Research Output
1 - 10 of 20
Publication
Media-expressed negative tone and firm-level stock returns
2016-04, Ahmad, Khurshid, Han, JingGuang, Hutson, Elaine, Kearney, Colm, Liu, Sha
We build a corpus of over 5½ million news articles on 20 large US firms over the 10-year period from January 2001 to December 2010, and use it to study the time-varying nature of the relation between media-expressed firm-specific tone and firm-level returns. By estimating a series of separate rolling window vector autoregressive (VAR) models for each firm, we show how media-expressed negative tone impacts firm-level returns episodically in ways that vary across firms and over time. We find that firms experience prolonged periods during which media-expressed tone has no effect on returns, and occasional episodes when it has a significant impact. During the significant episodes, its impacts are sometimes quickly reversed and at other times they endure — implying that media comment and analysis can sometimes be sentiment (or noise), but it can also contain value-relevant information or news. Our findings are in general consistent with efficiently functioning markets in which the media assists with the processing of complex information.
Publication
Competitiveness implications for Ireland of EU enlargement
2003, Barry, Frank, Hannan, Aoife, Hutson, Elaine, Kearney, Colm
Subject to ratification, a further ten states, primarily from Central and Eastern Europe will accede to the EU in May 2004. Another two, and possibly three, CEE states are likely to join in 2007. The present paper assesses the competitiveness implications of this phase of EU expansion for Ireland. Four specific topics are considered: the opportunities for trade and investment expansion, the implications for Ireland's ability to attract FDI, the likely levels and consequences of immigration from Central and Eastern Europe, and the budgetary implications for the Irish Exchequer.
Publication
Takeover bids, share prices, and the expected value hypothesis
1994-04, Hutson, Elaine, Partington, Graham
This paper examines the relationship between the price bid for a takeover target, the probability of the bid succeeding and the target's price over the course of the bid. We test and reject Samuelson and Rosenthal's (1986) expected value hypothesis. We find that over the bid, the price of the target of a successful bid typically rises towards the bid price, but is not observed to converge with the bid price. This lack of observed convergenece appears to be due to an early cessation of trading in many of the bids that succeed. In the case of bids that fail, the target's share price is typically observed to rise above the bid price early in the bid. We consider several explanations for this, and suggest that the expectation of a subsequent bid is the most plausible explanation. This is supported by our empirical evidence. We also find that in the cases where the bids fail, early cessation of trading did not occur in the majority of cases.
Publication
Do private equity buyouts represent value for target shareholders? Premiums in the boom of the early 2000s
2008-04, Hutson, Elaine, Mahony, Darragh
This study compares the takeover premiums for 55 private equity buyouts with 59
takeovers involving a public acquirer, from the US takeover market between 2004 and 2007. This investigation takes place amidst accusations of anti-competitive behaviour
against some of the most active private equity groups in the US. While controlling for several other factors that might affect the takeover premium, we find weak evidence
that bid premiums are significantly lower for target firms undergoing a private equity
takeover than those subject to takeovers by public companies. We also demonstrate that
abnormal returns earned by targets around takeover announcements can be a biased and
misleading proxy for takeover premium.
Publication
The early managed fund industry : investment trusts in 19th century Britain
2003-09, Hutson, Elaine
The early years of the 21st century have been a difficult and challenging time for the managed funds industry. The neglected history of managed funds reveals prior episodes of sustained growth, questionable practices, upheaval and inevitably, regulation. The first fully diversified managed fund appeared in Britain in 1868, and the industry remained largely a British preserve until the rise of the investment company and the mutual fund in the United States during the 1920s. This paper documents the features of the early trusts, discusses the rise of the industry and the challenges it survived in the early years, and draws parallels with facets of the finance industry of today.
Publication
The Irish Aviation Authority's cost of capital : report to the Commission for Aviation Regulation
2007-03, Hutson, Elaine, Kearney, Colm
The weighted average cost of capital (WACC) approach is used to estimate the IAA's cost of capital. To implement this approach, it is necessary to estimate the IAA's cost of equity, its cost of debt and its gearing ratio. Following a brief financial summary, the cost of equity is discussed in Section 3, the cost of debt is discussed in Section 4, the IAA's gearing is discussed in Section 5, and Section 6 brings these together in the WACC calculations to derive the estimate of the IAA's cost of capital.
Publication
Hedge funds : the case for disclosure regulation
2003, Hutson, Elaine, Donabedian, Michelle
Unlike mutual and pension funds, which are heavily regulated in most juristrictions, hedge funds are largely unregulated. Because they are not required to report to regulators and to the public, data on hedge fund performance are highly biased, overestimating returns and underestimating risk. Recent debate regarding regulation has centred on market integrity and systematic risk issues. This articles presents the case for a change in focus towards consumer protection as the most important regulatory issue and recommends that performance reporting should be made mandatory.
Publication
What factors determine the use of venture capital? Evidence from the Irish software sector
2004, Hogan, Teresa, Hutson, Elaine
We address the venture capital financing issue from the firm’s perspective. Using survey data for 110 new technology-based firms (NTBFs) in the Irish software sector, we assess the extent to which 5 human capital and 3 other variables determine the firm’s use of venture capital. Education of the lead founder to degree level is the only significant human capital variable, and it is directly related to the likelihood of being venture capital-backed. Venture capital-backed firms have significantly higher start-up costs, and their founders are less averse to loss of control than non-venture capital-backed firms. We conclude that the use of venture capital is dictated largely by the willingness of founders to relinquish control.