Capital Companies Research Articles

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.

Protection of the Interests of Capital Companies in Selected Judgments of the Supreme Court Pertaining to the Application of Article 210 (379) of the Code of Commercial Companies

The paper aims to examine selected issues of representation of a company, which will be carried out on the basis of a special provision laid down in Article 210(1) (379(1)) of the Code of Commercial Companies. The objective of the provision is to protect the company’s interests and the way to achieve this goal is through exclusion of the management board from representation in contracts and disputes between the company and a member of the management board. The paper seeks to examine the scope of application of Article 210(1) of the Code and to determine the legal nature and types of power of attorney that can be granted pursuant to the provision. The analysis is based on a rather complex factual case, and examines legal relationships in a limited partnership in which a limited liability company and a member of its management board are partners.

ANALYSIS OF THE EFFECT OF LONG TERM DEBT, SHORT TERM DEBT, TOTAL DEBT ON FINANCIAL PERFORMANCE IN MANUFACTURING COMPANIES LISTED ON THE IDX

This research aims to investigate the effect of Long Term Debt, Short Term Debt, and Total Debt on Return on Equity (ROE) in manufacturing companies listed on the Indonesia Stock Exchange (BEI). The data used are the company's annual financial reports for the period 2018 - 2020. The panel regression analysis method is used to evaluate the relationship between long-term debt, short-term debt, and total debt variables with the company's ROE. The research results show that Long Term Debt has a negative and significant influence on ROE, indicating that the use of long term debt can reduce the rate of return on a company's own capital. On the other hand, Short Term Debt does not have a significant effect on ROE. However, Total Debt shows a negative and significant influence on ROE, indicating that too much dependence on debt can reduce the company's rate of return on its own capital. These findings provide valuable insights for company management in managing their capital structure to achieve optimal profit levels.

Analisis Modal Kerja pada Industri Telekomunikasi di Indonesia

Working capital is an important aspect of company expenditure. Incapability to maintain a satisfactory level of working capital leads to higher possibility of default. The analysis of sources and uses of working capital is substantial for managers in predicting the usage and spending of efficient working capital. This study purposes to examine the reports on sources and use of working capital of telecommunication companies listed on the Indonesian stock exchange circa 2019 and 2020. Further, we collected six companies as samples, therefore there were 12 sample observations. Quantitative descriptive is used as the method and the secondary data was obtained from the financial reports. The results show that 33.3% of telecommunications companies use working capital optimally, meanwhile the remaining 66.7% have not been efficient in managing their working capital. Companies that are efficient in the use of working capital are PT Jasnita Telekomindo Tbk (JAST) and PT Telkom Indonesia Tbk (TLKM).

Analisis Rasio Keuangan dalam Mengukur Kinerja Keuangan Pada PT. Perusahaan Gas Negara (Persero), Tbk

The purpose of this study was to measure financial performance by applying financial ratio analysis at PT. State Gas Company (Persero), Tbk. In this study using liquidity financial ratios, activity ratios, and solvency ratios. The data source used in this study is secondary data from PT. The State Gas Company (Persero), Tbk in 2016 to 2018. Data collection techniques used documentation techniques. The analytical method is done by comparing company financial performance in several periods. The result of the activity ratio calculation is that the company cannot be said to be efficient when using company assets. The results of the calculation of the company's solvency ratio are not good because the company's debt is bigger than the company's capital. The results of the calculation of the company's liquidity can meet financial obligations in the short term.

MARKALARIN ANONİM ŞİRKETLERDE SERMAYE OLARAK TAAHHÜDÜNDE AKTİFLEŞTİRME YASAĞI VE MARKA DEĞERİNİN BİLANÇODAKİ YERİNİN TESPİTİ

6102 sayılı TTK’nın 342’inci maddesi ile kanun koyucu bir yandan üzerlerinde sınırlı ayni bir hak, haciz ve tedbir bulunmayan, nakden değerlendirilebilen ve devrolunabilen, fikrî mülkiyet haklarının ayni sermaye olarak getirilebileceğini düzenlerken, diğer yandan aynı kanunun 74’üncü maddesinin ikinci fıkrası ile Türkiye Muhasebe Standartları uyarınca getirilen istisnalar saklı kalmak üzere bedelsiz olarak elde edilmiş, maddi olmayan duran varlıklar için bilançonun aktifine kalem konulamayacağını hüküm altına almaktadır. Bu durum Türkiye Muhasebe Standartları kapsamında markaların anonim şirketlere ayni sermaye olarak taahhüt edilip edilemeyeceği sorununu beraberinde getirmektedir. Konuya ilişkin olarak Türkiye Muhasebe Standartları kapsamında benimsenen anlayış uyarınca bir varlığın muhasebeleştirilmesi için bu varlığın maliyetinin güvenilir bir şekilde ölçülebilmesi gerekmekte olup, işletme tarafından meydana getirilen veya bir bedel ödenmeden elde edilen markaların değerinin parasal olarak ölçülmesi ve değerlendirilmesi olanaksız olarak kabul edilmekte ve bu çerçevede kural olarak aktifleştirilmesi ve bilançoda gösterilmesi mümkün olmamaktadır. Yine ilgili idarelerce benimsenen ve markaların rayiç değerinin mahkemelerce belirlenmesi halinde bu değerin belirli hallerde aktifleştirme yasağı kapsamında kabul edilmesi gerektiği yönündeki görüşler de özellikle ayni sermaye taahhüdü yolu ile şirkete getirilen markaların bilançonun aktif kısmında yer alıp alamayacağının sorgulanmasına neden olmaktadır. Bunun bir sonucu olarak kuruluş esnasında sermaye taahhüdü yoluyla anonim şirkete bedelsiz olarak getirilen markaların sermayenin korunması ilkesi bağlamında geçerli bir taahhüt teşkil edip etmediği şüpheli bir hale gelmektedir. Nitekim kural olarak bilançonun aktifler kısmında yer alan katılım paylarının içerisinde aktifleştirilmesine imkan bulunmayan bir değerin yer alması, anonim şirketin henüz kuruluşu yahut sermaye artırımı aşamasında sermayesinin bir bölümünün karşılıksız kalmasına neden olmakta, bu husus sermayenin korunması ilkesinin bir ayağı olan sermayenin teşkili noktasında muhasebesel bir engel teşkil etmektedir. Bu engelin aşılabilmesi adına markaların bilançolara aktarılması esnasında gündeme gelen aktifleştirme yasağı kapsamında markaların sermaye olarak taahhüdü hususunun değerlendirilmesi gerekmektedir. Yapılan açıklamalar kapsamında hazırlanan çalışmamız ile öncelikle aktifleştirme yasağının amacı ve kapsamı ortaya konulmakta, markaların değerlemesine ilişkin esaslar ve marka değerlemesinin önemi bağlamında mahkemelerce atanan bilirkişiler tarafından tespit olunan değerlerin bilançolardaki yeri tespit edilmektedir.

Cross-border mergers and acquisitions

Introduction. Cross-border mergers and acquisi­tionshelp increase global competitiveness. Problem. Taking into account the trend of strengthening integration processes in the interna­tional economy, it is especially important to study the foreign experience of cross-border mergers and acquisitions, analyze their effectiveness and find ways to improve this market. An analysis of recent research and publications has shown that despite the existence of some scientific achievements, an important scientific and practical problem of the characteristics of cross-border mergers and acquisitions in accordance with current trends in the international economy remains unresolved. The aim of the article is to identify the chara­cteristics, analysis of the current state and trends of cross-border mergers and acquisitions. Materials and methods. In the course of the research the materials of the State Statistics Service of Ukraine, reports of international organizations and scientific works of scientists on cross-border mergers and acquisitions were used. Methods of abstraction, analysis and synthesis, generalization, historical method, structural-functional method, etc. were used. Research results. Characteristic features and tendencies of cross-border mergers and acquisitions are determined: periodic alternation of world economic crises and stock market falls (2008–2009, 2011, 2020); mainly occur in industries with a high level of monopolization (technological and financial sectors, energy); agreements are increasingly being concluded at the initiative of private investment funds or large corporations from the BRICS countries. It is established that the leaders of cross-border mergers and acquisitions, which serve as an important source of attracting foreign investment, are companies in North America and Europe. Conclusions. The main ways to improve the market for cross-border mergers and acquisitions are: increasing the capitalization of national companies and their investment attractiveness; increasing the volume and quality of products; development and implementation of new technologies; modernization of the sectoral structure of the economy; development of transport and financial infrastructure; develop­ment of the domestic stock market, ensuring openness and reliability of financial statements; improving the regulatory framework; stabilization of the military-political situation.

Руссотурк: Советские Зарубежные Инвестиции и Социальная История Ранней Турецкой Республики

The purpose of this article is to introduce and examine the story of Russotürk, which was established as a venture capital company that was established in 1924 with the collaboration of the Soviet Union and Turkey in Istanbul. Russotürk helped the Soviet Union during the 1920s to overcome the obstacles that were put on export goods in the foreign trade of the Russians as it was a joint-stock company. One of the most important tasks undertaken by the company is to promote and increase the export of Soviet goods in the Middle East and Balkan countries such as Turkey, Egypt, Syria, Palestine, and Greece, in which the Soviet Trade Representatives were not allowed to operate. Russotürk, which was trying to attract the attention of the Turkish bourgeoisie, could not prevent the company, with which they were dealing joint business Karadeniz firm, to become partners with White Russians. Thus, the White Russians were effective in the foreign trade of the Soviets until Russotürk was liquidated. Selling Soviet export goods below the average world prices and issuing import licenses in return are among the most criticized issues that the company encountered. Russotürk constantly competed with Arcos and other Soviet economic institutions. The most obvious indication of this competitive situation was the sales of the Soviet agricultural tools in the Turkish market. The founding officials of Russotürk, which had eventful and nontrivial establishment and closure, were tried in the Soviet courts. Russotürk completed its duty and ended its existence when 1927 trade agreement was signed among the Soviet Union and Turkey.

Climate Impact Investing

This paper shows how green investing spurs companies to mitigate their carbon emissions by raising the cost of capital of the most carbon-intensive companies. Companies’ emissions decrease when the wealth share of green investors and their sensitivity to climate externalities increase. We show that the impact of green investors primarily governs companies’ long-run emissions. Companies are further incentivized to reduce their emissions when green investors anticipate tighter climate regulations and climate-related technological innovations. However, heightened uncertainty regarding future climate risks alleviates green investors’ pressure on the cost of capital of companies and pushes them to increase their emissions. Calibrated on U.S. data, our model suggests that, albeit effective, the impact of green investors remains limited given their current wealth share and practices. This paper was accepted by George Serafeim, Special Section of Management Science on Business and Climate Change. Funding: This work was supported by the Europlace Institute of Finance. T. De Angelis received funding from the Engineering and Physical Sciences Research Council [Grant EP/R021201/1], and P. Tankov received funding from the Finance for Energy Markets research initiative of the Institut Europlace de Finance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4472 .