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NEWSLETTER of December 7, 2018

 

The following content has been added at finexpert:


Studies > Performance

Bain & Company

IN SEARCH OF CUSTOMERS WHO LOVE THEIR BANK: CUSTOMER LOYALTY IN RETAIL BANKING REPORT

With banks under attack from technology firms, their top priority should be improving the convenience and quality of the experience for customers. Loyalty stems from how well banks deliver value as perceived by consumers, which companies can measure through 30 Elements. The elements that have the greatest impact on loyalty in banking are quality, followed by saves time, reduces anxiety, simplifies and heirloom. On each of these five elements, at least one large tech firm performs better than survey respondents' primary bank. That helps tech firms earn customers' trust at a level near banks. >more

Studies > Performance

BlackRock

GLOBAL EQUITY OUTLOOK: HEAT IS ON FOR TECH STOCKS AMID U.S.-CHINA COLD WAR

The U.S. and China are the two global leaders in technology, and the tech sector is the largest constituent in both countries’ equity markets. Tensions between the two superpowers, with tech dominance a central issue, are sparking concern. Recent tech stock selling has only fanned the flames. >more

Studies > Performance

Invesco

BLOCKCHAIN AND THE RESHAPING OF INVESTMENT MANAGEMENT

In this article, we cover various aspects of the blockchain phenomenon, with a focus on capital markets. Our central argument is that the blockchain will transform the capital markets by speeding up settlement and clearing, enabling “smart contracts”, making data delivery faster and encouraging disintermediation. We also cover possible threats to this development, especially regulatory issues, and discuss potential risks arising from the new technology. >more

Studies > Macro

European Investment Bank

EIB INVESTMENT REPORT 2018/2019: RETOOLING EUROPE’S ECONOMY

The Investment Report, issued annually by the European Investment Bank, provides a comprehensive overview and analysis of investment and the financing of investment in the European Union. The report builds on a unique set of databases and survey data, including the annual EIB Investment Survey of 12500 firms across Europe. It provides critical inputs to policy debates on the need for public action on investment, and on the types of intervention that can have the greatest impact. >more


Research Papers > Corporate Governance

POWERFUL CEOS AND CORPORATE GOVERNANCE

Mark Humphery-Jenner, Emdad Islam, Lubna Rahman, and Jo-Ann Suchard
2018
Excessive CEO power is often regarded as value-destroying. We use a quasi-exogenous regulatory shock to analyze whether forced changes in board composition help to reign in powerful CEOs. We find that post-regulation, firms led by powerful CEOs, on average, initiate a strategic shift in resource allocation. Firms managed by powerful CEOs increase innovation inputs (R&D expenditures) and produce more innovation outputs (patents) that are scientifically more important and economically more valuable. We also find that powerful CEO managed firms are more likely to pay dividends and reduce investments in capital expenditures. Investment quality also improves, manifesting in better takeover performance. Our results suggest that firms with an independent board can balance executive power, force powerful CEOs to consider other opinions, and reign in value destruction. >more

Research Papers > Corporate Finance

DO DIVIDENDS CONVEY INFORMATION ABOUT FUTURE EARNINGS?

Charles (Chad) Ham, Zachary Kaplan, and Mark T. Leary
2018
In contrast to the literature’s current consensus, we show that dividends contain highly persistent information about future earnings levels. Using an “event window” approach that compares earnings after dividend changes to those before, we find dividend changes predict unexpected future earnings for horizons up to three years. The attenuation in earnings information noted by prior studies disappears after controlling for (i) endogenous investment and asset write-downs accompanying dividend changes and (ii) the non-linear relation between dividend changes and market reactions. Our results suggest the market reaction to dividend change announcements reflects, at least in part, new information about future earnings. >more