Capital Assets Research Articles

Intellectual capital and non-performing assets: the role of knowledge assets in improving credit quality of Indian banking sector

Purpose Intellectual capital (IC) is beneficial to the improved performance of businesses, irrespective of their industry. The present study proposes to check if the use of IC can also help in improving the asset quality of banks. Thus, this study aims to examine the impact of IC and its components on non-performing assets (NPAs). Design/methodology/approach The study has been conducted with a sample of 30 Indian commercial banks and analysed over a time frame of 15 years (2004–2005 to 2018–2019). The modified value-added intellectual coefficient model has been used to measure the independent variables, IC, and its components. The dependent variable, NPA, has been represented by the net NPA ratio. Two-step system generalized methods of moments (SGMMs) have been applied for the regression analysis. Along with the short-term estimates provided by the SGMM approach, the long-term impact of explanatory variables on the dependent variables has also been seen. Findings The results of the study show that IC and its components are indeed helpful for the management of NPA, as they impact the problem loans negatively. Furthermore, the long-term benefits of IC in enhancing bank credit quality are more substantial. Practical implications The results from the present study can be used by bank management. The bank managers can draw inferences that the efficient application of IC can help them reduce their loan losses. Developing skills and knowledge of employees, maintaining close relations with stakeholders, significantly the customers, and putting more sophisticated processes and infrastructure to use can help banks to control their loan losses. Originality/value A major proportion of studies examining the role of intangible assets in various aspects of the banking sector focuses on the association between IC and the financial performance of banking entities. However, for banking institutions, apart from financial performance, improving credit quality is also imperative for staying afloat. Thus, to the best of the authors’ knowledge, the present study is one of the first to examine the relationship between knowledge-based assets (i.e. IC) and bank credit quality.

Railway freight wagon fleet size optimization: A real-world application

Railway freight wagons have a significant share in the total capital assets of a railway freight company. Due to this fact, the main objective of every company is to maximize the utilization of these resources and on that way minimize its size. In this paper we consider a real-world freight wagon fleet management problem and propose a decomposition approach for optimization of the heterogeneous fleet of flat wagons. The approach has four steps: random container weight generation, optimal container to wagon assignment, empty wagon repositioning and optimal wagon fleet sizing. For the purpose of validation, real-life experiments were conducted based on a rail network composed of 911 origin-destination links and the yearly demand of more than 3 × 106 empty and loaded 20-foot and 40-foot containers. Experimental results show that proposed approach has a practical applicability and that in comparison with existing experience-based practice it represents a significant improvement for the flat wagon fleet management.

Social Capital and Well-Being of Small-Scale Fishers in the West Coast Island of Peninsular Malaysia

Poverty in small-scale fisheries is a global issue; most of the time, the solution to poverty is discussed through economic variables. Scholars highlight the contribution of social capital factors to the livelihoods of small-scale fishing communities and suggest that social aspects can be used as an alternative solution to reduce poverty. The concept of social capital has been extensively used to explain the relationship between social capital factors and wellbeing. The role of social capital in the well-being of small-scale fisher communities in Malaysia needs to be clarified. The current study investigates the contribution of various livelihood assets to the household income of small-scale fishers in Malaysia. Data for the survey were collected from 182 respondents from across multiple fishing villages on Langkawi Island, off the west coast of Peninsular Malaysia, using a structured questionnaire. The partial least square (PLS) technique was applied for statistical analysis. The study’s empirical findings depict that social capital, trust, job experience, and financial capital are important factors contributing to fishers' household income. The results show that the contribution of social capital and trust factors are significant to household income, indicating that social factors are essential in improving the well-being of small-scale fisher households in Malaysia. Policy for livelihood improvement of small-scale fisheries in Malaysia needs to prioritise investments in financial, human, natural and physical capital assets.

Інтеграційні процеси у системі ринку морської торгівлі

The article deals with the integration processes that take place in the maritime trade market system. The aim of the article is to focus attention on choosing the methods for assessing the real state of the sea transport subsystem. The maritime trade market actually functions outside of national legal aspects. At the same time, it is the national capital assets that reflect the technical and economic level of vessels of a certain nationality that form entrepreneurial and macroeconomic efficiency. Thus, it has been established that in the system of any market relations for each industry, oriented to the stability of demand, it should be considered natural to differentiate the enterprises development in order to maintain a position according to the factors of innovative technologies.

The Impact of Factors in Capital Assets Pricing Model and Fama-French Models

Despite the fact that other researchers have looked into hundreds of potential factors that could affect equity returns, Fama and French initially proposed three and have since allowed for five, with the sporadic appearance of a sixth factor. By using regression which is a statistical technique that is used to isolate and quantify the significance of a variable. It works as a test to ascertain whether a stock's average returns may be influenced by factors like leverage or sector performance. This study uses R programming language and the “lm” function to research the impacts of factors in CAPM and different factors of Fama-French Models. To conclude, more factors included in the Fama-French model are not better than those with fewer factors, and there is a multicollinearity problem for different portfolios. This study aims to help other researchers have a brief consideration before using the model.

‘Love is tricky to capture at this level’: social care values, performance measurement, and the emergence of ‘ethical capital’

Professional ethics and values in social care have frequently been described as a site of active resistance against the incursion of neoliberal managerialism in social services. More recently, however, this view has been challenged by an emerging discourse that explicitly treats organisational values as measurable capital assets, exemplified in a growing literature around the concept of ‘ethical capital’. Drawing on data from an ethnographic study on ethics and values within the social care sector in the UK, this article argues that, in practice, the notion of treating values as quantifiable and measurable capital is a consequence of the necessity for organisations to capitalise every part of themselves in order to survive in an increasingly competitive funding market. However, instrumentalising professional ethics in the interest of market competition threatens to undermine its critical potential and to make any part of it that resists subsumption under market logic unintelligible within bureaucratic regimes of performance management.

Pengaruh Jumlah Anggota, Modal Luar, Volume Usaha, dan Total Aset terhadap Pendapatan Sisa Hasil Usaha Koperasi di Provinsi Bali Tahun 2015-2020

<em>Cooperatives can play a role as one of the main forces in encouraging national economic growth. One of the indicators in improving the welfare of members can be proven by the increase in SHU. This study aims to examine how the independent variables (number of members, external capital, business volume, and total assets) can affect the dependent variable (SHU) in all cooperatives in Bali Province. The approach in this study is a quantitative approach with a verification method using panel data regression analysis. This study uses secondary data with time series 2015-2020 and a cross-section of 9 districts/cities sourced from the publications of the Bali Province Cooperatives and UMKM Office. It’s known that the results of this study when proven simultaneously, that the external capital variable, business volume variable, and total asset variable have a significant influence on the SHU variable. Partially it’s known that the variable number of members has no influence and is negatively related to the SHU variable, there is a significant influence between external capital and the SHU variable but is negatively related, the business volume variable has a significant and positive relationship to the SHU variable, and the total assets variable has an influence as well significantly related to the SHU variable.</em>

Assessing the adaptive capacity of smallholder cocoa farmers to climate variability in the Adansi South District of the Ashanti Region, Ghana

This study assessed the adaptive capacity of smallholder cocoa farmers to address the adverse effects of climate variability in the Adansi South District of the Ashanti Region, Ghana. Specifically, the study sought to (i) assess the perception of the smallholder cocoa farmers to climate variability; (ii) determine the perceived effects of climate variability on cocoa production in the district; and; (iii) evaluate the adaptive capacity of the smallholder cocoa farmers to manage climate risks. The study used questionnaire surveys with 150 smallholder cocoa farmers, key informant interviews, and focus group discussions in three selected communities (Afiaso, Tonkoase, and Amudurase). A variety of capital assets (social, financial, human, physical, and natural) were utilized to conceptualize smallholder cocoa farmers’ adaptive capacity. Results showed that the smallholder cocoa farmers reported changes in the onset and duration of rains, rising temperatures, and increasing windstorms in the selected communities. The farmers perceived increased incidence of drought and cocoa failure, the prevalence of diseases and pest invasion, and decreased farmer income as the key adverse effects on their cocoa production. Further, findings also revealed that cumulatively, all the selected communities in Adansi South District had a moderate adaptive capacity (0.531). It is recommended that appropriate policies aimed at enhancing the adaptive capacity of smallholder cocoa farmers must be formulated by policymakers to minimize their vulnerabilities to climate risks.

Empirical justification of the cost of equity of domestic companies according to the "Capital Assets Pricing Model"

The subject of the study is the values of the Capital Assets Pricing Model (CAPM) components required to calculate the required return (cost) equity capital of public and non-public resident companies of the Russian Federation operating in the system of the national economy of the Russian Federation. The calculations of the 5-year and 2-year bet have been performed for all companies related to the domestic stock market. The values of these betas and their statistical characteristics are given. The value of the risk premium of a public company of small capitalization (small capitalization premium, SCP) is justified. A model of accounting for the risk premium of an average (or small) small non-public company and the value of this premium is proposed. The value of the market risk premium is empirically justified.

Path Dependence, Community Resilience, and Social Responses to the Implementation of Collaborative Forest Management in Ghana

The concept of community resilience has been receiving attention in recent decades as a framework for understanding the capacity of communities to respond to drivers of change while maintaining or enhancing their well-being. However, the process of community response to drivers of change and the factors influencing the change process remain poorly understood. In this study, the community resilience literature was applied in the analysis of community responses to the implementation of collaborative forest management (CFM) in Ghana. Qualitative data were generated from two forest-dependent communities in the Ashanti region of Ghana using key informant interviews and the review of documents. The results highlighted the role of drivers of change, institutions, capital assets, and arenas for interaction in shaping the awareness and motivation, as well as access to resources and opportunities for collective action in both communities. Importantly, community history and context helped explain differences in the responses of the two communities to the implementation of the CFM program. These findings highlight the need for greater recognition of path dependence and other attributes of complexity in resource-dependent communities in order to inform policies that contribute to enhancing community resilience.

Application of Deep Learning Method to Capital Assets Pricing

The key problem of financial assets allocation is the price of assets. Assets pricing is the core content of Modern Finance, and revealing the law of assets pricing is always a hot spot of finance research. In recent years, deep learning technology has been applied in the research process of assets pricing and achieved good effect. This paper introduced the theory and characteristics of deep learning, started from extracting and utilizing nonlinear information, effectively processing time series data, and intellectual prediction model, and explored the application of deep learning method in the capital assets pricing. Meanwhile, this paper explores the applicability and limitations of deep learning methods and discusses possible future research trends in learning-based asset pricing.

Analysis Of Promotion And Marketing Strategies In The Global Market

Small, micro and medium business competition continues to increase, so efforts are needed. so that MSMEs can maintain the continuity of their business in facing the global market era of the ASEAN Economic Community (AEC). One of the efforts is to improve the strategy that has the lowest risk of failure known as the go-to-market strategy. Globalization is another test for companies when implementing advertising methods. Due to globalization, organizations have to compete with organizations that have large capital and quality assets. So far, Indonesia has become a competitive target market. Globalization and market competition require all executives to focus on the global climate. Advertising is something every business should do. The most important thing in advertising is conveying effective and persuasive messages that attract consumers' attention. This article aims to study advertising and marketing strategies in the global market. This research method uses qualitative methods. The strength of global trade unions in the Indonesian market lies in their ability to develop global marketing strategies adapted to the Indonesian market.

A convolutional neural network (CNN)‐based direct method to detect stiction in control valves

AbstractControl valves are considered important capital assets in any process industry. A properly maintained control valve can have a significant impact on how well the process is controlled as well as the overall cost of the plant. However, control valves can suffer from poor control performance due to valve non‐linearities. One of the main reasons for non‐linearity is control valve stiction. Stiction not only causes oscillations in the process variables but also shortens the life of the control valve, resulting in an economic loss for the process. In a process plant, a control engineer generally analyzes the time series plot of process value (PV), set point (SP), and controller output (OP) data and identifies stiction based on the typical shape pattern of PV/SP/OP plot. In this study, the same shape pattern methodology is adapted to identify stiction using convolutional neural network (CNN) technique. A one‐dimensional convolution neural network (Conv1D) algorithm is developed, which works directly on PV/SP/OP time series data for stiction detection. The proposed CNN algorithm is tested on both simulated and industrial control loop data. The suggested method provides promising results with a combined stiction prediction accuracy of 92% (92.2% in predicting non‐sticky and 91.53% in predicting sticky loops) for the industrial loops data studied.

Applying Benford's law to detect accounting data manipulation in the pre- and post-financial engineering periods

PurposeLebanon has faced one of the most severe financial and economic crises since the end of 2019. The practices of the Lebanese banks are blamed for dangerously exposing economic agents and precipitating the current financial collapse. This paper examines the patterns of manipulation of the 10 biggest banks before and after implementing the financial engineering mechanism.Design/methodology/approachThe authors apply Benford law for the first and second positions of the reports of condition and income and four out of the six aspects of the CAMELS rating system (Capital Adequacy, Assets Quality, Management expertise, Earnings Strength, Liquidity and Sensitivity to the market) by excluding Management and Sensitivity. The deviations from BL frequencies are tested using Z-statistic and Chi-square tests.FindingsBanks seem to have manipulated their Capital Adequacy, Liquidity and Assets Quality in the pre-financial engineering and considerably in the post-financial engineering periods. Fraudulent manipulations in the banking sector can distort depositors, shareholders and regulating authorities.Research limitations/implicationsThis study has many implications for governmental authorities, commercial banks, depositors, businesses, accounting and auditing firms, and policymakers. The Lebanese government needs to implement corrective fiscal and monetary policies and apply amendments to the bank secrecy and capital control law. The central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Practical implicationsThe study findings suggest that the central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Originality/valueThe study is the first to examine the patterns of fraudulent manipulation in the Lebanese banking industry using Benford Law (BL).

Does Idiosyncratic Risk Affect Earnings Quality? Evidence from Indonesia

This study examines whether idiosyncratic risk significantly affects earnings quality in non-financial companies listed on the Indonesia Stock Exchange. Research on developing countries, especially Indonesia, which links idiosyncratic risk and earnings quality, has not been widely conducted. This is interesting because the characteristics of the markets in developing countries are different from those in developed countries. This study uses the dependent variable of earnings quality, which is the residual value of the Kasznik and Dechow–Dichev model, and idiosyncratic risk, which is measured based on the Capital Assets Pricing and Fama–French models. The overall results indicate that high idiosyncratic risk is associated with low earnings quality (large residual value). Robustness tests are also conducted based on groups of positive and negative profit companies, as well as industry groups. The same results were obtained for each earnings component, namely, innate and discretionary factors. These findings contribute to the development of firm-specific risk literature as an additional analytical tool to assess earnings quality based on accrual rates. This allows regulators and standard-setters to provide more relevant information regarding investment decisions.

СТРАХОВІ ФОНДИ ЯК ДЖЕРЕЛА ІНВЕСТУВАННЯ ЕКОНОМІКИ УКРАЇНИ

The article is devoted to the development of theoretical approaches and the improvement of practical tools for forming, the development and evaluation of the prospects for insurance investment in the economy of Ukraine. Among the main functions of insurance there is an investment function. It is noted that the additional investment function of insurance in the minds of the market mobilizes savings for the development of the national economy. It is stated that insurance reserves contain financial resources with various possibilities for investment recovery arising from the terms of contracts for various types of insurance, from long-term to shortterm. It is determined that to ensure the investment activity of an insurance company, the most important ones are life insurance reserves, which form a long-term basis. The important concept of insurance investment as the purpose of direct investment of insurance reserves, emergency reserves, and the power capital of insurance companies is defined in all forms in various objects and instruments such as and bring income through the withdrawal of profits and (or) the attainment of another beneficial effect. When examining the investment activities of insurance companies, two groups of problems were seen. The first group of problems is associated with the analysis of the investment potential of the Ukrainian insurance sector of the economy in line with various market economic models. Another group of problems is associated with the analysis of the results of investment activity in the insurance sector of the economy. As part of the investigation of the first group of problems, the relationship between insurance premiums and GDP in Ukraine and other countries was analyzed and it was determined that the level of insurance penetration in Ukraine is low. The indicators of the number of insurance companies and their assets were analyzed and it was determined that in Ukraine the trend towards a reduction in the number of insurers will continue. The basis for the investigation of another group of problems was the assessment of the investment activity of insurance companies from the position of investment of insurance reserves and capital assets of insurance organizations in investment instruments mentee. The structure of insurance assets in Ukraine has been analyzed and it has been determined that the structure of allocation of insurance reserves in investment assets is impossible to ensure high profitability. It has been determined that the investment funds that are currently being raised by insurance companies, with the placement of insurance reserves and capital assets, will not be directed directly to the stock market and investment programs that can reduce investment economy, and mainly refer to the banking sector of the economy. The opportunity to invest in the insurance sector of the economy has been restored, which will contribute to the development of the national economy.

Research on the Influencing Factors of Capital Asset Income ---- Is Based on the Fama-French Three-Factor Model

Capital asset pricing is very important to the development of listed companies. It is not only related to the performance of micro enterprises, but also related to the stability and development of macro financial markets. Therefore, the in-depth study of the law and influencing factors of listed companies’ return on capital assets is a theoretical problem worthy of in-depth exploration, but also has significant practical significance. In this paper, 160 stocks from 2012 to 2021 are selected for empirical analysis, and it is concluded that stocks of small-scale companies can realize good risk hedging as a hedge tool, and the trend of large-scale high-yield stocks conforms to the traditional capital asset pricing theory.

Improving the accounting and categorization of tools of agriculture in the conditions of economic modernization

The integration of a country into the global economy necessitates the production of products that conform to international standards. Achieving this requires the modernization of production processes, the introduction of new technologies, and the re-equipment of facilities. The data presented reveals that during the period of 2018-2022, JSC “GALLA-ALTEG” incurred significant expenses due to the write-off of fixed assets that were rendered unusable, which amounted to 25% of the total fixed assets. The joint-stock company also accumulated unused capital assets, which exceeded 1% of the total fixed assets. To address this issue, the company invested 74% of its main equipment budget to purchase and lease new equipment, replacing outdated machinery. Notably, in 2022, the company acquired a new grain processing technology, worth 9,770,353 thousand sums, resulting in increased production of high-quality, cost-effective products. This modernization has proven to be a wise investment, leading to a reduction of production costs by 15%.

The build-up approach. Could it be an alternative to the CAPM?

Background: The paper contains the economic background for implementing the build-up approach as an alternative method to the Capital Assets Pricing Model (CAPM).
 Research purpose: This study aims to consider company-specific risk premium that makes cost estimation unique, subjective, and different within the economic factors that may be considered and used for entity cost of equity estimation, valuation, or other economic metrics.
 Methods: The author analyzes the most recent literature on companies’ cost of equity and estimating specific risk premiums. Each component of the cost of capital in the build-up approach was analyzed and interpreted. The petroleum industry was analyzed between 2011 and 2021. The Mercer model for specific risk was used.
 Conclusions: The build-up approach seems the best choice to calculate equity costs in a turbulent economic environment. However, due to its mathematical structure, it could be criticized for the huge subjectivity in the assessment risk premium rate. The key to using this method is to make it less subjective. This paper suggests an approach that minimizes the subjectivity in the build-up model. So far, there is no comprehensive analysis of the Polish market that has been prepared from the perspective of the petroleum industry’s specific risk premium. This research creates possibilities for further comprehensive analysis related to models to calculate company risk premiums and the factors that affect them.

КЛАССИФИКАЦИЯ РИСКОВ, ВЫЗВАННЫХ ИЗМЕНЕНИЯМИ В СТРУКТУРЕ ПРИРОДНОГО КАПИТАЛА

Many aspects of our economic activity depend on natural capital. The ecosystems that underpin natural capital provide a wide range of ecosystem goods and services that are valued by people. In most cases, however, ecosystem services are "invisible" and not properly considered in decision-making processes, leading to an underestimation of environmental risks. Companies overexploit natural capital assets and ecosystems, at the heart of our natural environment. In most cases, the ecosystem services provided by nature are not adequately taken into account in decision-making processes, resulting in environmental degradation. Awareness of the damage caused by overuse of resources is growing, and there is a growing focus on how the risks associated with ecosystem degradation affect corporate sustainability. Companies don't always adequately consider how their supply chains, operations, and values Businesses depend on and influence natural capital. Corporate strategies for valuing natural capital may not take into account all the benefits and risks generated by the ecosystem because we cannot assume that we have all the information about all ecosystem service flows. The author describes the concept of risks associated with the exploitation of natural capital and describes the mechanisms for assessing the risks of natural capital.