Capital Assets Research Articles

Does green intellectual capital matter for reverse logistics competency? The role of regulatory measures

PurposeDespite its potential advantages in a wide range of environmental subjects, green intellectual capital has received scant attention in the field of reverse logistics (RL). This research focuses on exploring the relationship between significant green intellectual capital assets (namely green human capital, green relational capital, and green structural capital) and RL competency. The moderating role of regulatory measures was also hypothesized and tested.Design/methodology/approachA survey-based research instrument was employed to collect data and partial least square structural equation modeling (PLS-SEM) based approach was utilized to test hypotheses.FindingsThe results indicate that green relational capital and green structural capital are positively associated with RL competency. Interestingly, regulatory measures are also found only to moderate the relationship between green human capital and RL competency.Originality/valueThis study extends the present literature by enhancing the knowledge of RL competency, which is a critical ingredient of the circular economy, by revealing the relation with green intellectual capital. Additionally, this study offers insights into the manufacturing industry, especially in emerging economies for academics and practitioners.

Intellectual Capital and Shareholders’ Wealth. The Economic Value Added Approach

The role of intangible assets such as intellectual capital promoting corporate competitiveness and further shareholders’ value has attracted attention in the finance literature. This study investigated intellectual capital efficiency as a source of creating shareholders’ wealth in Nigeria. To achieve the study's aim, correlational research design was adopted. The study’s data were collected from content analysis of financial statements of listed service companies in Nigeria. The sample used in this study includes 17 service firms listed on the Nigeria Exchange Group from 2011 to 2022. The VAIC model was utilized to estimate intellectual capital. Descriptive statistics were conducted while some diagnostic tests were piloted before the regression analysis. The random effect regression model was used to verify whether the studied variables impact shareholders’ wealth of listed service companies in Nigeria. Findings indicated that value added intellectual coefficient as a measure of intellectual capital has a significant positive association with shareholders’ wealth. Results further revealed that human capital efficiency, relational capital efficiency and capital employed efficiency (as components of intellectual capital) are significantly and positively associated with shareholders’ wealth while structural capital efficiency has a positive but not significant relationship with shareholders’ wealth creation. The study concludes that efficient management of intellectual capital can enhance shareholders’ wealth in listed service companies in Nigeria and recommends amongst others that firms should make strategic plans regarding intellectual capital and intangible assets as it can increase corporate competitive advantage.

Capital assets and poverty transitions in rural China

PurposeThis article aims to examine the role of capital assets in rural household poverty transitions of poverty escape and poverty descent over periods of 2014–2016 and 2016–2018.Design/methodology/approachBased on the sustainable livelihood approach, this paper uses binary logit model to explore the influence of multidimensional capital assets on poverty transitions and use instrumental variable estimation to solve the endogeneity between total net asset and poverty transitions.FindingsCapital assets have significant impacts on household poverty transitions. The role of capital assets in households' poverty escape and poverty descent are not symmetrical. The authors verify that rural households with rich total net asset are more likely to escape poverty and less likely to descend into poverty by using instrumental variable estimation. The authors verify that there is a mediation effect that total net asset can help households' escaping poverty and prevent them from falling into poverty through promoting rural households to engage in business activities.Originality/valueThis paper is the first to explore how capital assets affect poverty transitions in rural China based on the sustainable livelihood approach. The findings of this research can provide valuable policy implications for the pursuit of common prosperity in China and references for other developing countries.

Wealth Taxes on Individuals: An International Comparative Study

Citizens contribute to the economy by creating wealth for themselves and in the way they use their assets. How assets, especially capital assets, are employed attracts tax and this influences how assets are used. In South Africa, tax policy is one of the drivers in the decisions that individuals make regarding the use or disposal of their assets. Wealth taxes are levied to address income disparities and mostly affect capital assets when they change ownership. This study compares developed and developing countries’ tax policies that impact capital assets when they are transferred or disposed of. The financial impact from using one’s assets drives economic participation. Previous studies found that tax policy is influential in economic participation. A literature study was performed analysing wealth taxes, academic literature and legislation and incorporated a case study to illustrate the tax consequences of capital assets changing ownership in Namibia, South Africa, India and Australia. The study found that, compared to the other countries, South Africa taxes capital transfer both upon change of ownership by way of sale, donation and death of the owner. This study makes a novel contribution to the understanding of and development of improved and internationally comparable wealth tax legislation to address the wealth tax consequences of asset transactions in South Africa.

Avoiding investment in fossil fuel assets

AbstractReducing greenhouse gas emissions requires a transformation of capital assets in the economy, especially those for energy supply. This paper explores the hypothesis that economically efficient decarbonization occurs when the demand for fossil fuels declines at the same rate as their capital assets depreciate. In theory this means that new investments in fossil fuel assets are avoided, but without incurring stranded assets. We examine the practicality of this hypothesis using a biophysical economic model of the US energy supply system, with an example focused on impacts of electric vehicles on the petroleum supply chain. We specifically address two questions: (1) What rate of market penetration for electric vehicles is necessary to avoid investments in the petroleum‐related assets? (2) How do the costs of upstream capital assets change with the transformation to electric vehicles? High annual depreciation rates for oil refineries (δ = 9.47%) and assets for crude oil extraction (δ = 8.23%) have important impacts on results. To avoid new investment in oil refining assets through widespread electrification of light‐duty vehicles, the vehicle stock would need to be transformed in just 4 or 5 years. Under most scenarios, some petroleum pipelines will likely become stranded assets due to their low rate of depreciation (δ = 2.48%). In some scenarios, additional investments in wind and solar power generation surpass oil and gas extraction for about 5 years during the transformation to electric vehicles. Once built, however, wind and solar capital assets last longer, as shown by their low rate of depreciation (δ = 3.26%).

Sentiment Analysis on Islamic Stock Exchange During Covid-19

During the ongoing COVID-19 pandemic in Indonesia, the financial services sector is still maintained. One of the indicators is the market capitalization value of the Islamic stock market. Based on The Financial Services Authority (OJK) data, in October 2020, the market capitalization value of sharia shares reached IDR 3.061 trillion (51.4%) from the existing IDR 5.957 trillion. The Islamic capital market that continues to develop is an essential component in the national and global financial system. This is evident from the continued capital market assets from year to year. This study aims to determine sentiment towards the Islamic Stock Exchange in the last three years, from 2020 to 2022. There has not been sentiment research on this theme based on the existing literature. The method used is a description of the analysis in a meta-analysis and sentiment from secondary data in metadata from 154 Dimension.ai indexed articles, then processed using Microsoft Excel 2019 and SentiStrength software. The sentiment analysis results show that the expert opinion about Islamic Stock Exchange has a neutral sentiment of 39.6%, a good sentiment (positive) of 37.0%, and the rest have a bad sentiment (negative) of 23.4%. Based on the study results, it was found that the Islamic Stock Exchange trend in the Islamic capital market continues to increase and shows positive performance in economic recovery due to the impact of the COVID-19 pandemic.

Merger Bank Syariah BUMN: Strategi Peningkatan Pangsa Pasar Keuangan Syariah

The market share of Islamic finance in Indonesia is currently still low, in stark contrast to the condition of the Muslim majority in Indonesia with the largest number in the world. As an effort to increase the market share of Islamic finance in Indonesia, the government through the Ministry of BUMN made a breakthrough by merging three state-owned Islamic banks namely BNI Syariah, BRI Syariah and Bank Syariah Mandiri into Bank Syariah Indonesia in order to expand the Islamic banking market which is the locomotive driving economic development. sharia in Indonesia. This study aims to analyze the role of the merger of state-owned Islamic banks in increasing the share of the Islamic financial market in Indonesia through a qualitative approach with a type of library research that focuses on collecting secondary data in the form of books, research results, news, magazines, journals, and other references. Based on the results of the study, the merger strategy in state-owned Islamic banks seeks to increase the share of the Islamic financial market through various advantages possessed by Bank Syariah Indonesia, among others: first, the system and work professionalism supported by the system, technological sophistication and qualified service features so as to provide various conveniences in financial transactions. Second, the amount of capital assets accompanied by various product innovations resulting in high sharia-based funding, stable liabilities and impressive profitability. Third, the superiority of local and regional understanding that is able to reach various economic sectors in society.

Are overconfident CEOs better able to transform innovation into firm value?—Evidence from the United States

AbstractWe use innovation premium (IP), proposed by Forbes, as a proxy for firm innovation to present evidence that firm value is positively associated with IP. The positive impact of the IP on firm value is amplified by overconfident CEOs, particularly in the high‐tech and biotech industries with a high proportion of intellectual capital and intangible assets. In a series of tests, we confirm that the results hold after controlling for endogeneity. our findings are consistent with the notion that the beneficial effect of corporate innovations generated by overconfident CEOs exists primarily in industries where innovations are in critical demand.

Farm Resources Utilization on the Integrated System of Bali Cattle-Palm Oil

A study on cattle-oil palm integrated farms aimed to identify the level of utilization of farmer resources, and the technical efficiency at the individual level compared to its best potential achievement (frontier production). Observations were conducted on 152 farmers in four sub-districts in Paser Regency, East Borneo. They were randomly selected in two stages: (1) choosing a farmer group, and (2) choosing farmers from the selected group. Model the causal relationship between resource utilization and output of mixed farming using the Cobb-Douglas equation. Regression analysis was used to estimate the degree of technical efficiency ratio using the stochastic frontier analysis. The results of the analysis showed that farm cattle production was at a constant return to scale, meaning that a doubling of the farm outputs was obtained from doubling the resources used. The number of cattle ownership and labor are two factors that significantly increase farm output. As much as 46.7 percent of farmers achieve the first and second grades of technical efficiency with an efficiency index range is 0.7-0.9. The rest or 53,3 percent have an index range of below 0.7. This means that there is still a large chance for this sector to use resources more efficiently. Cattle are reproducible and transferable capital assets, it is relatively practical and affordable for farmers to provide them. While the productivity of oil palm plantations decreases due to aging, the addition of livestock assets can be relied upon to strengthen farmers' livelihood and income.

THE POLICY OF STUDENT PROFILING AND ITS IMPACT ON THE DEVELOPMENT OF THE SECONDARY VOCATIONAL EDUCATION SYSTEM

Aim. To evaluate the effectiveness of the student profiling policy in the context of its impact on the development of secondary vocational education and the entire system of reproduction of human capital assets in Russia. Methodology. Based on the data of empirical (both qualitative and quantitative) studies conducted both in Russia and in other countries, the analysis of the student profiling policy impact on such indicators as equal access to education and the popularity of secondary vocational education was carried out. Results. It is shown that the system of secondary vocational education, being one of the mechanisms and at the same time the resultant effects of the educational policy of student profiling, serves as a system that contributes to the encapsulation of a number of social problems, in particular, inequality of opportunities. It is demonstrated that the policy of student profiling leads to the separation of the secondary vocational education system, which is perceived by the public opinion of Russia as an unattractive educational trajectory. The conclusion is made about the need to revise the basic imperatives of the student profiling policy. Research implications. The assumption is substantiated that in order to correct the negative effects of student profiling, educational policy can be reoriented to revise its ideological and organizational foundations. From the authors' point of view, changing the basic imperatives of the student profiling policy while maintaining its general orientation will contribute to the realization of Russia's national interests in the field of education.

Environmental footprint of Hollywood film industry: myths vs facts.

This paper discusses the impact of film industry on CO2 emission of the USA by using four different single-equation cointegration methods, namely, fully modified least squares (FMOLS), dynamic least squares (DOLS), canonical cointegrating regression (CCR), and autoregressive distributed lag (ARDL) to check the robustness of the results. The data has chosen in line with the environment Kuznets curves (EKC) and pollution haven hypothesis, and the models use communication equipment in millions of dollars and capital in entertainment, literacy, and artistic originals as determinants of motion picture and sound recording industries with other control variables such as income per capita and energy use to examine their nexus. Moreover, we also employ the Granger causality test to determine whether one variable is a predictor of another. The results approve the validity of EKC hypotheses for the USA. As expected, increase in energy use and capital assets results in rise in CO2 emission, while communication equipment improves the environmental quality.

Allocating capital-associated CO2 emissions along the full lifespan of capital investments helps diffuse emission responsibility

Capital assets such as machinery and infrastructure contribute substantially to CO2 emissions over their lifetime. Unique features of capital assets such as their long durability complicate the assignment of capital-associated CO2 emissions to final beneficiaries. Whereas conventional approaches allocate emissions required to produce capital assets to the year of formation, we propose an alternative perspective through allocating required emissions from the production of assets over their entire lifespans. We show that allocating CO2 emissions embodied in capital assets over time relieves emission responsibility for the year of formation, with 25‒46% reductions from conventional emission accounts. This temporal allocation, although virtual, is important for assessing the equity of CO2 emissions across generations due to the inertia of capital assets. To re-allocate emission responsibilities to the future, we design three capital investment scenarios with different investment purposes until 2030. Overall, the existing capital in 2017 will still carry approximately 10% responsibilities of China’s CO2 emissions in 2030, and could reach more than 40% for capital-intensive service sectors.

Managing decline: Devaluation and just transition at Diablo Canyon nuclear power plant

This paper examines the shifting fortunes of the Diablo Canyon Nuclear Power Plant in California to better understand how asset owners are dealing with an increasingly-significant problem in changing energy landscapes: the devaluation of large fixed capital assets. In 2016, Pacific Gas and Electric Company announced a Joint Proposal to retire the Diablo Canyon plant by 2025, the result of a negotiated compromise with labor unions, environmental and community groups. Heralded by many commentators as a model for “just transitions” in the energy sector, this agreement has lately been called into question as new subsidies and political coalitions have emerged to support for the plant's continued operation. This paper investigates the political and economic conditions for the Joint Proposal as an example of “negotiated devaluation,” aiming to understand why and how this strategy took shape, and what lessons it offers for other transition processes. Linking literatures on just transitions and devaluation in the energy sector, we show how negotiated devaluation may offer an emerging strategy for owners of energy assets to manage decline in a changing energy landscape. The case also demonstrates the political contingency of these coalitions and the transitions they subtend, and the limited dimensions of justice that might be affirmed in them.

Assessing the impact of COVID‐19 and related interventions on poverty and economic growth in Pakistan: A structural path analysis

AbstractThis study uses social accounting matrix multipliers and structural path analyses to estimate effects of COVID‐19 and related fiscal stimuli on five household groups. The COVID‐19 lockdown increased poverty in Pakistan by 15%, which was addressed using a $1.5 billion, digitally implemented Ehsaas Emergency Cash (EEC) program that reached 14.8 million poor households. The study's models show that the largest multipliers from Ehsaas program finance were in agriculture, as a 1 Rupee shock adds 0.225 Rupee income to households. About 30% of that gain was estimated to go to poor farm families. In contrast, our models find that construction and trade growth added three times as much income to poor nonfarm and urban households as to farm households. However, those sectors added only one third as much total income as agriculture. From the structural path analysis, the importance of capital assets in generating income was seen, as was the possibility of greater poverty reduction from sectors with proportionally fewer intermediate inputs and more value added.

Use of a Sustainable Livelihood Framework-Based Measure to Estimate Socioeconomic Impact of Tuberculosis on Households.

Tuberculosis (TB) disproportionally affects impoverished members of society. The adverse socioeconomic impact of TB on households is mostly measured using money-centric approaches, which have been criticized as one-dimensional and risk either overestimating or underestimating the true socioeconomic impacts of TB. We propose the use of the sustainable livelihood framework, which includes 5 household capital assets (human, financial, physical, natural, and social) and conceptualizes that households employ accumulative strategies in times of plenty and coping (survival) strategies in response to shocks such as TB. The proposed measure ascertains to what extent the 5 capital assets are available to households affected by TB as well as the coping costs (reversible and nonreversible) that are incurred by households at different time points (intensive, continuation, and post-TB treatment phase). We assert that our approach is holistic and multidimensional and draws attention to multisectoral responses to mitigate the socioeconomic impact of TB on households.

Impacts of small-scale irrigation on farmers' livelihood: Evidence from the drought prone areas of upper Awash sub-basin, Ethiopia

Irrigation is an important mechanism to mitigate risks associated with the variability in rainfall for the smallholder subsistence farming system. This study analyzed how practicing small-scale irrigation (SSI) impacts the key livelihood assets on farm households' human, physical, natural, financial, and social capitals in Ethiopia's upper Awash sub-basin. The household-level survey data, collected from the 396 sample households, was used to carry out the current study. A Propensity Score Matching (PSM) analytical model was applied to match the SSI user and non-user groups. The difference between the five capital assets of livelihood was estimated using the PSM's Nearest Neighbor, Radius, Kernel Mahalanobis, and Stratification matching criteria. The results indicated that farmers' participation in SSI has enhanced the capital assets of the farm households. Compared to the non-users, the irrigation users were better off in the number variety of food consumed (0.28 ± 0.13 Standard Error [SE]), types of crops produced (0.60 ± 0.17 SE), expenditures on land renting, and agricultural inputs (3118 ± 877 SE) measured in Ethiopian Birr (ETB), as well as on-farm (9024 ± 2267 SE ETB) and non-farm (3766 ± 1466 SE ETB) incomes. Challenges such as the involvement of local brokers in the market value chain and the absence of farmers' marketing cooperatives have reduced the benefit of irrigated agriculture. Hence, the expansion of SSI schemes for the non-user farmers should consider improving the water usage mechanism and productivity, establishing proper water allocation institutions between up and down streams and limiting the role of brokers in the irrigation product marketing chain be future policy directions.

Aiming towards creative city: how Surakarta City government applied the Sustainability-Oriented Innovation (SOI) as a strategy to empower local small and medium creative industries

Sustainability-oriented innovations (SOI), defines as an integration of ecological and social aspects into products, processes, and organizational structures of economic activities. For Small-Medium Scaled Enterprises (SMEs), which engage in small scaled products and limited capital assets as well as human resources capacity, the aim of achieving sustainability becomes a great challenge. According to many cases, SMEs have been only reached the co-production level of sustainability. In this regard, interactions with external actor, such as the government institutions, larger private sectors, and other SMEs are one of the keys of SMEs in attaining sustainability. The role of the government in exhalating SMEs as a part of creative economy environment in the city is important. The government set the creative city vision and then synergizes the SMEs, especially those engaged in creative industries, into the broader organizational structure in the city development. The government also empowers the main actors of SMEs both in techniques, managerial, and financial capacities. The research aims at learning towards the Government-led Sustainability-oriented Innovation strategies in SMEs as a means of promoting the creative city image of Surakarta. Our research was supplemented by interviews and FGDs to explore relevant data and information. The findings revealed that the SOI strategies provided by the city government to empower SMEs to help the achievement of creative city image in Surakarta were undertaken through the introduction of advance information and communication technologies, capacity building to improve community networking, capital accessibility, and product standards and certifications.

Addendum: The imputed effects of US tariffs on wages

This addendum to a recent paper in this journal finding no imputed effect of US tariffs on the average wage separates the skilled wage based on a college degree. The imputed effect attributes all variation in the price of import competing goods to tariffs. Second order error correction estimates based on a factor proportions model with annual data from 1983 to 2019 prove reliable with fixed capital assets imbedding technological progress. Tariffs lower the skilled wage but have no effect on the “unskilled” wage. The implication in the factor proportions model is that tariffs raise the capital return.

Green technology policies versus carbon pricing: An intergenerational perspective

Technology policy is the most widespread form of climate policy and is often preferred over seemingly efficient carbon pricing. We propose a new explanation for this observation: gains that predominantly accrue to households with large capital assets and that influence majority decisions in favor of technology policy. We study climate policy choices in an overlapping generations model with heterogeneous energy technologies and distortionary income taxation. Compared to carbon pricing, green technology policy leads to a pronounced capital subsidy effect that benefits most of the current generations but burdens future generations. Based on majority voting which disregards future generations, green technology policies are favored over a carbon tax. Smart “polluter-pays” financing of green technology policies enables obtaining the support of current generations while realizing efficiency gains for future generations.

Modelling economic risk to sea‐level rise and storms at the coastal margin

AbstractWe develop a methodological approach through integrated assessment using System Dynamics modelling and Scenario Planning to investigate the economic vulnerability of coastal communities to the compounding impacts of sea‐level rise (SLR) and storm flooding and inundation associated with climate change. The approach uses a coastal flood risk assessment that quantifies physical drivers alongside socio‐economic well‐being for coastal communities to provide a methodology for managing uncertain futures through causal relationships in System Dynamics. A New Zealand case study is used to illustrate the long‐term economic impacts of inaction under different SLR projections and recognise critical tolerance thresholds to help exposed property owners plan their future. Modelling scenarios using this integrated approach identified two stand‐out drivers that influence a behavioural response of communities to coastal inundation at the local scale: first, the ongoing likelihood of risk transfer to the insurance industry, and second, the decisions of households and firms to accept risk for the added value of coastal living. Model outputs suggest that the threat posed by coastal hazards drives a behavioural, socio‐economic response that exceeds the initial economic exposure of capital assets. In the economic short term (1–10 years) and medium term (10–20 years), vulnerable communities accept the risk of capital loss and loss of insurability, favouring the amenity of coastal living. However, in the long term (+20 years), economic losses from repeat flooding increase risk‐based insurance premiums, promote insurance withdrawal and drive negative corrections in property valuations. Unanticipated insights were obtained from the modelling, including the likely timing of tolerance thresholds, particularly the insurance withdrawal point, which is critical to insurer/consumer decision‐making and community planning.