The financial conglomerate discount: Insights from stock return skewness

Bressan, Silvia; Weissensteiner, Alex

doi:10.1016/j.irfa.2021.101662

Cited by 9 publications

(5 citation statements)

References 58 publications

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“…The B Impact Assessment serves as a roadmap to assess and create improvement pathways to increase the positive impact of companies that have this sense of ownership. As the results of this research show in Table 1, the combination of third-party validation, public transparency and legal accountability which helps certified B companies to generate trust and value [79][80][81]. Table 1 also shows the industry, the number of responsible tourism ventures in each B-certified country, number of companies with presence in other Latin American countries, services, products, impact and impact areas.…”

Section: Resultsmentioning

confidence: 89%

“…Certified B Corporations earn a minimum verified score on the B Impact Assessment, a rigorous evaluation of a company's impact on its workers, customers, community and environment, and make their B Impact Report transparent on bcorpora-tion.net. Certified B corporations also amend their legal governing documents to require their board of directors to balance profit and purpose (see Figure 2) [76][77][78][79][80][81]. To obtain certification, companies must go through a rigorous evaluation process, in which they measure the impact they generate in four areas: Governance, Workers, Environment, Community, in addition to measuring the impact they generate through their business model.…”

Section: Why Companies Are Certified?mentioning

confidence: 99%

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The Role of B Companies in Tourism towards Recovery from the Crisis COVID-19 Inculcating Social Values and Responsible Entrepreneurship in Latin America

et al. 2021

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One of the particularities of companies with a social purpose is that, through their business model of B companies, they have incorporated into their processes the necessary mechanisms to obtain, simultaneously, the profits to ensure the existence of the organization in the market. At the same time, social value is generated, which is necessary to address the problems of the social crisis caused by COVID-19 and the environmental problems affecting the community. The current global health and economic crisis has opened up the possibility of adopting business model B and focusing more on the individual. Based on the grounded theory method, we have examined 3500 B Corporations in Latin America, of which 57 were examined in 10 countries listed in the Directory of B Corporations for Latin America. The main conclusions are that B Corporations dedicated to tourism through responsible entrepreneurship develop a more inclusive, sustainable and environmentally friendly economy for the benefit of society, go beyond the notion of CSR and move away from traditional business, as B Corporations combine social development and economic growth.

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Section: Resultsmentioning

confidence: 89%

Section: Why Companies Are Certified?mentioning

confidence: 99%

The Role of B Companies in Tourism towards Recovery from the Crisis COVID-19 Inculcating Social Values and Responsible Entrepreneurship in Latin America

et al. 2021

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“…To this end, they relate business success not only to sales, but also to the administration of economic resources through treasury management. According to the scientific literature consulted such as Akyildirim et al [3], Bressan and Weissensteiner [4] agree that cash management refers to the proper administration of liquidity to maintain an economic balance, with special reference to the placement of surpluses, as well as the planning and forecasting of future financing needs in key aspects of business management. It is common for financial decisions that influence the working capital of the company to be analysed separately from investment decisions [5].…”

Section: Introductionmentioning

confidence: 99%

Investment Decisions According to the Miller and Markowitz Models. A Look at Smart Cash Management

González-Díaz

Becerra-Pérez

Guanilo

et al. 2021

Smart Innovation, Systems and Technologies

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Investment decisions in corporate finance are decisive for improving the cyclical fluctuation of any form of business, minimising opportunity costs and maximising returns on idle funds. Empirical evidence has shown that the agricultural sector has only two financial periods in the year: surplus and deficit. If good decisions are not made in some of these periods, serious financial problems could arise. Therefore, this study presents an analysis of the cash management of microenterprises in the livestock sector in the Colombian Caribbean region, based on the cash flow management models proposed by Miller and Orr, who consider the volatility of cash balances and the trends of projects at the upper and lower limits of optimal cash balances. This indicates to financial management when to purchase a type of financial instrument. In stable economic conditions, the cases of acquiring financial assets, the optimal investment portfolio is determined in relation to the profitability and risk of the 3 stocks with the largest share in the COLCAP index: ECOPETROL, PFBCOLOM and GRUPOSURA, based on the Markowitz model.

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“…We contribute by adding new evidence that coskewness is also important to explaining bank equity pricing. Bressan and Weissensteiner (2021) studied the effects of business diversification on bank valuation and showed that the value of financial conglomerates as measured by Tobin's q depends significantly on the (co)skewness in their stock returns. The ultimate interpretation is that (co)skewness can be used to approximate the expected equity returns used in corporate valuation.…”

mentioning

confidence: 99%

“… 8 8 This approach of computing measures for expected (co)skewness followed, for example, Boyer et al (2010), Mitton and Vorkink (2010), and Bressan and Weissensteiner (2021). However, we also conducted regressions that included

\overset{γ}{true} {(italiccs)}_{j, t - 1}

instead of

E_{t - 1} {[\overset{truê}{γ} {()(, cs)}_{j, t}]}^{*}

, and the results remained qualitatively similar.…”

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confidence: 99%

On the time‐varying relationship between coskewness and returns of banks

Bressan

Weissensteiner

2023

Rev Financ Econ

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For a sample of US commercial banks, we find that during the Global Financial Crisis of 2007–2009 and the COVID‐19 pandemic of February–December 2020, bank returns were positively related to their coskewness with the market return, while the relationship was negative during stable periods. The literature on non‐financial firms and global equity indices has shown that the relationship between coskewness and stock returns is time‐variant. The findings of this study extend that evidence to banks. The interpretation is that in normal times, investors show a preference for “lotteryness,” and therefore they are willing to pay a premium for bank stocks with a high coskewness (i.e., low expected return). In contrast, during crises, stocks with a high coskewness are more likely to suffer deep losses, and investors are reluctant to demand these risky high returns. These findings deliver important insights into how to interpret bank capital costs throughout the business cycle, as we suggest that during crises the issuance of equity capital becomes more costly for banks because investors demand higher coskewness risk premiums.

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The financial conglomerate discount: Insights from stock return skewness

Cited by 9 publications

References 58 publications

The Role of B Companies in Tourism towards Recovery from the Crisis COVID-19 Inculcating Social Values and Responsible Entrepreneurship in Latin America

The Role of B Companies in Tourism towards Recovery from the Crisis COVID-19 Inculcating Social Values and Responsible Entrepreneurship in Latin America

Investment Decisions According to the Miller and Markowitz Models. A Look at Smart Cash Management

On the time‐varying relationship between coskewness and returns of banks

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