Nguyen, P., Rahman, N. & Zhao, R. 2018, 'CEO characteristics and firm valuation: a quantile regression analysis', Journal of Management and Governance, pp. 1-19.View/Download from: UTS OPUS or Publisher's site
© 2017 Springer Science+Business Media, LLC This study investigates the effects of three highly-visible CEO characteristics on firm valuation. Using a sample of 2702 observations for Australian firms over the period 2001–2011, we find that CEO age is uniformly associated with lower firm valuation. CEO tenure is also associated with lower valuation, but more significantly so in the higher quantiles of firm valuation, that is for firms with high-growth opportunities. In contrast, CEO duality is found to be beneficial only for firms with high-growth opportunities. Overall, the study highlights the contingent relationship between CEO characteristics and firm valuation.
Nguyen, P., Rahman, N. & Zhao, R. 2017, 'Returns to acquirers of listed and unlisted targets: An empirical study of Australian bidders', Studies in Economics and Finance, vol. 34, no. 1, pp. 24-48.View/Download from: Publisher's site
This paper aims to evaluate the robustness of the listing effect in Australia, that is whether acquisitions of private firms create more value to the bidding firm's shareholders than acquisitions of publicly listed firms.
The authors analyze the market reaction to the announcement of takeover bids initiated by Australian public firms on private and public targets over the period 1990-2011. The analysis controls for a wide range of bidder, deal and target country characteristics that are likely to correlate with the target's listing status and acquirer abnormal returns. The authors also use a selection model to address the endogenous choice of the target's listing status.
The results indicate that bidders experience significantly higher abnormal returns of about 1.7 per cent in the 11-day event window when the target is a private firm. The authors show that this result is broad-based and persistent. It does not appear to depend on whether the target is small or large; whether it is related or unrelated to the bidder's industry; whether it is in the resources sector; and whether the transaction is domestic or cross-border. They find some evidence that bidder returns might be stronger for larger acquisitions, for unrelated targets, and in poor market conditions such as in the wake of the recent global financial crisis.
The research would benefit from the inclusion of the bidding firm's ownership and governance characteristics.
The results support the view that market frictions contribute to make private firms attractive targets.
The analysis confirms the pervasiveness of the listing effect in a market characterized by a lesser degree of competition, higher search costs and the significance of the natural resources sector.
Nguyen, P., Rahman, N., Tong, A. & Zhao, R. 2016, 'Board size and firm value: evidence from Australia', Journal of Management & Governance, vol. 20, no. 4, pp. 851-873.View/Download from: Publisher's site
Nguyen, P.D. & Rahman, N. 2015, 'Which governance characteristics affect the incidence of divestitures in Australia?', Australian Journal of Management, vol. 40, no. 2, pp. 351-374.View/Download from: Publisher's site
We show that announcements of divestitures by Australian firms induce a significant increase in shareholder value. While the extent of the market reaction depends on the relative size of the divested asset, high leverage and poor operating performance do not appear to generate higher returns. The application of quantile regressions reveals a high degree of asymmetry in the market reaction. We also find that increased focus through the divestiture of non-core assets is no longer associated with higher returns.
Nguyen, P.D., Rahman, N. & Zhao, L. 2013, 'Ownership structure and divestiture decisions: Evidence from Australian firms', International Review of Financial Analysis, vol. 30, pp. 170-181.View/Download from: UTS OPUS or Publisher's site
Divestitures create shareholder value by helping firms to optimize their portfolio of assets. However, firms may forego value enhancing divestitures because of agency problems. More specifically, large controlling shareholders may prefer to retain the assets in order to extract private benefits of control at the expense of minority shareholders. In this paper, we explore the role that other blockholders play in constraining the largest shareholder's influence. The results indicate that divestiture activity decreases with the ownership of the largest shareholder. The presence of another significant blockholder appears to curb this negative bias towards divestitures. Our findings provide an economic rationale for the higher performance of firms characterized by more balanced ownership structures. Involvement of family owners also appears to provide similar benefits.
Rahman, N. & Walker, S. 2005, 'The effect of acquisition method on shareholder wealth', 18th Australasian Finance and Banking Conference, Australasian Finance and Banking Conference, -, Sydney, Australia.
Rahman, N. 2003, 'Do institutions affect dividend policy? Evidence form international data', 17th Australasian Finance and Banking Conference, --, Sydney, Australia.
Rahman, N. 2002, 'Ownership Structure and Dividend Smoothing: Cross-Country Evidence'.