Search results for "Econometric"
showing 10 items of 3780 documents
Reactions of the Spanish capital market to qualified audit reports
2004
Since mandatory auditing of financial statements was first established in Spain, very few studies have been conducted to test the information content of audit reports in the Spanish capital market. The aim of this study is, then, to test empirically whether there is a relationship between audit qualifications and stock prices in the context of the Spanish market. We have used the event study methodology for this purpose. Our findings show that qualified audit reports do not have information value for investors.
Effects of the degree of financial constraint and excessive indebtedness on firms’ investment decisions
2021
Abstract The aim of this paper is to provide empirical evidence of the importance of financial variables in explaining differences in investment rates among firms. The main contributions of the study are twofold: the use of a variable that approximates the degree of financial constraint, and the effect of indebtedness on investment is allowed to be non-linear. The empirical application to the case of Spain is of interest because of the large proportion of SMEs among Spanish firms (SMEs being highly dependent on bank financing) and the drastic tightening of credit conditions in Spain during the banking crisis. The results provide evidence of the impact of financial constraints on firms’ inve…
Operating and stock market performance of state-owned enterprise privatizations: The Spanish experience
2007
Abstract We investigate the operating and stock market performance of Spanish state-owned enterprises (SOEs) privatized through public share issue offerings (SIPs) from 1990 to 2001, when the last SIP was conducted. We compare the performance of SOEs and privately-owned firms. We find significant operating improvements in Spanish SOEs after the privatization. Specifically, they show significant increases in income efficiency, real sales and employment. Spanish governments tried to minimize the foregone proceeds when selling SOE shares and underpriced them lower than private firms. We relate these results with the pressure of the Maastricht Treaty fiscal criteria, as well as lower informatio…
Operating lease decision and the impact of capitalization in a bank-oriented country
2016
ABSTRACTThis article explores the reasons why firms engage in operating leases and examines the potential impact of a change in the related accounting rules. We focus on the accounting advantage of off-balance financing, which does not affect the typical accounting-based covenants especially important in bank-oriented countries. However, we also consider other economically based arguments. Using manually collected operating lease data for Spanish listed firms, we use the constructive capitalization method to measure as-if liabilities. The results confirm that not only size and industry affect the decision but that firms closer to breaching their covenants are also more inclined to choose op…
Evaluation of investment subsidies: when is deadweight zero?
2008
In the evaluation of investment subsidies one of the critical issues concerns the assessment of deadweight, that is, the degree to which projects would have been carried out without grant assistance. With the increasing restrictions on and cuts in subsidies for investment projects in the EU countries maximisation of the impact of the public resources that remain can be achieved through their allocation for projects with minimum deadweight. This paper studies the profile of subsidised zero deadweight investment projects – projects that would be abandoned without public subsidies – in Finland. The empirical analysis is conducted using micro level data on investment projects by private sector …
The role of environmental factors in water utilities' technical efficiency. Empirical evidence from Spanish companies.
2009
This article computes input-specific scores of technical efficiency for a sample of water utilities located in the southern Spanish region of Andalusia. In addition, differences in efficiency between different operating environments are investigated. Concerning the debate about ownership and efficiency, we find that privately owned companies outperform public utilities in their management of labour. Furthermore, technical efficiency is found to be greater among firms located in highly populated areas and for utilities providing water services to tourist municipalities. Finally, no empirical evidence supporting the greater technical efficiency of consortia of water utilities, a managerial st…
The impact of systemic and illiquidity risk on financing with risky collateral
2015
Abstract Repurchase agreements (repos) are one of the most important sources of funding liquidity for many financial investors and intermediaries. In a repo, some assets are given by a borrower as collateral in exchange of funding. The capital given to the borrower is the market value of the collateral, reduced by an amount termed as haircut (or margin). The haircut protects the capital lender from loss of value of the collateral contingent on the borrower׳s default. For this reason, the haircut is typically calculated with a simple Value at Risk estimation of the collateral for the purpose of preventing the risk associated to volatility. However, other risk factors should be included in th…
Venture Capitalists’ Appraisal of Investment Projects: An Empirical European Study
1997
The Investment appraisal and valuation process of venture capitalists includes Information gathering, the assessment of risk and required return, and the choice of a valuation method. This process is empirically studied in the United Kingdom, the Netherlands, Belgium, and France. The Importance of different information sources is equal in the four countries, except that the French venture capitalists Place more emphasis on personal references and the track record of the entrepreneur. The required return is lowest in the Netherlands and Belgium for every development stage of a company, and highest in the UK. The most widely used valuation method in the UK is the multiplication of past or fu…
Staged Venture Capital Contracting with Ratchets and Liquidation Rights
2011
Abstract This paper uses real options analysis to study later round financing in the presence of two standard venture capital contracting provisions: anti-dilution (ratchet) and liquidation preference. We argue that such provisions can preclude financing of a positive NPV venture in the case of a large follow-on financing relative to firm value. Liquidation preference contracting at multiples greater than one is not feasible in the later round if the financing is small relative to firm value. We highlight an interaction effect between the two provisions: increasing the liquidation multiple can help to avoid dilution and the need for the prior venture capitalist to waive ratchet provisions.
Do acquirers’ stock prices fully react to the acquisition announcement of listed versus unlisted target firms? Out-of-sample evidence from Spain
2014
Previous results are ambiguous about whether prices fully reflect value creation or destruction at the time of the acquisition announcement when samples are split into listed and unlisted target firms. We find that the Spanish market fully reacts to the acquisition announcement (showing value creation only for unlisted target firm acquisitions), except for the smallest bidders of public targets since we find significant positive abnormal returns for a 24-month post-acquisition window. This evidence is consistent with investors extrapolating the performance of large acquirers of public firm to smaller ones and, therefore, only identifying value creation in the long term.