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UK Firms (uk + firm)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	95%

Selected Abstracts

The Seasoned-Equity Issues of UK Firms: Market Reaction and Issuance Method Choice

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2006
Edel Barnes
Abstract: This study examines the seasoned equity issues of companies traded on the London Stock Exchange. Recent regulatory changes have allowed UK firms more discretion in choice of issue approach, and this has led many firms to issue through placing in preference to a rights issue. Having first documented the trend towards increasing use of placings, we go on to identify an interesting subset of placings that are less likely to be anticipated by the market, and find a significant positive market reaction to such placings, which contrasts with the significant negative reaction we find for issues by rights. We also examine the choice of seasoned equity issuance method, focusing on the choice between placings versus rights issues. We develop a model to explain the choice of equity issue method that achieves a high level of predictive accuracy. [source]

How Innovative are UK Firms?

BRITISH JOURNAL OF MANAGEMENT, Issue 1 2010
Evidence from the Fourth UK Community Innovation Survey on Synergies between Technological, Organizational Innovations
Using data from the Fourth UK Community Innovation Survey this paper explores the diffusion of a range of innovative activities (encompassing process, product, machinery, marketing, organization, management and strategic innovations) across 16,383 British companies in 2004. Building upon a simple theoretical model it is shown that the use of each innovation is correlated with the use of all other innovations. It is shown that the range of innovations can be summarized by two multi-innovation factors, labelled here ,organizational' and ,technological', that are complements but not substitutes for each other. Three clusters of firms are identified where intensity of use of the two sets of innovations is below average (56.9% of the sample); intermediate but above average (23.7%); and highly above average (19.4%). Distinctive characteristics are found to be common to the companies in each cluster. Finally, it is shown that innovativeness tends to persist over time. [source]

Shareholder Wealth Effects of European Domestic and Cross-border Takeover Bids

EUROPEAN FINANCIAL MANAGEMENT, Issue 1 2004
Marc Goergen
G32; G34 Abstract This paper analyses the short-term wealth effects of large intra-European takeover bids. We find announcement effects of 9% for the target firms compared to a statistically significant announcement effect of only 0.7% for the bidders. The type of takeover bid has a large impact on the short-term wealth effects with hostile takeovers triggering substantially larger price reactions than friendly operations. When a UK firm is involved, the abnormal returns are higher than those of bids involving both a Continental European target and bidder. There is strong evidence that the means of payment in an offer has an impact on the share price. A high market-to-book ratio of the target leads to a higher bid premium, but triggers a negative price reaction for the bidding firm. We also investigate whether the predominant reason for takeovers is synergies, agency problems or managerial hubris. Our results suggest that synergies are the prime motivation for bids and that targets and bidders share the wealth gains. [source]

Nonaudit Services and Earnings Management: UK Evidence,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 4 2004
MICHAEL J. FERGUSON
Abstract Using a sample of UK firms for the period 1996-98, we provide empirical evidence on the relation between nonaudit services (NAS) purchase and three proxies for earnings management: (1) the likelihood that client firm accounting practices during the sample period were publicly criticized or subject to regulatory investigation; (2) the likelihood that client firms were required to restate prior financial statements or adjust current year results upon adoption of Financial Reporting Standard (FRS) No. 12, which was intended to curb opportunistic use of provisions; and (3) the mean absolute value of client discretionary working capital accruals over the sample period. The level of NAS purchase is measured, alternatively, as (1) the ratio of nonaudit to total auditor fees, (2) the natural log of NAS fees, and (3) the decile rank of a particular client's NAS fees given all NAS fees received by the audit firm practice office. With one exception, we find that all three measures of earnings management are positively and significantly associated with the three measures of NAS purchase. [source]

Evaluating the Characteristics of Corporate Boards Associated with Layoff Decisions

CORPORATE GOVERNANCE, Issue 2 2006
Alfred Yawson
The paper evaluates the characteristics of corporate boards associated with layoff decisions using a large sample of UK firms suffering performance declines over the period 1994,2003. The results show that firms are less likely to respond to performance declines with employee layoffs when they have large boards. Further analysis shows that layoff decisions are positively associated with the proportion of outside directors and directors' remuneration. The findings provide some support to the recommendations of the Cadbury Report (1992) and Higgs Review (2003) on the importance of the structure and composition of board of directors in the corporate governance process. [source]

An exploration of corporate attitudes to the significance of environmental information for stakeholders

CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 4 2003
David Collison
This paper reports on a questionnaire survey sent to environmental managers in quoted UK firms from environmentally sensitive sectors. A total of 58 usable responses was received, with most but not all being returned by environmental managers. While contextual information regarding perceptions of their companies' environmental sensitivity and management systems was sought, the main focus of the questionnaire was on respondents' views about stakeholder concerns. There was broad agreement that external stakeholders attached importance to environmental communications. The results indicate that respondents' perceptions of these issues were associated with the formality of their internal management systems and with the role of the respondents within their firms. It was also found that shareholders were thought to be the least interested stakeholder group. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment. [source]

The Impact of Managerial Entrenchment on Agency Costs: An Empirical Investigation Using UK Panel Data

EUROPEAN FINANCIAL MANAGEMENT, Issue 3 2009
Chrisostomos Florackis
G3; G32 Abstract This paper empirically investigates the relationship between managerial entrenchment and agency costs for a large sample of UK firms over the period 1999,2005. To measure managerial entrenchment, we use detailed information on ownership and board structures and managerial compensation. We develop a managerial entrenchment index, which captures the extent to which managers have the ability and incentives to expropriate wealth from shareholders. Our findings, which are based on a dynamic panel data analysis, show that there is a strong negative relationship between managerial entrenchment and our inverse proxy for agency costs, namely asset turnover ratio. There is also evidence that short-term debt and dividend payments work as effective corporate governance devices for UK firms. Finally, our findings reveal that agency costs are persistent over time. The results are robust to a number of alternative specifications, including varying measures of managerial entrenchment and agency costs. [source]

The Determinants of Debt Maturity Structure: Evidence from France, Germany and the UK

EUROPEAN FINANCIAL MANAGEMENT, Issue 2 2006
Antonios Antoniou
G20; G32 Abstract We examine the determinants of the debt maturity structure of French, German and British firms. These countries represent different financial and legal traditions that may have implications on corporate debt maturity structure. Our model incorporates the factors representing three major theories (tax considerations, liquidity and signalling, and contracting costs) of debt maturity. It also controls for capital market conditions. The results confirm the applicability of most theories of debt maturity structure for the UK firms. However, the evidence from France and Germany are mixed. Overall the findings suggest that the debt maturity structure of a firm is determined by firm-specific factors and the country's financial systems and institutional traditions in which it operates. [source]

Agency Costs and Strategic Considerations behind Sell-offs: the UK Evidence

EUROPEAN FINANCIAL MANAGEMENT, Issue 3 2001
Kevin M.J. Kaiser
We analyse the impact of the motivation behind the sell-off and the use of the proceeds from the sale on the value of UK firms divesting assets during 1984,94. We find that managers do not create value when they divest assets in order to raise cash, in order to reshuffle assets without increasing corporate focus and when they do not announce the motivation behind the sale. In contrast, we find value increases for firms refocusing during the 1990s and for firms divesting loss-making assets. Returning the proceeds from the sale to shareholders or reducing leverage were also associated with value increases, whereas reinvesting the proceeds for growth had a negative impact during the 1980s, which disappeared in the 1990s, possibly as a result of the disciplinary role of the economic downturn on the investment behaviour of firms. [source]

A Perspective on UK Productivity Performance

FISCAL STUDIES, Issue 3 2001
Nicholas Crafts
Abstract The paper reviews recent UK productivity performance using insights from new growth economics and its embodiment in growth accounting techniques. The sources of the UK labour productivity gap are found to differ across countries; broad capital per worker plays a larger part with regard to France and Germany while innovation matters more compared with the USA. The role of incentive structures is examined and the importance of competition as an antidote to agency problems in UK firms is highlighted. Current UK policy is reviewed and the need to address government as well as market failures is stressed. [source]

The Internationalisation of UK R&D

FISCAL STUDIES, Issue 3 2001
Nicholas Bloom
Abstract Policies to promote research and development (R&D) are high on the government's agenda. R&D and innovation are seen as key drivers of economic growth and important for raising UK productivity. This paper considers recent trends in UK R&D performance. We show that UK R&D is more internationalised than that of other G5 countries and is becoming increasingly so at a faster rate. A rising share of UK R&D is funded from abroad and UK firms are undertaking more of their R&D overseas. Using an international panel of countries, we show that R&D in one country responds to a change in the price in another ,competitor' country. This suggests that UK innovation policies could play an important role in determining whether increasingly footloose R&D locates in the UK or moves overseas. [source]

Managerial incentives and corporate leverage: evidence from the United Kingdom

ACCOUNTING & FINANCE, Issue 3 2009
Chrisostomos Florackis
G3; G32 Abstract This paper investigates the effect of managerial incentives and corporate governance on capital structure using a large sample of UK firms during the period 1999,2004. The analysis revolves around the view that managerial incentives are important in determining a firm's leverage. However, we argue that the exact impact of these incentives on leverage is likely to be determined by firm-specific governance characteristics. To conduct our investigation, we construct a simple corporate governance measure using detailed ownership and governance information. We present evidence of a significant non-monotonic relationship between executive ownership and leverage. There is also strong evidence suggesting that corporate governance practices have a significant impact on leverage. More importantly, the results reveal that the nature of the relation between executive ownership and leverage depends on the firm's corporate governance structure. [source]

Evaluating human capital: an exploratory study of management practice

HUMAN RESOURCE MANAGEMENT JOURNAL, Issue 4 2004
Juanita Elias
The article explores the development of systems of human capital evaluation in a number of large UK firms. Human capital is a much used term in business literature, and it is widely recognised that firms need to develop mechanisms to determine the value of their employee base. An extensive human capital literature has developed in which the authors propose elaborate systems for measuring a firm's human assets. This article does not seek to offer yet another human capital model. Rather, the aim is to examine the management practices through which human capital evaluation is undertaken. The article is based on an exploratory study of such practices in 11 major firms in the UK. The findings are highlighted as follows. First, we note the preference for internal over external (static accountancy-based) reporting. Secondly, we highlight the diverse nature of human capital evaluation systems that exist across UK business. Thirdly, we explore the relationship between practices of evaluation and the role and position of the HR function within the firm. Finally, in conclusion, we address the implications of the human capital perspective for practitioners, arguing that there is no single formula that can be applied to its evaluation. We go on to suggest that the importance of the human capital concept and its measurement may lie in its ability to re-frame perceptions of the relationship between the contribution of employees and the competitive performance of the business. [source]

Barriers to the development of teamworking in UK firms

INDUSTRIAL RELATIONS JOURNAL, Issue 2 2003
Harry Scarbrough
This paper is based on an empirical study of barriers to the adoption of teamworking in seven UK firms, including small manufacturing units, pharmaceutical organisations and telephone call centres. Such barriers arise from the tension between the ,microcultures' of teamworking at firm level and the logistical pressures of the supply chain. Successful adoption is seen as depending on management's ability to embed teamworking practices in the development of supply chain relationships. [source]

Modelling Transparency in Disclosure: The Case of Foreign Exchange Risk Management

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 5-6 2007
Andrew Marshall
Abstract:, When managers choose not to disclose all the relevant information in their possession in their financial statements, there is an information gap between the managers and users and consequently a lack of transparency. We model the degree of transparency observed when disclosures of foreign exchange (FX) risk management in financial statements are compared to managerial information on FX risk management policy, as evidenced in questionnaire responses. In this comparative study of US and UK firms we find incomplete disclosure in both samples but with differing aspects. In the US case, the information gap is lower where the information has higher relevance or firms with higher financial risk (greater leverage) are signalling the extent of risk, but the gap is greater where firms are in competitive product markets. For the UK sample, the information gap is significantly lower where firms have higher financial risk or higher liquidity but the gap is greater where the shares are more closely held. We conclude that modelling and explaining this aspect of incomplete accounting disclosure in an international setting must be sufficiently flexible to accommodate national differences in managerial behaviour. [source]

The Seasoned-Equity Issues of UK Firms: Market Reaction and Issuance Method Choice

The trade credit decision: evidence of UK firms

MANAGERIAL AND DECISION ECONOMICS, Issue 6-7 2003
Nam Sang Cheng
Trade credit finance and credit management are gradually gaining the research attention an area of such importance merits. One area, still far from resolved, is why trade credit is extended by non-financial firms to customers. This paper seeks to identify the generic forces behind the trade credit offer and to explore the empirical support for 20 propositions on credit motives derived from the literature and the implications of such motives to credit policies. The paper reports findings from a survey of senior finance officers involved in credit management in large UK companies. It assesses the degree to which theoretical explanations for granting trade credit are experienced in practice and whether observed differences attaching to credit motives among firms are associated with variations in credit policies and debtor days. The study found strong empirical support for seven propositions linked to competitiveness, pricing, investment and financing, and weaker support for a number of other theoretically-derived motives for trade credit extension. Factor analysis suggested a more insightful approach to classifying trade credit motives, covering investment in customers, customer's operating and financial benefits, supplier's marketing/operational benefits and market pressure to conform. In addition, two factors,customer relations and pricing flexibility,were extracted as motives for varying credit terms. Consistent with our hypothesis average debtor days were found to be significantly higher for those firms emphasising the financing, investment, and pricing flexibility propositions. These findings, and implications for future research, are explored. Copyright © 2003 John Wiley & Sons, Ltd. [source]

Corporate Reputation and Women on the Board

BRITISH JOURNAL OF MANAGEMENT, Issue 1 2009
Stephen Brammer
In this paper, we investigate the determinants of corporate reputation, derived from the assessments of managers and market analysts, of a sample of large UK firms. Along with the influences of a variety of firm attributes, we find a reputational effect associated with a female presence at board level. This effect varies across sectors and demonstrates the influence of a firm's stakeholder environment in determining whether a female presence on the board enhances or harms the reputation of the firm. The pattern that emerges indicates that the presence of women on the board is favourably viewed in only those sectors that operate close to final consumers. We argue that the nature of this effect reflects an imperative for equality of representation that highlights the need to reflect gender diversity among customers. [source]

Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis

BRITISH JOURNAL OF MANAGEMENT, Issue 3 2001
Sudi Sudarsanam
Extant research on corporate turnaround from financial distress has prescribed a range of strategies to effect corporate recovery. However, no large sample study has examined the general applicability and effectiveness of these strategies. We set out to test the effectiveness of strategies and identify the underlying factors of effectiveness , the impact of timing, intensity and implementation of strategies on corporate recovery. We examine a sample of 166 potentially bankrupt UK firms drawn from 1985 to 1993 and track their turnaround strategies for a period of three years from distress. These strategies include operational, asset, managerial and financial restructuring. Our results show recovery and non-recovery firms adopt very similar sets of strategies, and managers of non-recovery firms restructure more intensively than recovery firms Nevertheless, non-recovery firms seem far less effective in strategy implementation than their recovery counterparts. Whereas recovery firms adopt growth-oriented and external-market focused strategies, non-recovery firms engage in fire-fighting strategies. [source]

Productivity, exporting, and the learning-by-exporting hypothesis: direct evidence from UK firms

CANADIAN JOURNAL OF ECONOMICS, Issue 2 2008
Gustavo Crespi
Abstract., Case studies suggest exporters learn from clients. Econometric evidence is mixed. We use firm-level panel data on exporting and productivity with direct information on learning sources, including clients. We find: (a) firms who exported in the past are likely to learn more from clients (relative to other sources); (b) firms who learned from clients in the past are more likely to have faster productivity growth; (c) the reverse is not the case; that is, past productivity growth is not associated with more learning from clients and past learning from clients is not associated with more exporting. These results are consistent with the learning-by-exporting hypothesis. Des études de cas suggèrent que les exportateurs apprennent beaucoup de leurs clients. Les résultats de l'analyse économique sont moins concluants. On utilise des données de panel au niveau de la firme à propos des activités d'exportation et de la productivité, ainsi que des informations directes sur les sources d'apprentissage, y compris les clients. On découvre que (a) les firmes qui ont exporté dans le passé sont davantage susceptibles d'apprendre le plus de leurs clients (par rapport aux autres sources); (b) les firmes qui ont appris de leurs clients dans le passé sont davantage susceptibles d'avoir une croissance de productivité plus rapide; (c) le contraire n'est pas le cas, i.e., qu'une croissance de productivité dans le passé n'est pas associée avec plus d'apprentissage des clients, et que l'apprentissage dans le passé n'est pas associéà davantage d'exportation. Voilà qui est compatible avec l'hypothèse de l'apprentissage-par-l'exportation. [source]