Corporate Profits Research Articles

How feed-in-tariff subsidies affect renewable energy investments in China? New evidence from firm-level data

The feed-in-tariff (FiT) policy is a commonly applied policy instrument aimed at fostering renewable energy (RE) investments, yet its actual incentive effect remains controversial, and there is a dearth of micro-level evidence. This study utilizes data from 39 Chinese RE generation companies from 2014 to 2021 to investigate the effect of FiT subsidies on RE investments at the corporate level. Our outcomes are as follows: (1) FiT subsidies exert a significantly positive influence on the investments of RE firms, wherein cash flow, corporate profitability and financing constraints serve as intermediating factors. (2) The economic policy uncertainty (EPU) tends to diminish the positive impact of FiT subsidies on RE investments. Conversely, environmental regulation (ER) levels can enhance the FiT subsidies' positive effect. (3) The stimulating effect of FiT subsidies on investments in large state-owned RE firms exhibits a greater magnitude. Based on this, we put forward targeted policy recommendations.

Environmental Protection tax and diversified transition of heavily polluting enterprises: Evidence from a quasi-natural experiment in China

A comprehensive evaluation of the impact of green taxes on enterprises contributes to expediting the economic transition towards environmental sustainability. This study explores the effect of environmental protection tax (EPT) on corporate diversification by leveraging the quasi-natural experiment of EPT law implementation in China. Empirical evidence reveals that, compared to non-heavily polluting enterprises, EPT increases the level of diversification of heavily polluting enterprises by affecting corporate profitability, debt capacity, and risk. Moreover, this facilitative influence is notably pronounced among non-state-owned enterprises (non-SOEs) and enterprises operating within intensely competitive environments. Further analysis shows that diversification helps heavily polluting enterprises shift to green. This transition has benefits for companies in terms of environmental penalties and operational flexibility, which improves firm viability. From the perspective of corporate diversification, this research enhances our understanding of the influence of green taxes, thus providing empirical evidence for evaluating the effectiveness of EPT.

Intellectual capital efficiency: the missing piece to your corporate governance and profitability puzzle

PurposeThe purpose of this study is to evaluate the synergy of corporate governance (CG) with intellectual capital (IC) and to assess the moderating effect of profitability indicator on the aforementioned synergy using agency theory, resource-based view theory and theory of financial ratios as conceptual frameworks.Design/methodology/approachThe sample includes 72 companies with a six-year data set drawn from the KSE 100 Index companies of Pakistan. In addition, the study adopts Pulic’s model to compute the efficiency of IC. The research uses fixed-effect panel regression for analysis and two-stage least squares regression (2SLS) to address endogeneity issues in the estimation process.FindingsThe results showcased that chief executive officer duality possesses negligible impact on IC efficiency (ICE), while independent directors, audit committees and board size tend to attain a strong association with IC. Moreover, it postulates that the moderation of return on equity strengthens the path between all governance components and ICE significantly.Originality/valueThe research uses a 2SLS regression analysis to explore how CG practices take hold on the effectiveness of IC in Pakistan while taking into account the moderating impact of profitability. The findings add to the body of knowledge on the value that strong governance practices have on businesses and society.

Profit Growth of The Company

The agricultural sector is experiencing difficulties in terms of decreased corporate profits. The average profit growth in 2014 was 487, decreased in 2015 by 364, then increased in 2016 by 653, and decreased from 2016-2019. The decline in profit occurred due to the abundant production of agricultural products, and not infrequently, some agricultural commodities were barely produced due to crop failure. This study examines the effect of Current Ratio (CR), Net Profit Margin (NPM), Debt to Equity Ratio (DER), and Total Asset Turnover (TATO) on profit growth in agriculture sector companies listed on the IDX in 2014-2019. This research uses quantitative data with multiple linear regression techniques. The research sample was determined by purposive sampling technique. Quantitative analysis includes classic assumption tests (normality test, multicollinearity test, heteroscedasticity test, autocorrelation test), multiple linear regression test, model feasibility test through t-test, F-test, and coefficient of determination. The results showed that Current Ratio (CR), Debt to Equity Ratio (DER), and Total Asset Turnover (TATO) did not affect profit growth in agricultural companies listed on the Indonesia Stock Exchange (BEI) in 2014-2019, but Net Profit Margin (NPM) affect profit growth in agricultural companies listed on the Indonesia Stock Exchange (BEI) in 2014-2019. The contribution of the results of this study can support the conception of signal theory (Signaling theory), which suggests the importance of information issued by companies to investment decisions. Information is essential for investors and businesspeople because information provides information on records and descriptions of the past, present and future for companies and the capital market. Keywords: Current Ratio, Debt, Asset, Margin, Profit. JEL Classification: G39, G19, Q02

Evolution of fiscal systems: convergence or divergence?

Abstract We analyze the convergence or divergence of the diversity of fiscal systems after the financial crisis of 2007. Studying twenty-nine countries, we first document the evolution of the taxation of households, firms, labor, consumption, and capital. We identify three types of fiscal systems: liberal, intermediate, and high-redistribution, which can be ranked in ascending order of tax rates, confirming known typologies in the diversity of capitalism literature. Only the tax rate on corporate profits shows signs of downward convergence over the period. The other tax rates show rather signs of divergence. Second, a divergence is observed among the liberal and high-redistribution groups over the period. The European countries are converging toward the high-redistribution model, with the exception of Great Britain, which is moving toward the liberal model. Thus, the financial crisis seems to contribute not to the convergence, but to the divergence of fiscal systems.

Construction and analysis of the financing risk network of Chinese fisheries enterprises

Fisheries enterprises require financing to support their production, innovation, and market expansion, but they also face various risks from the external environment. The effective prevention and mitigation of these risks is a common concern of both the government and academia. This paper aims to explore the nature and transmission mechanism of financing risk for fisheries enterprises from the perspective of dynamic capital flow and external environmental risk. Based on a literature review and expert consultation, an index system is proposed to measure the financing risk of fisheries enterprises. A complex network model is subsequently used to analyze the key risk factors and their interactions, and a risk network visualization diagram is drawn. The main findings are as follows: (1) Laws, institutions, and policies in the external environment of fisheries enterprises are the initial risk factors for the financing risk network, affecting the availability, cost, and regulation of financing sources for fisheries enterprises. (2) Market competition, corporate profitability, and financing scale are the key intermediary factors of the financing risk network, reflecting the performance, demand, and capacity of fisheries enterprises to obtain and use financing. (3) The intermediary centrality in the financing risk network of fisheries enterprises contains more information than other node characteristic parameters, indicating the importance and influence of each factor in the network structure and dynamics. This paper contributes to a deeper understanding of the nature and transmission mechanism of financing risk for fisheries enterprises and provides implications for risk management and policy-making.

Pengaruh Corporate Social Responsibility, Profitabilitas, Struktur Modal terhadap Nilai Perusahaan: Studi Empiris pada Perusahaan Farmasi yang Terdaftar di Bursa Efek Indonesia Peridoe Tahun 2018 - 2022

Company value is important because it influences the company's survival in the future. Many variables can influence company value, such as disclosure and capital structure management. Disclosure is carried out to provide information to stakeholders about the company, one of which is disclosure of Corporate Social Responsibility (CSR) which is a responsibility in terms of economic, environmental and social aspects. Capital structure management is carried out to achieve a balance between liabilities and equity so as to maximize company value. This research aims to determine the influence of Corporate Social Responsibility, Profitability and Capital Structure on Company Value in the current Covid 19 pandemic era. This research uses quantitative descriptive research. The population and sample in this study are pharmaceutical companies listed on the Indonesia Stock Exchange for the period 2018 - 2022. The data used is secondary data from annual financial reports on the Indonesia Stock Exchange. This research uses data analysis techniques such as multiple regression analysis and SPSS as tools to process and test data. The results of this research show that partially CSR has no significant effect, ROE has a significant effect and DER has no significant effect on company value. Meanwhile, simultaneously CSR, ROE, and DER have a significant effect on company value.

Corporate environmental infringement, legal regulation, and sustainable development: punitive damages as a perspective

In order to maximize personal interests, enterprises have a tendency to choose environmental pollution in exchange for corporate profits, resulting in negative externalities; the Civil Code of the People’s Republic of China imposes legal regulations on the environmental infringement of enterprises in order to achieve the maximization of the use of the allocation of social resources and promote the sustainable development of society. Subsequent judicial interpretations have set a two-fold cap on the amount of punitive damages. However, in cases of extremely serious environmental damage, the two-fold cap on punitive damages for environmental infringement will create the possibility of insufficient compensation. Based on this, this paper analyzes the legal text of China’s punitive damages provisions for environmental infringement and analyzes the interrelationships between enterprises and between enterprises and potential environmental infringement victims in a game analysis. The results of the analysis show that as the amount of punitive damages for environmental infringement increases, the probability of the infringed person filing a lawsuit and that of the enterprise reducing its environmental infringement behavior also increase. In order to promote the cause of China’s sustainable development, this paper puts forward relevant suggestions for the improvement of China’s environmental legal regulation: first, the upper limit of the amount of punitive damages for environmental infringement should be canceled; second, the amount of reasonable punitive damages should be set on the basis of the damages caused by environmental infringement on human beings and the environment; lastly, in the baseline setting of the amount of punitive damages, additional factors need to be taken into account, and the amount of punitive damages should be set for the enterprises with a high degree of maliciousness. Finally, additional factors need to be considered in setting the benchmark for the amount of punitive damages, which should penalize the enterprises causing environmental infringement with a high degree of malice with heavier penalties and, at the same time, penalize the enterprises with a smaller scale of operation and economic strength with lighter penalties.

VAT rate cut and corporate maturity mismatch: Evidence from China's VAT rate reform

This paper explores the causal link between value-added tax (VAT) and corporate maturity mismatch between investment and financing, using China's VAT rate reform, which lowered VAT rates and was enacted on July 1st, 2017, as a quasi-natural experiment. The results show that the VAT rate reform apparently reduces the degree of corporate maturity mismatch. This is because, on the financing side, the reform improves corporate profitability and thus reduces short-term debts, while on the investment side, the reform has no impact on firm investment. Furthermore, the interaction effects of VAT rate reform and other tax incentives on investment are significantly negative, and short-term debts are riskier than long-term ones, strengthening the above mechanisms. We also find that market competition enhances the reform effects on corporate profitability and corporate maturity mismatch, shedding light on the role of market competition in shaping effect. Finally, we find that the reform effects are primarily significant for non-state-owned enterprises, firms in capital-intensive industries, and firms registered in middle and western China. These findings enrich the understanding of the economic consequences of VAT rate reform and help the government introduce better policies to stimulate investment and control financial risks.

Corporate Social Responsibility and Profit Shifting

This paper examines the relation between corporate social responsibility (CSR) performance and tax–motivated income shifting. Using a profit–shifting measure estimated from multinational enterprises (MNEs) data, we find that parent firms with higher CSR scores shift significantly more profits to their low-tax foreign subsidiaries. Overall, our evidence suggests that MNEs engaging in CSR activities acquire legitimacy and moral capital that temper negative responses by stakeholders and thus have greater scope and chance to engage in unethical profit-shifting activities, consistent with the legitimacy theory.

<p>Does climate change pose physical and transition risks to the financial stability of Türkiye? Evidence from Fourier Bootstrap ARDL</p>

Türkiye is experiencing unprecedented events of climate-related natural disasters in recent years ranging from wildfires, drought, floods, and earthquakes. These natural disasters may trigger financial instability via physical risk, arising from damages to fixed capital, disrupting coastline operations, and decline in agricultural products. The introduction of environmental regulations, policies, and innovations aimed at the mitigation of physical risk might trigger transition risk. This affects the value of the assets held by businesses within the fossil fuel industry and carbon-related industries; leading to increased insurance liability, reduction in cashflows, profitability, and insurability of corporations that depend on ecosystem services. Thus, the impact of physical and transition risk on the financial stability of Türkiye was investigated from 1980-2020 using the novel Fourier Bootstrap ARDL technique. The analysis revealed that physical risk measured as the frequency of natural disasters increases the risk of financial instability in Türkiye both in the short and long run. Contrarily, transition risks measured by environmental taxes and environmental technologies were found to increase the financial stability in Türkiye. As a major policy implication, it is suggested that companies must consider the risk of climate change during the infrastructure planning and building process. In addition, the government should revise environmental taxes to boost environmental innovation for a sustainable future.

Oil price uncertainty, oil pricing reform, and corporate profitability: The case of China.

This study investigates the impact of oil price uncertainty (OPU) on corporate profitability in China, the world's largest crude oil consumer. Most importantly, we examine how the Chinese government's oil price reform affects this relationship. Using the yearly data of Chinese-listed companies, we find that the uncertainty of oil prices negatively affects corporate profitability but positively impacts operating expenses from 2007 to 2020. This finding holds after robust tests, including alternative profitability metrics and endogeneity model. Most interestingly, implementing the 2013 market-oriented oil pricing reform amplifies the adverse impact of OPU on corporate profitability owing to increased operating costs in the post-2013 period. Moreover, the detrimental effect of uncertain oil prices on corporate profitability is less prominent for large-capitalized companies. This research adds to the body of knowledge on the factors affecting corporate profitability by highlighting the volatility effect of oil prices and government pricing mechanisms. The results offer grounds for legislators and corporate managers to consider how to control the uncertainty surrounding oil price matters to ensure stable corporate profitability.

Pengaruh Corporate Social Responsibility, Ukuran Perusahaan, Leverage, Kepemilikan Asing, Kepemilikan Publik, dan Profitabilitas Terhadap Agresivitas Pajak pada Perusahaan Sektor Pertambangan

This study aims to examine the effect of corporate social responsibility, company size, leverage, foreign ownership, public ownership, and profitability on tax aggressiveness in mining sector companies listed on the Indonesia Stock Exchange in 2018-2021. This research is a type of quantitative research and uses secondary data types. The population in this study are mining sector companies listed on the Indonesia Stock Exchange in 2018-2021. The sample in this study was obtained using a purposive sampling method, namely as many as 22 companies with an observation period of 4 years. The dependent variable in this study is tax aggressiveness. The independent variables in this study are corporate social responsibility, company size, leverage, foreign ownership, public ownership and profitability. The data analysis technique used in this study is multiple linear regression analysis. Based on the analysis of the data used, it shows that company size, foreign ownership, and public ownership have a significant effect on tax aggressiveness. Meanwhile, corporate social responsibility, leverage, and profitability have no significant effect on tax aggressiveness.

CORPORATE SOCIAL RESPONSIBILITY AND PROFITABILITY IN CIGARETTE SUB-SECTOR COMPANIES REGISTERED ON BEI IN 2012-2021

The purpose of this research is to determine the influence of Corporate Social Responsibility (CSR) and profitability on firm value. Profitability is assessed using Return On Assets (ROA) and Return On Equity (ROE), Corporate Social Responsibility (CSR) is measured using GRI G4 with 91 disclosure category indicators while firm value is measured using Price Book Value (PBV). The purposive sampling method was used to collect samples from companies in the cigarette sub-sector listed on the Indonesia Stock Exchange from 2012 to 2021. Classical assumption tests, multiple linear regression analysis, and hypothesis testing with the t test, f test, and coefficient of determination test were used. for data analysis in this research. The results of this research indicate that Corporate Social Responsibility has no influence on Firm Value. Return on Assets has a significant positive influence on firm value. Return on Equity has a significant positive influence on firm value. Corporate Social Responsibility, Return on Assets, and Return on Equity simultaneously influence firm value. Profitability as measured by Return on Assets has a dominant influence on firm value.

The Influence of Corporate Social Responsibility and Profitability on Tax Avoidance

The urgency of the research is that there is new research on the factors influencing tax avoidance. Based on the literature or journal reference collection, this research has novelty compared to previous research, namely adding independent variables, changing the company object, and updating the research year. The type of research used is quantitative research. The population in the study were all manufacturing companies on the Indonesian Stock Exchange in 2017-2021. Data collection is a step-by-step process for compiling data according to the character and needs of the research. The data collection technique in this research is the documentation method. Documentation is done by reading and taking notes from books, research journals and internet downloads. This research will test the moderating effect of audit quality on the relationship between corporate social responsibility, profitability and tax avoidance variables. This method is completed using Moderated Regression Analysis (MRA). This research shows that the first regression model shows no significant influence between corporate social responsibility and partial tax avoidance. The first regression model shows a significant negative influence between profitability and partial tax avoidance.

Optimizing Electric Vehicle Integration with Vehicle-to-Grid Technology: The Influence of Price Difference and Battery Costs on Adoption, Profits, and Green Energy Utilization

Over the past decade, the widespread adoption of global green energy has emerged as a predominant trend. However, renewable energy sources, such as wind and solar power, face significant wastage due to challenges in energy storage. Electric vehicles (EVs) are considered an effective solution to address the energy storage dilemma. “Vehicle-to-grid” (V2G) technology, allowing vehicles to feed electricity into the grid, enhances the efficiency of renewable energy utilization. This paper proposes an electric vehicle game model that comprehensively considers user choices, corporate profits, and green energy utilization. The model, based on difference in prices, electricity rates, and fuel prices, establishes user utility models to determine optimal driving distances and driving decisions. It separately formulates the maximum profit functions for selling conventional electric cars and V2G electric cars, deriving optimal pricing for enterprises and user adoption rates. The research findings indicate that when price difference can offset V2G battery costs, increasing price difference and reducing battery costs effectively enhance electric vehicle adoption rates, increase corporate profits, and improve green energy utilization. Moreover, compared to conventional electric vehicles, V2G electric vehicles demonstrate a comparative advantage, with the implementation of V2G expanding corporate profits and green energy utilization. Validation using Chinese data reveals that when price difference can offset V2G battery costs, drivers are more inclined to choose V2G electric vehicles. Both battery electric vehicles (BEVs) and V2G electric vehicles exhibit adoption rates that can increase by over 35%. This study provides theoretical and model support for the future development of V2G and policy formulation, underscoring the comparative advantages of V2G in enhancing green energy utilization efficiency. Additionally, this study offers valuable insights as a reference for business models in the V2G electric vehicle industry.

Determinants of Firm Value and Its Implications on Stock Return of Banking Companies in Indonesia

This study aims to examine the effect of good corporate governance, macroeconomics, profitability and firm size on firm value which has implications for stock returns. Quantitative methods with panel data regression. The sample is 15 banking companies for the 2015-2021 period. The results show that 1) good corporate governance has no direct effect on stock returns but has a significant negative effect indirectly through firm value, 2) macroeconomics directly has a significant positive effect on stock returns but indirectly through firm value has no significant effect, 3 ) profitability either directly or indirectly through firm value has no significant effect on stock returns, 4) firm size either directly or indirectly through firm value has a significant positive effect on stock returns, 5) together good corporate governance, macro economy, profitability, and firm size have a significant positive effect on firm value, 6) together good corporate governance, macroeconomics, profitability, firm size and firm value have a significant positive effect on stock returns.

The Impact of Independent Directorship on Business Performance in China: Empirical Study on SSE Listed Firms

In an effort to enhance the influence of independent directors within the framework of corporate governance, the China Securities Regulatory Commission (CSRC) has recently introduced revised regulations pertaining to independent directorship in August 2023. This regulatory adjustment signifies a pivotal step towards bolstering Chinese-specific corporate governance. This research endeavors to delve into the potential impact of independent directorship on business performance within mainland China's corporate landscape. This study harnesses data from publicly traded companies on the Shanghai Stock Exchange (SSE) in conjunction with panel data analysis and Ordinary Least Squares (OLS) regression to build empirical models. It is noteworthy that the initial results indicate a favorable connection between independent directorship and business performance. It has been demonstrated that having more independent directors is connected with better corporate profitability. Against the backdrop of the newly implemented regulatory reforms concerning independent directors, this study is poised to make a substantive contribution to the ongoing discourse on corporate governance and its ramifications for business performance in China. As these revised regulations usher in a renewed emphasis on independent directorship, this research's insights hold significant relevance for both practitioners and policymakers navigating the evolving corporate governance landscape.

The paradox of corporate sustainability: analyzing the moral landscape of Canadian grocers.

Food prices have experienced unprecedented increases in recent times. Simultaneously, grocers are facing allegations of capitalizing on inflation to generate unjustifiable profits. Escalating expenses and a lack of transparency have engendered heightened consumer skepticism. This perceived presence of barriers and excessive profitability gives rise to ethical concerns. Our case study delves into the ethical landscape surrounding Canadian grocers, aiming to probe the public's demand for accountability. To comprehend the factors responsible for the transformation in consumer perception of Canadian grocers in 2022, we conducted an analysis utilizing data from consumers, corporate watchdogs, and industry sources. We extended the paradox perspective on corporate sustainability framework to include a historical aspect to use as our analytical lens. This study sheds light on the alterations in circumstances that have led Canadian consumers to question entire industries and accounting practices that were previously considered unproblematic. As a remedy, we recommend the establishment of a mandatory code of conduct for grocers and an enhancement in the transparency of financial reporting. Paradoxically, corporate profits may continue to grow when societal needs are no longer perceived as being neglected or, even worse, exploited.

The Influence of Good Corporate Governance and Profitability on Tax Aggressivity with Company Size as a Moderation Variable

This study aims to examine and determine the effect of Good Corporate Governance and profitability on tax aggressiveness. The research method used is a quantitative method. The data used is secondary data in the form of financial reports of mining sector companies listed on the Indonesia Stock Exchange for 4 observation periods, namely between 2018-2021 obtained from the official IDX website and company website. Determination of the sample using purposive sampling so that the data obtained were 13 mining companies and 52 research sample data. Furthermore, the data analysis used is an analysis in the form of multiple linear regression tests. The results showed that good corporate governance has no effect on tax aggressiveness, profitability has no effect on tax aggressiveness, firm size has not moderated the effect of profitability on tax aggressiveness and firm size has not moderated the effect of institutional ownership on tax aggressiveness.