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Fundamental Value (fundamental + value)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	73%
Law and Criminology	15%
Humanities and Social Sciences	10%

Selected Abstracts

Common Risk Factors Versus a Mispricing Factor of Tokyo Stock Exchange Firms: Inquiries into the Fundamental Value Derived from Analyst Earnings Forecasts,

INTERNATIONAL REVIEW OF FINANCE, Issue 3 2009
KEIICHI KUBOTA
ABSTRACT We search for common factors and/or a mispricing factor for Tokyo Stock Exchange firms. We utilize the Edwards,Bell,Ohlson model to compute the firms' fundamental value and divide this value by the firms' market price to construct a new variable called a ,value-to-price ratio' (VPR). We find that this VPR variable can generate abnormal returns even after adjusting for the risk factors related to portfolio style differences. To find out whether it is indeed a risk factor or simply a characteristic, we construct return difference portfolios of the high VPR stocks minus the low value-to-price stocks and call this portfolio the upward-forecast minus downward-forecast (UMD) factor. Fama and MacBeth test indicate that the risk premium for this UMD factor is positive. The best model in terms of the adjusted R2 value is the four-factor model in which the UMD factor is added to the Fama and French three factors. GMM Euler condition tests reveal that the UMD factor helps to price assets and that the four-factor model is not rejected. We conclude the VPR variable contains new information content that is not contained in the conventional Fama and French's three factors. [source]

The Two Faces of Analyst Coverage

FINANCIAL MANAGEMENT, Issue 2 2005
John A. Doukas
We find that positive excess (strong) analyst coverage is associated with overvaluation and low future returns. This finding is consistent with the view that excessive analyst coverage, driven by investment banking incentives and analyst self-interests, raises investor optimism causing share prices to trade above fundamental value. However, weak analyst coverage causes stocks to trade below fundamental values. This finding indicates that investors tend to believe that these firms are more likely to be plagued by information asymmetries and agency problems. The results remain robust after controlling for the possible endogenous nature of analyst coverage and analysts' self-selection bias. [source]

Circuit Breakers with Uncertainty about the Presence of Informed Agents: I Know What You Know , I Think

FINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2005
by Lucy F. Ackert
This study conducts experimental asset markets to examine the effects of circuit breaker rules on market behavior when agents are uncertain about the presence of private information. Our results unequivocally indicate that circuit breakers fail to temper unwarranted price movements in periods without private information. Agents appear to mistakenly infer that others possess private information, causing price to move away from fundamental value. Allocative efficiencies in our markets are high across all regimes. Circuit breakers perform no useful function in our experimental asset markets. [source]

Earnings characteristics and analysts' differential interpretation of earnings announcements: An empirical analysis

ACCOUNTING & FINANCE, Issue 2 2009
Anwer S. Ahmed
G14; M41 Abstract This study provides empirical evidence on factors that drive differential interpretation of earnings announcements. We document that Kandel and Pearson's forecast measures of differential interpretation are decreasing in proxies for earnings quality and pre-announcement information quality. This evidence yields new and useful insights regarding which earnings announcements are less likely to generate newfound disagreement among analysts and investors. Recent research suggests that investor disagreement can increase investment risk, increase the cost of capital, and cause stock prices to deviate from fundamental value. Therefore, our results support prior intuition that increasing the quality of earnings and pre-announcement information can improve the efficiency of capital markets. [source]

Common Risk Factors Versus a Mispricing Factor of Tokyo Stock Exchange Firms: Inquiries into the Fundamental Value Derived from Analyst Earnings Forecasts,

Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency

JOURNAL OF ACCOUNTING RESEARCH, Issue 4 2008
PINGYANG GAO
ABSTRACT This paper examines the market efficiency consequences of accounting disclosure in the context of stock markets as a Keynesian beauty contest, an influential metaphor originally proposed by Keynes [1936] and recently formalized by Allen, Morris, and Shin [2006]. In such markets, public information plays an additional commonality role, biasing stock prices away from the consensus fundamental value toward public information. Despite this bias, I demonstrate that provisions of public information always drive stock prices closer to the fundamental value. Hence, as a main source of public information, accounting disclosure enhances market efficiency, and transparency should not be compromised on grounds of the Keynesian-beauty-contest effect. [source]

Feedback Effects and Asset Prices

THE JOURNAL OF FINANCE, Issue 4 2008
EMRE OZDENOREN
ABSTRACT Feedback effects from asset prices to firm cash flows have been empirically documented. This finding raises a question for asset pricing: How are asset prices determined if price affects fundamental value, which in turn affects price? In this environment, by buying assets that others are buying, investors ensure high future cash flows for the firm and subsequent high returns for themselves. Hence, investors have an incentive to coordinate, which may generate self-fulfilling beliefs and multiple equilibria. Using insights from global games, we pin down investors' beliefs, analyze equilibrium prices, and show that strong feedback leads to higher excess volatility. [source]

Patent Policy for Human Embryonic Stem Cell Research in Taiwan

THE JOURNAL OF WORLD INTELLECTUAL PROPERTY, Issue 4 2010
Jerry I.-H.
The potential of human embryonic stem cell (ESC) research could prove to provide immense therapeutic value for illnesses not curable under currently existing therapies. However, human ESC research is controversial as it touches the fundamental value of human life. Taiwan has been aiming to become the biotech hub of Asia-Pacific and is becoming a major player in human ESC research. Whether or not the research results from human ESC are patentable could have a profound impact on the progress in this field. In this article, the science of human ESC research is clarified and tested against the existing murky Taiwan patent standards. In particular, this article distinguishes between therapeutic cloning and reproductive cloning techniques, asks questions about the patentability of totipotent human ESCs and explores the meaning of the word embryo. This article draws comparison with the European practice on ethical standards and concludes that patenting human ESC research might not be so controversial, but Taiwan has to make its patent law clearer in this field to fulfill the country's intended goal. [source]

An Embryonic Nation: Life Against Health in Canadian Biotechnological Discourse

COMMUNICATION THEORY, Issue 1 2005
Rebecca Sullivan
This article traces the protracted public debate over reproductive and genetic technologies in Canada through an examination of the federal government's efforts to pass legislation in the area. Four attempts were made, in 1997, 2000, 2003, and finally 2004, before a bill was passed that regulated the use of embryos in both infertility treatments and nonreproductive genetic therapies. At stake in the debate was the supremacy of health over life as a fundamental value of Canadian national identity, and the role of biotechnology in ushering Canada into a new era of prosperity and global leadership. Using a feminist cultural framework, the author challenges notions of modernity versus postmodernity in the social construction of bodies, nations, and knowledge. She critiques the legal intrusions on women's bodies in particular for the way that they, perhaps inadvertently, offer some limited form of autonomy for embryos as valuable commodities in scientific progress. [source]

State Collapse and its Implications for Peace,Building and Reconstruction

DEVELOPMENT AND CHANGE, Issue 5 2002
Alexandros Yannis
At the beginning of the twenty,first century, terms such as state collapse and failed states are becoming familiar, regularly used in international politics to describe a new and frightening challenge to international security. The dramatic events of September 11 have pushed the issue of collapsed states further into the limelight. This article has two aims. Firstly, it explains the contextual factors that gave rise to the phenomenon of state collapse. In the early post,Cold War period, state collapse was usually viewed as a regional phenomenon, and concerns were mainly limited to humanitarian consequences for the local population and destabilizing effects on neighbouring countries. Now, state collapse is seen in a more global context, and concerns are directed at the emergence of groups of non,state actors who are hostile to the fundamental values and interests of the international society such as peace, stability, rule of law, freedom and democracy. Secondly, the article offers some observations about the normative implications of the phenomenon of state collapse for peace,building and reconstruction. [source]

The Two Faces of Analyst Coverage

Central bank interventions in industrialized countries: a characterization based on survey results

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 2 2006
Christelle Lecourt
Abstract This paper presents the findings from a survey on central banks' FOREX intervention practices in industrialized countries over the last decade. The answers of responding monetary authorities are examined with respect to available data and literature. Our findings indicate that interventions usually take place during normal working hours while central banks show some preference for dealing with major domestic banks. Correction or prevention of long-term misalignments of exchange rates with their fundamental values and, to a lesser extent, the reduction of exchange rate volatility is the first motive given for intervention. The signalling effect of interventions is consistently put forward as the main channel through which interventions work. Copyright © 2006 John Wiley & Sons, Ltd. [source]

Values and Purpose in Government: Central-local Relations in Regulatory Perspective

JOURNAL OF LAW AND SOCIETY, Issue 1 2002
Peter Vincent-Jones
This paper explores the relationship between theories of regulation and governmentality, showing how a synthesis of the two approaches may be used in the analysis of central-local relations. The basis of the current trend towards greater partnership and cooperation in the regulation of local by central government is argued to lie in the linking of increasingly selective imperium and dominium controls with ,responsibilization' strategies involving techniques of accounting, audit, and contracting. Following Nonet and Selznick, the substantive and purposive nature of state action is placed at the centre of the analysis. In this perspective, the ideal of responsive regulation implies not just technical effectiveness, but the harnessing of regulatory forces and ,governmental' resources in endeavours to achieve legitimate regulatory objectives. While New Labour's regulatory style is more likely to prove effective than that of the Conservatives, it may be criticized for a similar failure to implement fundamental values of openness and participation in the determination of regulatory purposes. [source]

The role of civil society in European integration

JOURNAL OF PUBLIC AFFAIRS, Issue 1 2001
Beatrice Rangoni Machiavelli
Abstract This paper explores the concept of ,civic society' in Western political thought, charting the changing understanding of this concept through history and its manifestation in contemporary political and social life. The paper draws out the inferences for our understanding of the role of government, particularly with the European Union and its relationship with citizens and other representative community-based and non-governmental organisations. The paper argues that the fundamental values that are central to civic society underpin the proposed EU Charter on Fundamental Rights and maintains that effective European integration requires responsible participation by Europe's citizens. Copyright © 2001 Henry Stewart Publications [source]

Parliamentary sovereignty and the new constitutional order: legislative freedom, political reality and convention

LEGAL STUDIES, Issue 3 2002
Mark Elliott
Although the constitutional reform programme undertaken by the Blair administration is formally consistent with the doctrine of parliamentary sovereignty, it is clear that the human rights and devolution legislation, in particular, significantly alter the political and constitutional environment within which Parliament's legislative powers are exercised. This paper considers whether it is meaningfiul, within this new constitutional setting, to adhere to the traditional notion of sovereignty. It is argued that the disparity between a Parliament whose powers are formally unlimited yet increasingly constrained, in political terms, by norms based on fundamental rights and devolved governance may be accommodated, in the short term, by means of constitutional conventions which trace the constitutionally acceptable limits of legislative action by Parliament. However, following examination of the nature of convention and its relationship with law and constitutional principle, it is argued that the possibility arises, in the long term, that conventional limits upon legislative freedom may ultimately evolve into legal limiis, thus ensuring that the fundamental values embraced by the legal order are acknowledged not merely in pragmatic or conventional terms, but as a matter of constitutional law. [source]

The Emerging Federal Quasi Government: Issues of Management and Accountability

PUBLIC ADMINISTRATION REVIEW, Issue 3 2001
Ronald C. Moe
There has been a growing trend in the federal government toward reliance on organizations that commingle legal attributes of the government and private sectors. These hybrid organizations now constitute a quasi government that occasions both interest and concern by political leaders, practitioners, and scholars alike because these organizations touch the very heart of democratic governance: To whom are these hybrids accountable? How well is the public interest being protected against the interests of private parties? In this article, the author seeks to define the quasi government and place these hybrid entities into manageable categories from which legal and behavioral generalizations may be drawn. Are hybrid organizations a problem or a solution? Looking critically at this question, the author suggests the answer may depend in large measure on which of two management paradigms the reader accepts: the constitutionalist management paradigm or the entrepreneurial management paradigm, both of which are defined and discussed. The author concludes that the increasin reliance on hybrid organizations constitutes a threat not only to accountable management within the government, but to the fundamental values of democratic governance as well. [source]

Short Sellers and Financial Misconduct

THE JOURNAL OF FINANCE, Issue 5 2010
JONATHAN M. KARPOFF
ABSTRACT We examine whether short sellers detect firms that misrepresent their financial statements, and whether their trading conveys external costs or benefits to other investors. Abnormal short interest increases steadily in the 19 months before the misrepresentation is publicly revealed, particularly when the misconduct is severe. Short selling is associated with a faster time-to-discovery, and it dampens the share price inflation that occurs when firms misstate their earnings. These results indicate that short sellers anticipate the eventual discovery and severity of financial misconduct. They also convey external benefits, helping to uncover misconduct and keeping prices closer to fundamental values. [source]

Limited Arbitrage in Equity Markets

THE JOURNAL OF FINANCE, Issue 2 2002
Mark Mitchell
We examine 82 situations where the market value of a company is less than its subsidiary. These situations imply arbitrage opportunities, providing an ideal setting to study the risks and market frictions that prevent arbitrageurs from immediately forcing prices to fundamental values. For 30 percent of the sample, the link between the parent and its subsidiary is severed before the relative value discrepancy is corrected. Furthermore, returns to a specialized arbitrageur would be 50 percent larger if the path to convergence was smooth rather than as observed. Uncertainty about the distribution of returns and characteristics of the risks limits arbitrage. [source]