Firms? sustainability, financial performance, and regulatory dynamics: Evidence from European firms

This study examines the association between firms' ESG reputational risk and financial per-formance under the EU regulatory policy changes and the COVID-19 period. Analyzing a panel of 1,816 European listed firms during the period 2007-2021, we document evidence that firms with lower ESG reputational risk have reduced information asymmetry, are less financial constrained and perform better. To establish causality, we design a quasi-natural experiment focusing on the 2014/95/EU directive of non-financial disclosing and the COVID-19 exogenous shock. Our findings are robust to several estimation techniques that address endogeneity, self-selection, and model sensitivity. Crown Copyright (c) 2022 Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Precautionary versus Signalling Motive of Share Repurchases: Evidence from Policy Uncertainty and the COVID‐19 Crisis

Using policy-related uncertainty as a shock to firms' internal and external financing frictions, we find significantly lower repurchase likelihoods, short-term market reactions, and post-announcement completion rates of open market share repurchases during periods of high policy uncertainty. Firms are more likely to switch from a high- to a low-commitment repurchase technique when policy uncertainty is high. In contrast, for firms that are significantly undervalued ex ante, higher policy uncertainty leads to more repurchase activities. In addition, we show that the COVID-19 crisis is associated with a lower repurchase likelihood for financially constrained firms or those with high cash flow volatility, while undervalued firms repurchased more shares during the pandemic period. Our results are robust after controlling for potential sources of endogeneity and conducting a battery of robustness tests. Collectively, our evidence suggests that the relationship between uncertainty and share repurchases is conditional on institutional contexts. Firms' level of financial flexibility, their demand for signalling, and the credibility and magnitude of repurchase signals all significantly affect their precautionary and signalling motives.

Corporate payout, cash holdings, and the COVID-19 crisis: Evidence from the G-7 countries.

This paper examines the impact of the COVID-19 pandemic on the adjustments of dividends and share repurchases of publicly listed firms in the G-7 countries. Firms in the United Kingdom, Germany, France, and Italy experienced a widespread cut in dividends, while firms in the United States and Canada cut cash payout more via share repurchases, with Japanese firms in between. Corporate cash holdings helped mitigate the negative impact of COVID on payout adjustments, but the impact was less significant for European firms.

ESG, operational efficiency and operational performance: evidence from Real Estate Investment Trusts

Purpose>The purpose of the paper is to examine the relationship between the Environmental, Social and Governance (ESG) performance of Real Estate Investment Trusts (REITs) and their operational efficiency and performance.Design/methodology/approach>The authors use S&P Global (formerly SNL Real Estate) for the study analyses and examine all publicly traded REITs based in the United States over the 2019–2020 sample period. The authors regress the measures of REIT operational efficiency and operational performance on REIT ESG scores while controlling for REIT characteristics and use an ordinary least squares (OLS) estimation model with heteroscedasticity-robust standard errors. The authors also run additional regressions to examine the implications of operational efficiency on the relationship between ESG and operational performance.Findings>The authors find that REITs that perform well on the ESG scale have higher operational efficiency. In addition, the authors find that REITs with better ESG scores are associated with better operational performance. Finally, the authors find that the positive association between ESG scores and operational performance is stronger in REITs with higher operational efficiency.Practical implications>First, the adoption of ESG adds value to the REIT in terms of increased operational performance and efficiency. Second, the value addition of ESG to an REIT is driven by the better operational efficiency of some REITs over the others. Therefore, the authors’ findings suggest that REITs that currently score poorly on ESG performance would first need to focus on all the possible avenues to improve economies of scale and hence operational efficiency. This approach would help ensure that when those REITs adopt ESG initiatives, they get the most bang for their buck.Originality/value>To the best of the authors’ knowledge, this is the first study that relates operational efficiency and operational performance of REITs to their ESG scores.

The Impact of Organizational Characteristics on Corporate Cash Holdings: Evidence from Saudi Arabia During COVID-19 Period

The article investigates the level and financial determinants of corporate cash holdings in the kingdom of Saudi Arabia during the COVID-19 period, at the beginning we reviewed the academic accounting literature to develop the theoretical framework of corporate cash holdings in terms of definition, motivations, and theories, then to conduct our empirical study we use a sample consisted of the largest 50 corporations listed in the Saudi stock market, going further, the corporate cash holdings mean was 14.96% during the study period, the article's results prove empirically a positive relation between corporate cash holdings, leverage, and ownership concentration among the sample corporations. and a negative relationship between corporate cash holdings, corporate size, cash flow, growth opportunities, working capital, and dividends, finally, the article results will add to the academic accounting literature and help researchers and corporations' management to understand the financial determinants, motivates, theories and the optimal amount of corporate cash holdings based on scientific evidence. © 2022 NSP Natural Sciences Publishing Cor.

News from HAL

[...]based on the improved financial performance and cash flow position, the Credit Rating Agencies CARE Ratings and ICRA Limited have upgraded the Company's credit rating from AA+ Stable to AAA/Stable during the financial year. HAL and BEL sign contract for indigenous IRST HAL and BEL signed a contract for co-development and coproduction of Long Range Dual Band Infra-Red Search and Track System (IRST) for Su-30 MKI on 26 April 2022 under the MAKEII procedure of Defence Acquisition Procedure (DAP) 2020, as part of the 'Make in India' initiative. The proposed IRST system will be a high end strategic technology product in the field of defence avionics and technically competitive to existing IRST system in the global market with features of Television Day Camera, Infrared and Laser sensors in single window for air to air and air to ground target tracking and localisation.

Dividend sentiment, catering incentives, and return predictability

Using Internet search volume of dividend-related keywords to measure investor preference for dividends that varies over time and across states, we show that dividend sentiment affects corporate policies and asset prices. Investors search more for dividends when economic conditions are poor, with the peak volume reached during the recent COVID-19 pandemic. Firms initiate or increase dividends when dividend sentiment is stronger, especially in regions with strong dividend sentiment. Shifts in dividend sentiment predict higher investor demand for dividends and higher returns for high dividend stocks. Further, mutual funds that pay high dividends receive more inflows when dividend sentiment is stronger.

Corporate dividend policy in the time of COVID-19: Evidence from the G-12 countries.

This paper examines how the COVID-19 pandemic affects corporate dividend policy. Utilizing a sample of 8889 firms listed in the G-12 countries, the findings show that although the proportion of dividend cuts and omissions is significantly higher during the pandemic, yet the majority of firms could either maintain or increase dividends. By doing so, firms might aim to purse more stable dividend policies and signal their financial prospects during the crisis, as posited by dividend signaling theory. Logit regression findings reveal that firm profitability, earnings prospects, size and leverage appear to be important determinants of dividend policy decisions during the pandemic.

The impact of the COVID-19 pandemic on dividends.

This paper examines the impact of the COVID-19 pandemic on the dividend payouts of publicly traded firms in the U.S. Out of nearly 1,400 dividend paying firms, 213 cut dividends and 93 omitted dividends entirely in the second quarter of 2020. This proportion of cuts and omissions is three to five times higher than any other quarter since 2015. The 2008 financial crisis was characterized by a high proportion of financial firms cutting dividends without much change in dividends for non-financials. Conversely, we find evidence of increased dividend cuts across all industries. The most common industry grouping, industrials, experienced one out of every six firms cutting dividends. Regression results indicate that net income and debt are determinants of firms cutting dividends in all periods, but the economic significance is much greater during the pandemic.