BETA, FIRM SIZE, and CONCENTRATION

Binder, John J.

doi:10.1111/j.1465-7295.1992.tb01981.x

Cited by 14 publications

(7 citation statements)

References 33 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Consistent with Banz (1981) and Binder (1992), we find firm size inversely relates to volatility for both specific and systematic risk.…”

Section: Multivariate Analysissupporting

confidence: 70%

“…However, empirical investigations into the relation between leverage and volatility provide mixed results (Christie, 1982;Wei and Zhang, 2006;Brandt et al, 2010;Bartram et al, 2015). The natural logarithm of the firm's total assets is included to control for the size of the firm, as larger firms have less systematic and firm specific risk (Binder, 1992;Cheng and Ng, 1992;Wong, 1995). We include Tobin's Q as a control for unrecorded intangible assets other than intellectual capital.…”

Section: Statistical Modelmentioning

confidence: 99%

See 1 more Smart Citation

Does Intellectual Capital Affect the Volatility of Returns? An Empirical Investigation on Italian Listed Companies

Cantrell

Coluccia

Fontana

et al. 2017

American Journal of Applied Sciences

View full text Add to dashboard Cite

Abstract:In modern information economies, economic success increasingly depends on the ability to apply knowledge and to transform it into firm value. While intellectual capital plays a critical role in firm success, it is an intangible asset that is difficult to measure and that is unrecorded by the firm. Difficulties in measuring intellectual capital, as well as the dynamic nature of the firms that rely on it, may lead to greater stock market volatility/risk. Consistent with this expectation, in statistical tests we find that intellectual capital, measured by VAIC, positively relates to the volatility of stock returns section among Italian listed companies. We find this positive relation for two components of a firm's risk: systematic risk and specific risk. The finding is relevant to both investors concerned with understanding the risk/reward balance of particular investments and regulators concerned with market stability.

show abstract

“…Consistent with Banz (1981) and Binder (1992), we find firm size inversely relates to volatility for both specific and systematic risk.…”

Section: Multivariate Analysissupporting

confidence: 70%

Section: Statistical Modelmentioning

confidence: 99%

Does Intellectual Capital Affect the Volatility of Returns? An Empirical Investigation on Italian Listed Companies

Cantrell

Coluccia

Fontana

et al. 2017

American Journal of Applied Sciences

View full text Add to dashboard Cite

show abstract

“…Lev correctly predicts higher betas for more capital-intensive firms (i.e., those with higher operating leverage or ratio of fixed to variable costs); Subrahmanyam and Thomadakis argue the opposite. Binder (1992) reviews the literature relating systematic risk to concentration and size. He shows that negative coefficients on CR and firm size (a common finding) are consistent with a simple competitive model, as well as with the usual market power arguments.…”

Section: Shareholder Risk Resultsmentioning

confidence: 99%

Shareholder Risk and Returns in Union and Nonunion Firms

Hirsch¹,

Morgan²

1994

Industrial and Labor Relations Review

View full text Add to dashboard Cite

This study examines shareholder risk and rates of return in union and nonunion companies in 1973-87.Shareholder risk declined with the extent of union coverage in the 1970s, and returns were lower among highly unionized companies than among other companies during the late 1970s and early 1980s. Unionnonunion differences in risk were small and insignificant by the mid-1980s, however, and there was no systematic relationship between union coverage and shareholder returns in the mid-1970s or mid-1980s. Recent research has focused considerable attention on union-nonunion differences in profitability, market value, and other dimensions of firm performance or behavior. Becker and Olson (1989) provided a unique analysis of differences in shareholder risk and returns in union and nonunion companies. They found that during most of the 1970s, shareholder risk was systematically lower in union than in nonunion companies, and shareholders in more highly unionized companies realized lower rates of return than did owners of nonunion companies. Becker and Olson argued that lower shareholder risk in highly unionized companies is the result of risk shifting from owners to labor, and they suggested that lower investor returns during the 1970s led to increased pressure on management to limit the extent of union representation in the 1980s.This paper provides new evidence on union-nonunion differences in shareholder risk and returns using a sample of companies and a measure of firm unionization different from those used by Becker and Below, we briefly review the Becker and Olson study. We then present evidence on the relationship of firm union coverage with shareholder risk and rates of return for some 400 publicly traded manufacturing sector companies during the 1973-87 period.

show abstract

“…Total assets ( lnTA). This variable is included because previous literature provides evidence that firm size affects Beta (Binder, 1992). For example, Olibie and Rezaee (2007) shows that Beta is negatively related to total assets.…”

Section: Control Variablesmentioning

confidence: 99%

The operating leverage impact on systematic risk within a context of choice

2012

View full text Add to dashboard Cite

Purpose -Strategic cost structure choices determine how firms divide operating costs between fixed and variable components, and therefore have important implications for financial performance. The purpose of this paper is to examine the effect of operating leverage on equity Betas when managers have discretion over firms' cost structures. Design/methodology/approach -Using panel data for publicly listed trucking firms over years 1994-2006, market model Betas are regressed on controls and alternatively measured proxies for operating leverage: degree of operating leverage, assets in place and percentage of company employed drivers. Findings -Results of this study generally show positively significant coefficients on all three operating leverage variables. Originality/value -Operating characteristics of many industries require that firms make substantial investments in long-lived assets that result in high fixed costs (e.g. depreciation), and for these firms cost structure is exogenously or technologically constrained leaving managers with little discretion. In contrast to these types of firms, the authors examine the effect of operating leverage (OL) on Betas when managers have discretion over firms' cost structures. Trucking firms are a particularly interesting industry group for analyzing the impact of operating OL choices on Beta because distinct strategic cost structure choices are available to the management of trucking firms that result in various degrees of OL throughout the industry.

show abstract

BETA, FIRM SIZE, and CONCENTRATION

Cited by 14 publications

References 33 publications

Does Intellectual Capital Affect the Volatility of Returns? An Empirical Investigation on Italian Listed Companies

Does Intellectual Capital Affect the Volatility of Returns? An Empirical Investigation on Italian Listed Companies

Shareholder Risk and Returns in Union and Nonunion Firms

The operating leverage impact on systematic risk within a context of choice

Contact Info

Product

Resources

About