship between changes in corporate reputations and stock prices. Design/methodology/approach - The Harris Interactive Reputation Quotient Findings - The results provide evidence that, in the aggregate, firm reputations are procyclical. Additionally, firms with improved reputations enjoy lower volatility in their stock prices than firms with diminished reputations. Research limitations/implications - Due to the Harris Poll Online methodology, it is not clear that the price changes occur concurrently with the change in reputation. Originality/value - This paper contributes to the finance literature by examining the effect of a change in corporate reputation on stock price.

Why Do Different Countries Use Different Currencies

During long periods of history, countries have pegged their currencies to an international standard (such as gold or the U.S. dollar), severely restricting their ability to create money and affect output, prices, or government revenue. Nevertheless, countries generally have maintained their own currencies. The paper presents a model where agents have heterogeneous preferences—that are private information—over goods of different national origin. In this environment, it may be optimal for countries to have different currencies; we also identify conditions where separate national currencies do not expand the set of optimal allocations. Implications for a currency union in Europe are discussed.

Exchange rate movements and inflation performance : the case of Italy

This paper presents an empirical model to study the response of wages and prices to movements in the nominal exchange rate. A four-equation model is applied to Italian data to evaluate the response of tradeable goods prices, consumer prices, and wages following the lira`s exit from the ERM in the fall of 1992. The model tracks reasonably well the inflation performance of tradeables, especially import prices. But it is argued that structural changes in the labor market contribute to an overprediction of price and wage inflation.

Investment Merits of the World's Most Admired Firms

One criterion for Fortune magazines selection of “the worlds most admired firms” is that these firms have the “guts” to “take risks so bold that they may cause shareholders to question their sanity.” The question posed in this article is whether investors would be sane to select these firms for their portfolios. The authors investigate the raw and risk-adjusted returns of the selected industry leaders over single- and multiple-year holding periods prior to and after the surveys release, and test whether an announcement effect occurs around the public release of the survey. The results indicate that while these firms do outperform the S&P 500 over most time periods, their returns do not differ from a more appropriate matched sample, based on market capitalization and SIC codes. There is little evidence of a market reaction to the surveys release.

Net Selectivity Revisited: An Extension

In this critique of Kochman and Badarinathis study (1993) of net selectivity, mutual funds are not found to have a return distribution exhibiting limited semivariance when monthly return data are used. Several funds are overrated, however, in the sense that they have negative semivariance-adjusted excess returns, despite having positive beta-adjusted excess returns. Similar results are obtained using the Standard and Poors 500 Index, which was employed by Kochman and Badarinathi, and the Wilshire 5000.

The Influence of Insurance Company Earnings and Dividends in Establishing Stock Price Floors and Ceilings: Further Evidence Based Upon Industry Sector Classifications

Prior research regarding the influence of dividends and earnings on stock prices in the insurance industry is extended through comparison across insurance industry sectors. Dividends and earnings appear to have different impacts across sectors and at the high versus low levels of the annual stock price trading range.