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BA-FI6: Corporate Financial Management and Communication
14:15 - 15:45
Chair der Sitzung: Marliese Uhrig-Homburg, KIT
Ort:Virtueller Raum 5
Share repurchases, undervaluation, and corporate social responsibility
Nils-Christian Bobenhausen, Astrid Salzmann, Andreas Knetsch
RWTH Aachen University, Deutschland
Diskutant: Iulia Udoieva (Universität Marburg)
Share repurchases experienced growing popularity in recent years. However, a repurchase of an undervalued firm goes along with wealth distribution from selling to ongoing shareholders. The interest of this paper lies in the potentially opportunistic exploitation of selling sharehold-ers through buybacks in times of undervaluation. Our results show that undervalued firms with superior CSR performance are less likely to repurchase shares and thus exploit their un-dervaluation to the disadvantage of selling shareholders. In addition, those firms will rather opt for a dividend increase than for a share repurchase to distribute excess cash. Furthermore, managers of undervalued firms with high CSR scores engage in fewer insider trades. These results are consistent with managers being aware of exploiting selling shareholders. Firms with high CSR performance behave less opportunistic.
Improving bargaining power or putting safety first? Ownership structure and the effect of labor market regulation on leverage
Marina Kononova, Marc Steffen Rapp, Iuliia Udoieva
Using staggered EPL changes across the OECD, we analyze the differential effect of shifts in labor power on financial leverage in firms with different ownership structures. We find that high ownership concentration mitigates the positive effect of labor protection on debt. This result does not seem to be due to pretreatment trends and is robust after accounting for endogeneity. The ownership-related differential EPL effect is most evident for firms with strategic blockholders and labor-intensive industries. Our results help to reconcile two competing theoretical predictions, while highlighting the importance of considering the contracting relationships between various firm stakeholders.
Andreas Barth, Sasan Mansouri, Fabian Woebbeking
Goethe University Frankfurt, Germany
Diskutant: Astrid Salzmann (RWTH Aachen)
It is relatively easy for humans to detect that the question they asked has not been answered -- we teach this skill to a computer. More specifically, we develop a measure that detects the avoidance, dodging or rejection of answering in a Q&A setup. Using a supervised machine learning framework, on a large training set of 48,197 classified answers, we identify 703 trigrams that signal that the respondent tries to avoid to answer the question he was asked. We show that this dictionary has economic relevance by applying it to a validation set of contemporaneous stock market reaction after earnings conference calls. Our finding shows that obstructing the flow of information leads to significantly lower cumulative abnormal stock returns. This result holds in the cross-section of earnings calls as well as in the within-management team variation. Our metric is designed to be of general applicability for Q&A situations, and hence, can be applied outside the contextual domain of earnings conference calls.