Bureau Van Dijk Research Articles

Does Financial Fair Play Matter? The Real Effects of UEFA Regulation for European Football Clubs

We provide the first detailed quantitative assessment of the effects of the Financial Fair Play Regulation (FFPR) introduced by the Union of European Football Associations (UEFA) on the income statements and balance sheets of European football clubs. While other studies exist documenting the financial challenges of the European football industry, to the best of our knowledge none has yet analyzed the implications of the FFPR. Our analysis relies on two two sources of information, one we assembled using information from Amadeus (Bureau van Dijk) and the other collected by the UEFA for the specific purpose of implementing the FFPR. Drawing on Amadeus data and regression outputs provided by the UEFA, we consistently find that the introduction of the FFPR has been followed by a significant improvement in the clubs’ income statements, which is consistent with the new accounting rules having ‘real effects’ on the clubs’ management. However, this positive development has yet to be paralleled also in the club’s balance sheets (notably in terms of debt) and cash flow statements, which may call for the FFPR to be further extended in that direction.

Loan Loss Provision and Risk-Taking Behavior of Commercial Banks in Pakistan: A Dynamic GMM Approach

The paper analyzes the determinants of the loan loss provision (LLP) of 22 commercial banks in Pakistan from 2010 to 2017. The motive of the research is that LLP is a measure of credit risk as a proxy for bank risk-taking behavior profits and banks’ sustainability. Especially after the occurrence of a global financial crisis. The quantitative research method of data collection from Bureau Van Dijk’s BankFocus portal and the World Bank’s World Development Indicators. Other than considering specific bank variables such as capital adequacy ratio, return on average equity, and government securities, the effects of macroeconomic variable inflation and lending interest rates are explicitly studied. The model of pooled ordinary least squares (POLS), fixed effect (FE), panel corrected standard error (PCSE), and panel data estimation in the form of a general method of moments (GMM) two-step system is used to find the risk-taking behavior of banks in Pakistan. The results obtained by the use of inflation (INF) as an instrumental variable of LLP are highly dependable with a negative impact on loan loss provision. Lending interest rate (LIR) has a positive and significant relationship with LLP and contribute in the study of macroeconomic variables for bank risk-taking, excessive amount of interest rate was not beneficial for banks to earn profits especially during the economic crises. Return on average equity (ROAE) significantly moderates LLP with a negative interaction and helped the bank with profitable operations and save bank from solvency. Capital adequacy ratio (CAR) and government securities (GOV) are insignificant to LLP. The result is robust by measure of endogeneity, and highlights the important role of commercial banks’ sustainability to explain risk-taking behavior in Pakistan with the intention to increase profits after the occurrence of financial crises. The study further contributes to future research on managerial policy and decision making. In summary, the paper on loan loss provision has the capacity to forecast commercial banks’ credit risk for risk-taking in an emerging country.

Community-Based Cooperatives as an innovative partnership to contrast inner areas decline

The paper aims to describe the main characteristics of CBCs, and to highlight their outcomes in economics and social terms. The data, referring to year 2016, originates from the aida database of Bureau van Dijk. However, the sample construction took a number of steps: 1) interviews with privileged witnesses, 2) web search, 3) aida database interrogation; selection of the cooperative enterprises and checking their features, and 4) final database implementation. Our sample, consisting of 32 observations, has been segmented by means of a cluster analysis, with the aim of subdividing the CBCs in homogeneous groups on the basis of the variables under consideration. The results show that CBCs may contribute to prevent inner areas decline, mainly by the provision of essential services to the whole community; this is a benefit created by means of business activity and the participation of its members to its management. Nevertheless, the results also show a limited ability of CBCs to make investments on the areas in which they operate. As a consequence, CBCs have a low employment capacity. In every case, uncertainty on the real CBCs number and the limited sample size do not allow for a generalisation of these results.

Firms’ growth, green gazelles and eco-innovation: evidence from a sample of European firms

This paper investigates the impact of eco-innovation, i.e., innovations aimed at improving firms’ environmental performances, and environmental policy stringency on firms’ growth processes, with a special focus on gazelles, i.e., firms that show higher than average growth rates. In a context shaped by more and more stringent environmental regulatory frameworks, we posit that inducement mechanisms and the regulatory push/pull effect expand the derived demand for eco-innovations suppliers. For these reasons, we expect a positive association between the generation of EIs and sales growth, which is magnified by increasing policy stringency. The empirical analysis is based on firm-level data drawn from the Bureau van Dijk Database, coupled with patent information obtained from OECD Science and Technology Indicators. The results confirm that eco-innovations are likely to augment the effects of generic innovation on firm growth, and this is particularly true for gazelles. Policy stringency is important in moderating the effects of eco-innovation on growth for gazelles, but even more so for slow-growing firms.

City Specialisation and Diversifi cation in South East Europe (SEE) Countries

The main objective of the paper is to study the role of localisation and the urbanisation (or diversifi cation) economies in urban post-transition SEE, by constructing and analysing manufacturing specialisation and diversifi cation measures over the period 2006-2013. The second objective of the paper is to analyse differences within manufacturing industry across cities in terms of their technological complexity. Industries are mapped across cities with over 50,000 populations (98 cities in six SEE, covering 35.3% of the total SEE population), a population threshold that is in line with previous literature. The data were obtained from Bureau Van Dijk’s Amadeus fi rm-level database containing, most importantly, balance sheet data and profi t-and-loss account data for CEE. The analysis of manufacturing industry diversifi cation and specialisation in the cities is based on the relation between agglomeration economies of the Marshall-Arrow-Romer type (economies of location or specialization) and the Jacobs-Porter type (economies of urbanization or diversifi cation). Analysis results revealed that a particular specialisation pattern that would point to a homogenous system of cities throughout the region could not be confi rmed. City specialisation in manufacturing was negatively correlated to city size in SEE, but this relation has not shown particularly strong. Similarly to other countries, top-specialised cities are specialised in manufacturing closely related to natural resources such as petroleum products and tobacco, pointing to advantages arising from “fi rst nature” geography. However, diversity and specialisation are not exact opposites, as there are cities which are both diversifi ed and specialised. The results of the second part of the analysis show that medium-low technology and low technology groups of industries in manufacturing prevail in total turnover, with 36.2% and 35.0% share, respectively. City specialization in the prevailing technology group in SEE, in medium-low technology, is highest in Bulgarian, Bosnian and Herzegovinian and in Croatian cities.

The Rush for Patents in the Fourth Industrial Revolution: An Exploration of Patenting Activity at the European Patent Office

Objectives.The main objective of the present study is to provide a comprehensive coverage of the patenting activity at the European Patent Office by companies in the remit of the fourth industrial revolution (4IR). We also aim at moving forward the understanding of the firm-level patenting activity of 4IR technologies. Methodology. We do so by conducting an empirical assessment of the development of technologies related to the 4IR via the analysis of patents filed at the European Patent Office between 1985 and 2014. We employ a new matched patent-firm data set provided by the Bureau Van Dijk: ORBIS-IP. Findings. In line with results from the recent literature, we find evidence of a surge in patenting activity related to the 4IR in the past three decades, particularly in networked devices. Our results also suggest that firms filing 4IR patents have become progressively younger on average. At the same time, we find a steady growth in the average number of 4IR patent applications filed yearly by each company. Research limits. Our exploration is a first step towards a better comprehension of the 4IR patent arena. Being mainly a “thick” description, we did not analyze antecedents and effects of 4IR patent applications. A comparative and longitudinal analysis of patent applications and patents granted would be a first step in this direction. As a second step, quantitative and qualitative studies on how 4IR patents contribute to firms’ exploration and exploitation capabilities as well as to firm performance would be highly beneficial. Practical implications. Further variance decompositions show that the surge in 4IR patent applications is mainly explained by incumbent firms filing more 4IR patent applications over time, rather than new entrants progressively populating the 4IR world. Finally, we uncover a general trend emerging at the firm level, whereby firms tend to specialize in few technological areas and avoid differentiation. Originality of the study. Despite a surging interest related to the 4IR from different stakeholders (mainly practitioners and policy makers), comparatively less attention has come from academia, which has focused on the single technologies comprising the 4IR such as artificial intelligence, additive manufacturing and the internet of things. Although there is a solid body of scholarship in the area of engineering and information systems that has focused on the topic (see surveys from Lu, 2017 and Liao, 2017), comparatively less studies are available within the management and economics fields. We aim at fill this gap by providing a detailed empirical assessment of the 4IR as a whole. We do so by analyzing patenting activity at the EPO in all the possible technological fields comprising the 4IR. We also attempt a first focus of patenting activity in the 4IR at the firm-level by characterizing companies along several dimensions.

TOTAL FACTOR PRODUCTIVITY CHANGE IN THE REIT INDUSTRY: THE CASE OF MALAYSIAN REITS DURING AND POST GLOBAL FINANCIAL CRISIS

The paper examined productivity changes for the Malaysian Real Estate Investment Trust (M-REITs) using a non-parametric approach of Malmquist Productivity Index (MPI) of Data Envelopment Analysis (MPI-DEA). Data was attained from M-REIT annual reports, Thomson Reuters Datastream and Osiris via Bureau Van Dijk for 2007-2015. The non-parametric approach of MPI-DEA examined the Total Factor Productivity Change (TFPCH), Technological Change (TECHCH), Efficiency Change (EFFCH), Pure Technical Efficiency Change (PEFFCH) and Scale Efficiency Change (SECH) indices. On average, the M-REIT industry has faced 14.91% of productivity regress during 2007-2015 period, comprising 49.90% of efficiency increase and 33.40% technological regress. The decomposition of the productivity change index suggests that Malaysian REIT productivity changes were mainly due to efficiency change rather than technological change. These findings could help M-REIT managers to formulate ways to enhance their REIT productivity. The findings are also applicable tosimilar Shariah compliant real estate investment or socially responsible investment.

TOTAL FACTOR PRODUCTIVITY CHANGE IN THE REIT INDUSTRY: THE CASE OF MALAYSIAN REITS DURING AND POST GLOBAL FINANCIAL CRISIS

The paper examined productivity changes for the Malaysian Real Estate Investment Trust (M-REITs) using a non-parametric approach of Malmquist Productivity Index (MPI) of Data Envelopment Analysis (MPI-DEA). Data was attained from M-REIT annual reports, Thomson Reuters Datastream and Osiris via Bureau Van Dijk for 2007-2015. The non-parametric approach of MPI-DEA examined the Total Factor Productivity Change (TFPCH), Technological Change (TECHCH), Efficiency Change (EFFCH), Pure Technical Efficiency Change (PEFFCH) and Scale Efficiency Change (SECH) indices. On average, the M-REIT industry has faced 14.91% of productivity regress during 2007-2015 period, comprising 49.90% of efficiency increase and 33.40% technological regress. The decomposition of the productivity change index suggests that Malaysian REIT productivity changes were mainly due to efficiency change rather than technological change. These findings could help M-REIT managers to formulate ways to enhance their REIT productivity. The findings are also applicable to similar Shariah compliant real estate investment or socially responsible investment.

Repeat Research and Comparison of Czech, Slovak and Swiss Product Innovation Oriented Firms' Communication in Social Media

The objective of the research described in this article is a repeat analysis and comparison of social media communication channels used in Czech, Slovak and Swiss product innovation‑oriented companies, where the Swiss set of companies is used as a benchmark. The research is conducted using the same methodology as previous research described in Chlebovský (2015). The use of the same methodology allows comparison of the both research results and discussion on the development of social media use in marketing communication of production innovation‑oriented companies in selected countries. The primary research was carried out by scanning the social media use of the selected companies. European company database Amadeus, provided by Bureau van Dijk, was used for company selection in all three countries under the same search criteria. The set of companies researched covers the highest turnover product innovation‑oriented companies. Each particular sample set covered 100 companies from each country. The activity of the selected companies on Facebook, YouTube, Twitter, Instagram and LinkedIn were observed and particular metrics were scaled. Microsoft Excel was used for storing, statistical processing and graphic outputs of the research. The hypotheses formulated were statistically tested and the results confirmed. In order to confirm or reject normal data distribution, the Anderson‑Darling Normality Test was performed through all three sample sets. This test rejected normal data distribution for all three data sets. The non‑parametric Mann‑Whitney U test was then used to test the hypothesis. Evaluation of the results in comparison with previous research shows an increase in use of social media in communication of Czech and Slovak companies. Hypothesis tests show that Czech product innovation‑oriented companies are statistically equal in activity and success in communication through social media compared to the Swiss benchmark. Slovak companies are still behind the Swiss benchmark.

Building a firm level dataset for the analysis of industrial dynamics and demography

This paper illustrates the building procedure of a firm-level panel dataset that merges several sources of information concerning the various activities of business firms. The aim of this work is to achieve a detailed dataset able to shed light on firm demographics, in terms of survival, entry and exit processes, distinguishing between “voluntary and “involuntary exits. Moreover, the derived dataset allows to monitor the innovation activities of the firms and also to capture complementarities between two instruments of intellectual property rights (IPRs), namely granted patents and registered trademarks. We assess the validity of the proposed procedures resorting to the virtual universe of Italian limited liability companies as provided by Bureau van Dijk (BvD). The dataset covers more than 1 million companies operating in both manufacturing and service sectors and contain financial and economic information, as well as, among the others, the ownership structure and administrative procedures undergone by the firms, which may lead to firm exit. The main purpose of the paper is to provide a unified set of procedures to help the researcher dealing with the vast amount of information available on corporate firms and of ever increasing size. This will also facilitate the replication of empirical analyses, across researchers working on dataset with similar characteristics, although from different countries or data providers.

Выживает сильнейший? Измерение конкурентного отбора на примере Уральского федерального округа

It this article we analyze the strength of market selection for a wide range of industries in the Urals Federal District (UFD) and compare it with the results for several foreign countries. The empirical analysis is based on the Ruslana database provided by Bureau van Dijk (BvD) for the period from 2006 to 2015. For the first stage of the analysis, we resort to the well-dis­cussed method of aggregated labor productivity decomposition at the industry level into two main processes, namely, the growth of productivity within the firm and the redistribution of market shares between firms on the market. The results obtained show that the industrial productivity growth is almost entirely explained by the increase in productivity at the level of the firms, while the role of market selection is negligible. However, due to a number of limitations of this approach, it would be incorrect to deny the significance of the competition as a whole. For this reason, at the second stage we consider the relationship between the growth of firms’ revenues and their productivity directly. Our results show that the role of market selection in explaining firm growth is small in Russia and is lower in comparison with developed countries. This result holds if instead of labour productivity one uses total factor productivity. The revealed weak interrelation indicates the need to improve industrial policy in the direction of increasing the efficiency of competition.

Guide to the galaxy of EU regional funds recipients: evidence from new data

This study presents a new firm- and project-level dataset containing data on over two million projects co-funded by the EU structural and cohesion funds in 25 EU member states during the programming period 2007–2013. Information on individual beneficiary firms and institutions is linked with business data of Bureau van Dijk’s ORBIS database. Moreover, text mining techniques are applied to categorise the EU cohesion policy projects into fifteen thematic categories. Stylised facts reveal substantial regional heterogeneity in the distribution of funds to certain projects and beneficiaries (with respect to their size or industry). Furthermore, regional funds distribution differs across less developed and higher-income as well as urban and rural regions. In an econometric analysis, we control for project and firm characteristics that we expect to determine the single project’s value, which is confirmed by the results. Nevertheless, there remains unexplained variation in individual project volumes, which differs systematically across countries.

The Quality of Bankruptcy Data and its Impact on the Evaluation of Prediction Models: Creating and Testing a German Database

This study assesses the impact of the quality of bankruptcy data on the estimation and evaluation of bankruptcy prediction models. To meet this objective, we develop a systematic methodology to obtain bankruptcy information from corporate news releases and public sources. Then, applying this methodology to the German market, we create a bankruptcy database that includes a higher number of and more accurate bankruptcy events as well as more accurate bankruptcy dates than those in the frequently used databases of Bureau van Dijk and Compustat Global. We use our bankruptcy data to conduct two empirical analyses. First, using our more accurate database, we compare the performance of several bankruptcy prediction models in the context of Germany. Second, we compare our database with Bureau van Dijk data and find that the quality of bankruptcy data significantly affects the parameter estimates and the out-of-sample evaluation of bankruptcy prediction models. Therefore, we suggest revising evidence presented by bankruptcy studies that use inaccurate bankruptcy information.

Asymmetric information and deal selection: evidence from the Italian venture capital market

The aim of this study is to show how information asymmetry affects the venture capital (VC) deal selection process in the Italian capital market. In this paper, the authors want to analyse how venture capitalists (VCs) choose which new companies to sustain. In the absence of information about these start-ups, investors encounter difficulties when evaluating the quality of new firms. VCs can only assess the value of observable characteristics, relying on a background affected by information asymmetries, such as the entrepreneur and the management team, patents, and the presence of strategic alliances. The authors use information collected in a dataset built on information contained in the Bureau van Dijk database, completed with data collected through a survey sent to VC funds. The period under observation is between 2012 and 2017. The dataset is composed of 150 observations, and represents a significant sample of the Italian market. The results show that there is a positive relationship between management education, the management team’s international experience, number of patents and the likelihood of receiving financing from VCs. This reasoning allows for highlighting the importance of matching the business idea with the investment decision made between VCs and new enterprises, especially when the better-informed part, the firms, can send a signal of quality to the less-informed part, the VCs.

Corporate Governance Influence on Banking Performance. An Analysis on Romania and Bulgaria

Abstract The aim of the paper is to find if the corporative governance characteristics have an impact on bank performance. We conducted an OLS regression on panel data (fixed, random effects and first-difference). We used data from Romanian and Bulgarian commercial banks as reported by Bureau van Dijk database and categorical variables manually collected by analyzing the annual reports of the banks from our sample. These latest dummy variables reflect the corporative governance component for our model. The data used in our paper is from 2003 to 2015 period. Our results showed that there are some statistically significant effects of our categorical variables on bank profitability in both countries, so, the good practice of corporate should be applied for obtaining higher bank’s performance.

Firm-level intra-industry links in Croatia’s tourism industry

In this paper we investigate firm level activity in Croatian tourism industry. Our analysis is based on the sample of more than 10,000 firms obtained from Bureau van Dijk database for the period 2006-2015. Theoretical basis of our paper is the Gibrat’s law, which states that firm size and growth rate are independent of each other. Within tourism industry, we diJerentiate between supporting divisions and the main industry division (accommodation industry), and test the Law on firms in supporting divisions using modified hybrid estimator. In that way, we add to the existing field of knowledge in two ways: through analysis and quantification of intra-industry links within the Law’s framework and by employing hybrid estimator originally developed by Mundlak, which is a novelty in this field of research. Although, our findings do not confirm the Law, we are able to discern supporting tourism industry divisions whose growth is highly determined by the growth of accommodation industry.

Ownership structure and firm patenting activity in Italy

This paper sheds light on firm-level heterogeneity in patent propensity by studying the relationship between ownership structure and patenting activity in Italian manufacturing firms from 2006 to 2013. Both patent and accounting data are extracted from the Bureau van Dijk’s Orbis database. Our empirical findings show that ownership concentration increases the probability of successful patent applications, but at decreasing returns to scale. Moreover, there is a close association between several firm-level dimensions and innovative performance. Some differences arise when large firms and SMEs are examined separately, but the analysis as a whole would confirm the importance of ownership concentration for patenting activity. The empirical results hold also when the analysis explicitly deals with the endogeneity problem.

Profitability of foodstuff processing companies in V4 countries during the 2008-2012 economic crisis

Food processing companies in the members of the Visegrad Group have had similar conditions to sustain and develop their business activities since entering the single European market in 2004. It is necessary above all to stress the levelling instruments of the Common Agricultural Policy within the context of negative external impacts, which diminish in relation to the economic status of businesses, specifi cally SMEs. The objective of this paper is to identify similarities and differences in the profi tability of foodstuff producers from the Visegrad countries during the global economic crisis between 2008 and 2012. The paper uses fi nancial and non-fi nancial factors and employs a multiple correspondence analysis approach. Corporate fi nancial data for the companies was sourced from the Amadeus of Bureau van Dijk database for 2008-2012. Non-fi nancial factors within the sample of business entities include economic size and residence. The fi ndings reveal similarities in corporate profi tability among observed countries of residence and other distinctive factors.

Motives of mergers and acquisitions by state-owned enterprises

PurposeThis paper looks at state-owned enterprises (SOEs) from the angle of the market for corporate control and analyzes in detail the reported rationales of a sample of 355 mergers and acquisition (M&A) deals performed by SOEs as acquirers over the period 2002-2012. The purpose of this paper, after having created a taxonomy of deal motivations, is to empirically test two alternative hypotheses: deviation vs convergence of M&A deal rationales between state-owned and private enterprises.Design/methodology/approachThe data set is obtained by combining firm-level information from two sources, Zephyr and Orbis (Bureau Van Dijk). A recursive algorithm is developed to infer the ownership nature of the enterprises at the time the deal took place and then the authors double-checked the identity of the global ultimate owner by visual inspection of all the available information. Motivations are analyzed through a case-by-case analysis and classified into several categories, thereby providing a taxonomy of rationales behind SOE M&As and discussing their differences and similarities relative to private firms.FindingsMore than 60 percent of the deals performed by SOEs as acquirers are driven by “shareholder value maximization” motives, similarly to private enterprise acquirers. The other 40 percent of deals are almost equally spread among three rationales that specifically relate to the role of modern state capitalism in the economy. “Financial distress” motivation, which is the only one clearly deviating from the objectives of profit maximization typical of private ownership, is far less important than the others.Research limitations/implicationsThe paper does not analyze the case studies in detail. Neither does it correlate the evidence with the quality of corporate governance or the quality of institutions in the country. This would be interesting in order to discover whether the alignment of objectives between public and private enterprises is enhanced by certain features of public sector management, as suggested by the OECD (2015) Guidelines.Practical implicationsThe paper suggests some policy implications in terms of reforms of the corporate governance of the SOEs and accountability of their management against clearly stated public missions. It also calls for the need for citizens to be informed in a transparent way about the rationales of major M&A deals when a SOE is on the acquirer side, and the consistency of such rationales with the mission assigned by governments to the enterprises they own. Finally, it underlines that regulatory concerns raised in many countries by the rise of cross-border SOE M&As are in most of the cases unfounded.Originality/valueExisting literature has mainly focused on private corporate M&A deals or has just disregarded the ownership status of the acquiring firm. This paper focuses on the motivations for SOE deals in order to elaborate a taxonomy of SOE deal rationales and to identify the differences and similarities between private corporate firms.

Internationalization and performance: the role of depth and breadth

ObjetivoEste artículo analiza la relación entre la multinacionalidad y el desempeño de la empresa (M-P) en compañías latinoamericanas, conocidas como multilatinas. El estudio conceptualiza la profundidad (intensidad) y extensión (alcance geográfico) de la internacionalización, y examina su efecto en el desempeño financiero. Aunque varios investigadores han estudiado cómo la internacionalización en diversos contextos e industrias afecta el rendimiento, poco se sabe con respecto a las empresas en América Latina.Diseño/metodología/enfoqueLos autores realizaron un análisis del efecto producido por la profundidad y extensión de la internacionalización de la multilatina en el desempeño financiero, mediante la creación de una base de datos con información de América Economía, una revista chilena especializada que publica anualmente un ranking de multilatinas. Datos adicionales provienen de la base de datos Osiris de Bureau Van Dijk y de Compustat. Las hipótesis fueron probadas usando un modelo heterocedástico autoregresivo.ResultadosLos resultados muestran que el grado de profundidad y extensión de la internacionalización afectan el rendimiento financiero. La profundidad de internacionalización de las multilatinas tiene un efecto curvilíneo (en forma de U) sobre el desempeño financiero, mientras que la extension geográfica tiene un efecto curvilíneo invertido en dicho desempeño.Limitaciones/implicaciones de la investigaciónLa sección teórica y los resultados extiende la literatura sobre la internacionalización y el desempeño de las empresas al distinguir entre dos tipos de expansión internacional: profundidad y extensión. También se discute cómo cada uno contribuye a las diferentes etapas de la teoría de la multinacionalidad y desempeño.Originalidad/ValorLos resultados indican que las multilatinas se benefician de su expansión regional. Sin embargo, fuera de América Latina, dicha expansión tiene un efecto negativo sobre el desempeño financiero. También se señala que las empresas pueden implementar diferentes tipos de estrategias de internacionalización en términos de intensidad y alcance para lograr un mejor desempeño.