Capital Companies Research Articles

FINANCIAL MARKET REACTION TO R&D VOLATILITY IN THE PHARMACEUTICAL INDUSTRY. A MULTI-COUNTRY STUDY

Corporate management is often accused of short-term oriented behaviour related to R&D expenditures. This study analyses the influence of R&D volatility and R&D intensity on the market capitalization of pharmaceutical and medical research companies from Europe, considering the institutional context and several firm characteristics. Panel regression estimations on a sample of 217 companies for 2014–2019 indicate that R&D volatility adversely affects market value. The analysis is conducted on the entire sample and on sub-samples determined based on the positive and negative values of the R&D volatility. This differentiates between the continuous and the disrupting effect of R&D activities and the firm’s shift between exploratory and exploitative innovations. The positive volatility sub-sample provides consistent evidence of a significant negative influence of the R&D volatility on the market value. For the negative volatility sub-sample, R&D intensity and its interaction with R&D volatility have a significant positive effect, consistent over the alternative estimations. We conclude that the market influence of the R&D expenditure is related to the sign of volatility and depends on the proportion of R&D expenditure, especially when the volatility is negative. Our findings provide valuable insights for managers, investors, analysts, and other stakeholders about the market reaction to R&D volatility.

Determination of Fundamental and Technical Factors on Share Prices in Large-Capitalized Companies Listed on the Indonesia Stock Exchange for the 2015-2019 Period

The share price is the value of shares in the capital market which is expressed in currency during buying and selling on the stock exchange. Many factors affect stock prices including fundamental factors such as ROE, PBV, EPS, and DPR and technical factors such as sales volume. This study is a quantitative study that aims to examine the effect of fundamental and technical factors on the stock prices of large capitalization companies listed on the IDX for the 2015-2019 period, where the data obtained is realized in the form of secondary data obtained from the company's financial statements. The research population is large capitalization companies listed on the Indonesia Stock Exchange from 2015-2019. Determination of the sample using the probability sample method with special criteria and obtained 16 companies for 5 years (2015-2019) so that there are 80 valid data issuers. The data collection instrument used the secondary data documentation method in the form of time series and data analysis using multiple linear regression. The results of the study prove that Return on Equity (ROE), Price to Book Value (PBV), Earning per Share (EPS), Dividend Payout Ratio (DPR) and trading volume simultaneously have a significant and positive effect on the dependent variable (stock price). This is indicated by the value of F-count (26.741) > F-table (2.25) and sig-p (0.000) < 0.05. Return on Equity (ROE) partially has a significant effect on stock prices. Price to Book Value (PBV) partially has a significant effect on stock prices. Earning per Share (EPS) partially has a significant effect on stock prices. The dividend Payout Ratio (DPR) partially has a significant effect on stock prices. Trading volume partially has a significant effect on stock prices. Investors are advised to obtain more extensive information about the fundamental and technical factors that affect stock prices so that investment decisions can provide better results. Keywords: Determination, Fundamental Factors, technical factors, the stock price

Innovation profile of services offered by Brazilian construction startups

Construction startups offer to optimize services in construction through innovation, by raising the levels of productivity and quality through new technologies or their application. In Brazil these companies are known as Construtechs or Proptechs, but publications provide no details on the type of innovations they offer in their services. Thus, this paper provides an innovation profile of services offered by Brazilian construction startups. To this end, a document and bibliographic review was conducted, where data was gathered initially based on a list published by a Brazilian venture capital company in 2020. This was then expanded by extracting information from the websites of 257 firms on the list. From the information available on 222 Construtechs, results shows that most of the companies offer organization and management services (36%), through digital platforms that improve the flow of information (75%) and innovate the way services are performed in the client companies, that is, the process (73%). In addition, it was identified that Brazilian Construtechs mostly offer services at the basic technological level and that only 33 companies (15%) are related to Construction 4.0. This paper provides a profile of Brazilian Construtechs and their service innovation opportunities, mainly associated with Construction 4.0.

Membership in capital companies as a form of exercising the profession of attorney-at-law

The article conducts a legal qualification of attorney’s-at-law professional activities performed for the benefit of capital companies conducting legal activities and their clients. It also considers the arguments for and against introducing the possibility of attorney’s-at-law legal practice in the form of participation in capital companies authorized to provide legal assistance. In conclusion, the author clearly advocates for the change of the currently binding prohibitions on attorney’s-at-law profession.

Conflict of Interest between Subjects of Corporate Legal Relations in Shares Transactions

Considering transactions in the authorized capital of a joint-stock company, it is necessary to differentiate them according to the degree of influence on the corporate legal status of the participant. We believe that transactions that give rise to a conflict of interest at its highest stage have a complex structure and are associated with the acquisition of corporate control. The presence of a large number of initially and subsequently interested parties in the process of transactions with shares, especially those affecting control in society, is in itself characterized by a certain universality, which, in turn, predetermines the need to consider the issue raised in a comprehensive and multifaceted way. The category of conflict of interest in the plane of joint-stock relations traditionally manifests itself in disagreements between majority and minority participants, which take various legal forms. Equity transactions, whatever forms they may take, certainly fulfill the most important task of optimizing and regulating the modern economic system. The paper defines legal approaches to conflicts of interest between subjects of corporate legal relations when conducting transactions with shares, identifies the most essential and urgent problems, and suggests ways to solve them.

Urgensi Nasionalisasi Penanaman Modal Asing oleh Pemerintah Republik Indonesia

The purpose of this study was to determine the urgency of the nationalization of foreign investment by the Government of the Republic of Indonesia. The legal research method used is normative legal research. The Government of the Republic of Indonesia is currently in a position to nationalize foreign capital companies by prioritizing the potential of the nation and state and not closing themselves on the entry of foreign capital for the sake of realizing economic growth. Foreign investment in the perspective of Law Number 25 of 2007 concerning Investment must prioritize the welfare of the Indonesian people by prioritizing the potential possessed by the nation and state without neglecting Indonesia's economic and political sovereignty. the nationalization carried out by Bolivia, Venezuela and Mexico can be used as a comparison and lesson for the Government of the Republic of Indonesia in nationalizing that the President, he uses his power to realize the will of the people in the aim of restoring economic and political sovereignty over its natural resources.

Technology Transfer from Nordic Capital Parenting Companies to Lithuanian and Estonian Subsidiaries or Joint Capital Companies: The Analysis of the Obtained Primary Data

Scientific literature describes various factors that influence knowledge transfer and successful adoption, assimilation, transformation, and exploitation. These four components are mostly related to the absorptive capacity of the company. However, more factors influence both developments of innovations or patents and the lack of ability to use external and internal information (knowledge). Using external knowledge is often associated with previous experience, or even a point of view towards investment in innovation or developing patents. Thus, the companies might be divided into innovators and imitators. The research addresses several problems (questions). What external factors are influencing knowledge transfer and further development of innovation? What factors are influencing absorptive capacity? What factors are essential in cooperation and knowledge transfer to switch from a linear to a circular economy? To collect data, a computer-assisted telephone interviewing method was used. The survey was addressed to subsidiaries, joint companies, Lithuanian-Nordic, Estonian-Nordic capital companies, or companies in close collaboration with the Nordic countries. A total of 158 companies from Estonia and Lithuania agreed to answer all the questions. The survey involves companies of various sizes and ages from different business sectors. Reliability was denoted, as Cronbach’s Alpha was estimated. The KMO test was used to measure whether the data were suitable for principal component analysis. Additionally, PCA was performed. PCA reduced the number of variables into an extracted number of components. The separate row of the component defined a linear composite of the component score that would be the expected value of the associated variable. The dataset may be used to develop interlinkages among the research mentioned above questions, and the results of introducing innovation, the company’s size, and age might be used as control variables. The article aims to analyze the factors that determine innovation development and their interlinkages while technology is transferred from Nordic parenting companies to the subsidiaries. The article’s results contribute to the interdisciplinary knowledge transfer, innovations, and internationalization field.

Implementation of corporate governance, family ownership, and family-aligned board: Evidence from Indonesia

This study aims to examine the impact of family ownership on the composition of the board of directors and the number of family-affiliated directors. In addition, it analyzes how it affects corporate governance. Big capital and middle capital companies among the top 50 IICD (Indonesia Institute for Corporate Directorship) awards issuers from 2017 to 2019 make up the study population. The sample consists of 57 middle capital companies and 72 big capital companies. The link between the variables is examined using multiple linear regression. Both the partial coefficient test and the model accuracy test were performed. First, the study findings indicate that family-owned businesses have a higher proportion of family-affiliated board members and commissioners on their boards in big capital and middle capital companies. Second, while family ownership has a favorable impact on middle capital companies, it has a negative and significant impact on the application of corporate governance in big capital firms. Third, since big capital companies exhibit different signals than middle capital companies, it can be inferred that the number of directors and commissioners who are members of the same family affects the adoption of good governance practices and, consequently, the development of sound policies to deal with challenging issues that may arise within a company. This study is innovative in that it divides the sample into big capital and middle capital companies.

The Role of Human Capital Investments in Business Excellence of Croatian Companies

The paper analyses human capital investments and their relation to company performance in Croatia. Human capital represents an inevitable element in recognising and measuring an organisation’s values and supporting its business excellence. The results obtained show that training and extra bonuses or salaries are positively correlated with company excellence, as well as show a significant difference in the mean of salaries per employee between high and moderate intensive intellectual capital companies. The differences in company excellence, when human capital expenditures are capitalized in a company’s balance sheet rather than recognized as expenses in the company’s profit and loss account, is confirmed. Companies should pay attention to managing human resources and realizing their importance for business excellence, as well as the importance of appropriate recognition and measurement of human capital in financial statements.

Effect of ESG performance on the cost of equity capital: Evidence from China

The purpose of this paper is to evaluate the influence of environmental protection, social responsibility and corporate governance (ESG) performance on the cost of equity (COE) capital of Chinese A-Share companies between 2010 and 2020. Benchmark analysis discovers that ESG performance can significantly reduce the cost of equity capital of listed companies, which is robust even when heteroscedasticity, sequence correlation and cross-section correlation are controlled, respectively, or simultaneously. Mediating effects are discovered that ESG can, not only directly, but also indirectly reduce the cost of equity capital by reducing the market risk of enterprises and the increasing of their equity diversification.

THEORETICAL APPROACHES TO RESEARCHING DIGITALIZATION PROCESSES IN THE GLOBAL ECONOMY

Digitization as a new tool for the transformation of socio-economic relations and a modern tool for sustainable development is characterized by a global spread throughout the world. The article presents certain theoretical approaches to digitalization research. In particular, theories of the information society, theories of economic cycles and theories of globalization – the theoretical and methodological foundation of digitalization research – are systematized. These theoretically substantiate the patterns of digitalization of the economy. In addition, it is found that digitalization is a practical rather than a merely theoretical tool for modernization of the economy that can solve economic problems (in our study, this is the Mandell-Fleming dilemma). The study results reveal the main trends of digitization, in particular in the financial sector. In our opinion, the global monetary and financial system is being significantly modernized and will be characterized by the use of cryptocurrencies and/or digital currencies of central banks in international settlements. This trend is confirmed by the dynamics of significant growth in the volume of crypto-assets in the world. The article additionally examines the peculiarities of digitalization in Ukraine, in particular the banking sector. It is established that the digitalization of the Ukrainian banking sector contradicts the global trends of banking fintech solutions, because Ukrainian banks consider digitalization not as an opportunity for development, but as a «parallel world». Currently, domestic banks have a low level of participation in the capital of fintech companies. We recommend further involvement of Ukraine in global economic relations based on digital transformation.

Analisis Sistem Informasi Akuntansi Penjualan Dan Pembelian Bahan Baku Pt Sagitarius


 Companies are the forerunner of economic activity. The development of the times makes every company must be more innovative and creative, one of which is in the use of technology. The accounting information system is the main foundation in every business process in order to present information on the company's financial statements. The company makes sales as the company's main goal in seeking profit. Sales is one of the company's business operations which is the core and becomes crucial information for the owners of the company's capital. PT Sagittarius is a company engaged in property and real estate that provides housing development services and is sold either in cash or on credit. Sales on credit are made through the bank, so PT Sagittarius will still receive cash from the bank that has been selected as the lender. In this case, there are several internal control systems on sales that need to be re-analyzed and provide recommendations. The sales accounting information system is the object of research to ascertain how effective and efficient the sales accounting system is for PT. Sagitarius.

ON JUDICIAL PRACTICE AND LEGAL PERFECTION WITH SIGNIFICANT INSUFFICIENCY OF CAPITAL

The revision of the Company Law in 2013 changed the capital system of Chinese companies from a paid-in system to a subscription-based system, realizing a major legislative adjustment, which provided a way out for many urban entrepreneurs who lacked funds, and promoted the development of the market economy. However, from a theoretical point of view, the oversimplification of the conditions for the establishment of a company poses a threat to transaction security. When the company's capital is insufficient to repay its debts, it lacks corresponding protection for the interests of creditors. From the aspect of the judicial practice of company law, there is a certain conflict between encouraging entrepreneurship and protecting the interests of company creditors. Aiming at dealing with challenges of theory and practice, this paper uses empirical analysis to discuss how to effectively protect the interests of corporate creditors from the perspective of corporate legal personality protection, especially the application and improvement of "significant insufficient capital". This article is based on the fifty cases, including judgment of the lower courts and high court, and analytical methods of these cases. This article points out that, first of all, the legal meaning of capital should be clarified, and capital should be a corporate asset in a broad sense. Secondly, it is necessary to redistribute the burden of proof and strengthen the legal protection of creditors. Finally, when applying the corporate personality denial system, it is necessary to clarify the bottom line function of the system.

The cost of equity of companies subject to sovereign risk

Subject. The article considers the issue of establishing the cost of equity capital of companies, taking into account sovereign risk. Objectives. The study aims at choosing a method to estimate the cost of equity subject to country risk and a method to determine the level of sovereign risk for domestic companies. Methods. The analysis rests on two methods for determining the cost of equity given the sovereign risk, i.e. the Damodaran’s model and the hybrid CAPM model. The approaches under consideration differ in the choice of a developed market country, specifically, the United States (according to the S&P 500 Index) and Germany (according to the DAX Index), and in the choice of a method for calculating the share of country risk attributable to the company. Results. Using the Damodaran’s model and the hybrid CAPM model, I established the cost of equity, determined the degree of country risk that falls on company, for 10 domestic companies. To estimate the cost of equity for 10 companies, I used the Damodaran’s model for companies and the hybrid CAPM model (which I adjusted). Conclusions. The larger the scale of the company, the greater the degree of sovereign risk falls on it. Accordingly, the cost of equity increases, and company value decreases. The gamma index varies depending on the volatility of stock returns. This indicator better expresses company's exposure to country risk. Comparing the results with the choice of the U.S. or German base market shows that in both models, the cost of equity based on the US market will be higher, and, accordingly, the company value will be lower.

Practical means to forecast potential bankruptcy and financial insolvency of companies


 The actions of companies are a multifaceted and complex procedure. The company communicates with several factors at various levels, from state to the suppliers. At the same time, in the course of the organization's whole operation, both internal and external ever-changing circumstances impact its actions and performance. That kind of ever-changing ambiance places organizations at risk of an financially unstable position. A company's bankruptcy is a regarded as crisis that needs particular approaches of financial management to surmount that. It appears greatly significant to evaluate the status of the company, take steps to restore solvency, and define the likelihood of bankruptcy. Analysis and assessment of the likelihood of bankruptcy supply an overall evaluation of the company's monetary stability, and a prediction for the future. This study aims to analyze some practical means to forecast companies' potential bankruptcy and financial insolvency. To gratify that aim, monographic, economic-statistical, and abstract-logical methods are considered. Based on the results obtained, to raise the effectiveness of the company's capital, working capital should be normalized through planning the lowest requirement for working capital for all the constituent factors vital for the company’s uninterrupted, and normal operation.

POTENTIAL AND POSSIBLE EFFECT OF THE DEVELOPMENT OF GEORGIAN FINANCIAL MARKETS

POTENTIAL AND POSSIBLE EFFECT OF THE DEVELOPMENT OF GEORGIAN FINANCIAL MARKETS

Корпоративное управление как механизм обеспечения устойчивого роста и финансового контроля

Many companies are changing their financial behavior and corporate governance model in order to achieve a sufficient level of competitiveness. Corporate governance is a process of overcoming the problems of a company’s growth and identifying sources of funding, one of which is emission. At present, the problem of the relationship between corporate governance and other aspects of management, for example, with competitiveness and the search for investments, is poorly consecrated. A change in the format of financing inevitably affects the nature of corporate governance - one or another version of insider corporate governance arises. The purpose of the article is to assess the impact of the corporate governance model on the company’s growth indicators and its competitiveness. Currently, additional drivers of economic growth and tools for strengthening competitiveness are needed. If earlier, companies tried to increase the capitalization of companies, increase the efficiency of the use of resources and production, and thus increase the income of shareholders, now shareholders are interested in creating a competitive stable company with stable growth prospects. The problems of optimizing the structure of equity capital, its dependence on the stage of the life cycle, capitalization, break-even point, the number of shareholders and the status of the company are constantly being discussed. The financial behavior of market entities has changed, the volumes of disintermediation have been reduced, further differentiation of tax rates has occurred, which leads to the need for: formation of a mechanism for sustainable growth and strengthening the competitiveness of the company; creation of stable profit distribution schemes and optimization of the tax burden on investors, both for companies and individuals; differentiation of investors; ensuring adequate dividend payments.

A measure of the evolution of the company's orientation toward its primary stakeholders

In recent years, many have argued for a greater orientation of companies toward defending the interests of their various stakeholders, and many firms have proclaimed their adherence to stakeholder capitalism. However, there is not a single measure that can objectively quantify the orientation of companies. This paper proposes metrics to capture the evolution of the primary stakeholder focus. An empirical application to ESG-rated European companies concludes that, in 2013-2021, companies seemed to move toward a greater focus on shareholders' interests to the detriment of a greater co-determination with employees' interests. Covid19 and the social capital of companies have attenuated this orientation.

ТРАНСФОРМАЦІЯ ГЛОБАЛІЗАЦІЙНИХ ПРОЦЕСІВ У КОНТЕКСТІ НАСЛІДКІВ ПОВНОМАСШТАБНОГО РОСІЙСЬКОГО ВТОРГНЕННЯ В УКРАЇНУ

Повномасштабне російське вторгнення в Україну справило серйозний системний вплив на геостратегічне, зокрема безпекове, геополітичне, економічне і фінансове, становище ключових, з точки зору глобального порядку й економічного розвитку, країн і регіонів світу. З огляду на це, визначено і проведено міждисциплінарний аналіз основних трендів трансформації глобалізаційних процесів у контексті наслідків повномасштабної війни Росії проти України. Критичне загострення геостратегічної боротьби за світове економічне і фінансове лідерство обумовило превалювання геополітичних міркувань урядів над суто ринковими міркуваннями порівняльних переваг. За цих умов глобалізація стає надзвичайно вразливою від політичних рішень на державному і міждержавному рівнях. Ключові актори світової економіки і політики – США, ЄС, Китай – дедалі більше розглядають свою участь у процесі глобалізації з позицій «стратегічної автономії», проте поки що ці процеси відбуваються в межах існуючої міжнародної фінансової системи і чинного глобального нормативного порядку світової торгівлі. Натомість, Росія, в умовах потужної санкційної ізоляції з боку світової демократичної спільноти, фактично взяла курс на розрив з провідними в ціннісному і регулятивному відношеннях інституціями і нормативним порядком постбіполярної доби. Через глобальні виклики енергетичній та продовольчій безпеці й порушення ланцюгів поставок відчутно погіршилися коротко- і середньострокові перспективи зростання й капіталізації транснаціональних високотехнологічних компаній. Як наслідок, слід очікувати стрімкого, масованого і тривалого посилення тінізації багатьох сфер міжнародних економічних і валютно-фінансових відносин, зокрема, через спроби запровадження і використання різноманітних криптовалютних механізмів у «сірих зонах» менш розвинутих регіонів світу. Водночас сьогодні немає достатніх підстав для реальної біфуркації світового економічного і фінансового простору. Важливим індикатором для такого висновку може виступати політика фінансово й організаційно контрольованих Пекіном багатосторонніх банків розвитку – Азійського банку інфраструктурних інвестицій та Нового банку розвитку БРІКС.

WAQF, SHARIA VENTURE CAPITAL, AND INSTITUTIONAL PROBLEMS: SOCIO-LEGAL CASES IN INDONESIA

The purpose of this article is to indicate that the development of venture waqf so far in Indonesia is still not optimal. It is due to several obstacles, mainly socio-legal and managerial problems. Hence efforts are needed to continue to develop the concept of sharia venture waqf to more accelerate and overcome those obstacles. One of the efforts is by integrating and collaborating with commercial financial institutions, including through Sharia venture financing which is one of the tools in the Islamic economic concept to solve investment problems. In turn, the paper provides and prescribes a reconstruction and innovation of a comprehensive understanding and workable frame of agenda to be implemented in order to revitalize sharia venture waqf as a feasible financial instrument. The result of this research is sharia venture capital company is a form of financial institution that can act as a legal entity that adopt the concept of cash waqf. It is hoped that the optimization of the development of venture waqf can be easily realized. Likewise, several obstacles such as legal protection of cash waqf, issues of socialization, human resources, management systems, and accountability will also be easier to solve with the concept of integration.