Corporate Value Research Articles

Corporate Value Assessment based on the EVA Model and Relative Valuation

As a risk-averse commodity, gold has seen new development opportunities in retail due to factors (e.g., geopolitical risks and conflicts, economic uncertainties, and inflation). Consequently, more and more investors are focusing on the gold retail industry. Evaluating the value of gold retail enterprises using scientific and effective methods is of great significance to both managers and investors. Therefore, this paper uses Chow Tai Seng, a Chinese gold retail enterprise, as a case study. Based on the company's development characteristics, we employ the EVA absolute valuation method and relative valuation methods including P/E, P/B and P/S ratios for valuation. The study finds that although its EVA values show a general downward trend from 2019 to 2023, they remain positive, indicating that the company's overall development is still on track. The development of enterprise valuation theory has gone through the MM (Modigliani-Miller) theory, Free Cash Flow Valuation Model, and the Capital Asset Pricing Model, among others. These theoretical models have gradually improved, and the theoretical system is continuously evolving. By summarizing and reviewing valuation theories and methods, this paper employs the DDM for valuation and the P/E ratio method under relative valuation based on the company's development characteristics. Combining these two valuation methods with the company's actual financial data and relevant value theories, the company can attract investors and address undervaluation by increasing its exposure through modern multimedia channels and enhancing data transparency.

기업의 ESG 성과가 기업가치에 미치는 영향 : 최고경영자 특성을 중심으로

[Purpose] It analyzes how ESG management (environment, society, and governance) affects corporate value and analyzes whether these correlations differ according to the CEO’s personal characteristics to further confirm the CEO’s role in ESG activities. Through this, it is intended to present a new perspective on the characteristics of managers and provide an opportunity to increase the importance of ESG activities. [Methodology] This study collected data from 2,469 companies listed on the Korea Exchange from 2020 to 2022. The data included ESG activity metrics, demographic characteristics of managers, overconfidence, and capabilities. Using multiple regression analysis, the relationship between managerial characteristics and ESG activities was examined. [Findings] The results indicate that managers with higher levels of overconfidence tend to participate more actively in ESG activities. Additionally, the higher the managerial capability, the more vigorous the ESG activities, which positively influenced corporate value. [Implications] This study suggests that companies can actively introduce and effectively perform ESG management to improve corporate value. In particular, managers with excellent abilities can actively implement ESG management to improve the corporate image, improve the company’s sustainable management, and maintain the company’s long －term competitive advantage. It can help companies and investors recognize this fact. In the future, more efficient ESG management and investment strategies will be established in consideration of the characteristics of the CEO in the management and investment process.

Unlocking Corporate Value – An Investigation on the Extent to which an Organization’s Strategic Priorities Can Affect its Corporate Value

Unlocking Corporate Value – An Investigation on the Extent to which an Organization’s Strategic Priorities Can Affect its Corporate Value

The Impact of Corporate Governance and Dividends on Corporate Value

The Impact of Corporate Governance and Dividends on Corporate Value

The Impact of Corporate Social Responsibility on the Relationship between Economic Policy Uncertainty and Corporate Value：Evidence from Chinese Listed Companies

The Impact of Corporate Social Responsibility on the Relationship between Economic Policy Uncertainty and Corporate Value：Evidence from Chinese Listed Companies

The Impact of Legal Proceedings Against Controlling Shareholders on Corporate Value

The Impact of Legal Proceedings Against Controlling Shareholders on Corporate Value

Incidence of trust in corporate value generated by ICT in commerce and services microbusinesses

The main objective of this study is to identify the impact of trust on the construction of corporate value in commerce and services microbusinesses. This work is based on identifying the challenges faced by SMEs (Small and Medium-sized Enterprises), which are conditioned by the type of business and the regulatory and incentive variables that exist in the territory, affecting their permanence and stability in the market and their financial and commercial development. A local study is carried out in Bogotá, Colombia, through a descriptive research project, using a quantitative analysis method (SPSS) to process data obtained from local microbusinesses. As a result, it was observed that trust has a discrete impact on the creation of corporate value, which is created from the use of ICT (Information and Communication Technology). This leads to the recognition that it is necessary to strengthen horizontal networks with suppliers, clients, and similar businesses, as well as vertical networks with entities and public associations, to generate lasting and strong links that increase the competitiveness of these business units in the face of exogenous risks shaped by the social, economic, and cultural characteristics of the territory, which are increasingly conditioned to the use of communication technology.

Corporate environmentalism and value creation: Investigating the role of shared independent directors in green technology adoption and financial performance

Corporate environmentalism and value creation: Investigating the role of shared independent directors in green technology adoption and financial performance

Government as a Source of Equity Capital for Entrepreneurs: Evidence From Entrepreneurial Exits

ABSTRACTResearch Question/IssueWe examine the effect of government equity investment on the dollar value of entrepreneurial exits spanning 50 countries over the years 1990–2015.Research Findings/InsightsData on 8532 entrepreneurial exits indicate that, relative to exits in which the investor base is purely nongovernment, private firm exits with government equity investment have higher dollar exit values. Subsample analysis suggests that the exits via initial public offerings (IPOs) drive these results with an average associated increase in IPO proceeds of $192.49 million. The positive impact of government is more pronounced when access to entrepreneurial capital is limited and for limited partnership venture capital structures.Theoretical/Academic ImplicationsResearch on government equity investment has suggested inefficiencies that lead to the deterioration of corporate value. Conversely, government equity investment can provide a valuable source of capital to some firms when investors, for example, venture capitalists, are unable or unwilling to invest. Our paper sheds light on whether government equity investment can provide value to small private firms, a subset of firms that is typically financially constrained, and how they might enhance exit value.Practitioner/Policy ImplicationsOur results suggest that governments enhance value when they provide capital in times/places where capital is scarce and government investors do not actively manage entrepreneurial firms.

ESG Dimensions and Corporate Value: Insights for Sustainable Investments

This study adopts an integrated approach to analyze the environmental, social, and governance (ESG) dimensions and their relationship with corporate value in terms of two separate hypotheses: financial performance and market value. While previous studies in the literature have researched ESG from an overall aspect, this study stands out by simultaneously considering all three dimensions individually, providing a holistic and detailed view of their combined impact on corporate value to obtain insights for sustainable investments. Another contribution to the literature is the best practices associated with dialogue with stakeholders, as this study significantly contributes to the ongoing debate regarding sustainable investments. It is very important to demonstrate the relationship between ESG dimensions and corporate value based on empirical evidence. Thus, this study fills a gap in the literature and offers a basis for future research on sustainable investments from a multidimensional perspective of ESG. A relevant contribution is a dataset that includes detailed information about ESG dimensions for 100 publicly listed companies on the B3 stock market in Brazil. This comprehensive research allows for a robust generalization of the results and proposes insights that can be applied in a variety of contexts, increasing the relevance and practical applicability of this paper.

Analyzing the Profitability's Impact on Firm Value During COVID-19

Amidst the COVID-19 epidemic, the specific impact of pharmaceutical companies' financial prowess on their overall worth remains uncertain. While many studies have explored the correlation between business value and various internal and external factors, the existing literature has not adequately focused on the precise influence of firm profitability on firm value, especially in the context of an epidemic. This article aims to fill a research gap by examining the relationship between profitability and corporate value during the COVID-19 pandemic, specifically focusing on Pfizer. This article utilizes a quantitative analysis technique. This research has developed a quantitative analytical approach to precisely measure the impact of profitability, which is an independent variable, on company value, which is a dependent variable. The investigation indicates a robust and favorable correlation between business value and sales growth. Due to the strong positive association between vaccine revenue and stock prices, it is advisable for corporate directors and strategic planners to emphasize vaccination production and sales.

Research on the Impact of Equity Pledge on Company Value

This article aims to provide a literature review on the impact of equity pledges on corporate value, and to explore in depth the application of equity pledges as a financial tool in corporate governance and capital operation, as well as its multidimensional impact on corporate value. By reviewing and analyzing relevant literature both domestically and internationally, this article first defines the basic concept of equity pledges and then elaborates on the impact mechanism of equity pledges on company value from both positive and negative perspectives. In terms of positive impact, this article explores how equity pledges can promote corporate financing, optimize capital structure, and enhance the control of major shareholders over the company. In terms of negative impacts, the possible control risk, market risk, and potential damage to the interests of small and medium-sized shareholders brought about by equity pledges were analyzed. Furthermore, this article also discusses the differences in the impact of equity pledges on company value in different scenarios and proposes corresponding policy recommendations and research prospects.

Enhancing Performance and Work Ethics of Low-Educated Employees

This research examines strategies to enhance the performance and work ethics of employees with limited educational backgrounds by implementing business ethics and organizational development practices, with a focus on PT Medi Modular Luar Biasa (PT MMLB), an Indonesian healthcare infrastructure company. The research addresses the challenges faced by companies in managing low-educated employees, including cognitive limitations, communication barriers, and difficulties adapting to organisational changes, which often lead to suboptimal performance and ethical lapses. Through qualitative interviews with employees and management, the study reveals significant differences in how employees with varying educational backgrounds understand and implement corporate values such as integrity, and professionalism. The research highlights the need for ethical leadership and structured organisational support to address these challenges. The findings suggest that enhancing the ethical climate and providing tailored training are crucial for improving both performance and work ethics among low-educated employees. The study proposes interventions such as clarifying role expectations, reinforcing ethical guidelines, and fostering a supportive work environment to drive continuous improvement and employee well-being. The research contributes practical recommendations for businesses facing similar challenges, emphasising the importance of ethical leadership in shaping positive employee behaviour and organisational outcomes.

THE IMPACT OF ENTERPRISE DIGITAL TRANSFORMATION ON GREEN TECHNOLOGY INNOVATION IN MANUFACTURING: A FACTOR FLOW PERSPECTIVE

Harnessing enterprise digital transformation to drive green technological innovation and achieve carbon reduction goals is an inevitable trend amid carbon reduction efforts. This study analyzed the impact of digital transformation on green technological innovation and the mediating role of innovation factors through a regression analysis model. The results indicate that digital transformation impacted the quantity of green technology innovation significantly more than quality. This impact was mediated by knowledge capital, human capital, physical capital, and innovation consciousness. The positive influence of digital transformation on green technology innovation varied based on corporate ownership nature and geographical location. Furthermore, the negative impact of green technology innovation on corporate value diminished over time. It is imperative for multiple stakeholders, including governments and enterprises, to collaborate in promoting innovation mobility. They should fully leverage the impact of digital transformation to enhance the quality and quantity of green technological innovation.

Book-Tax Differences during the Crisis: Does Corporate Social Responsibility Matter?

This study investigates the intricate relationship between corporate financial strategies, encapsulated by book-tax differences (BTDs), and firms’ engagement in corporate social responsibility (CSR) programs during economic crises. Using an unbalanced panel dataset drawn from financial, annual, and sustainability reports of over 97 Indonesian non-financial firms from 2017 to 2022, this study reveals that economic crises and CSR activities positively influence total BTD and permanent differences. Notably, firms strategically leverage CSR initiatives amidst crises to enhance their corporate image and manage internal challenges like aggressive tax planning. The robustness of these findings was validated through endogeneity analysis and by examining sub-samples from industries most impacted by the pandemic. In the industries least affected by the pandemic, the direct impact of CSR on BTD was found to be negative, indicating that in the general context, the CSR programs held by these industries are largely driven by normative motives. However, when specified in the crisis context, CSR serves as a strategic buffer for these industries, which reaffirms the prevalence of CSR strategic motives during Indonesia’s pandemic challenges. The findings suggest policy implications for shareholders, regulators, and policymakers to ensure CSR transparency aligns with long-term corporate values and societal impact, incentivizing genuine CSR practices amidst economic uncertainty. Despite its contributions, the study recommends future research explore different domains of CSR and validate findings across diverse contexts to enrich the understanding of CSR’s role in corporate resilience strategies.

Substitutive effects of accounting transparency and corporate governance on firm value

Recently, there has been increasing emphasis on the importance of accounting transparency and corporate governance. While previous studies have individually examined their impact on firm values, this paper investigates their combined effects. Using data from the Compustat and Center for Research in Security Prices databases obtained through Wharton Research Data Services, we measure accounting transparency and company value, and we employ the E-index as a measure of corporate governance. This study conducts firm, year, and industry fixed effects regressions on a large panel dataset comprising 21,476 firm-year observations. According to our research, both accounting transparency and good corporate governance have negative effects on the value of a company. This means that spending money to improve both may end up costing more than it benefits, which could lower the value of the company. These results support the notion that investors may see that maintaining high levels of accounting transparency and corporate governance can be excessively costly, while an overemphasis on these two metrics could potentially limit the flexibility and creativity of management. These findings have implications for managers tasked with achieving a balance between robust corporate governance, enhanced accounting transparency, and corporate value considerations.

Value-Enhancing Effect of Climate Change Risk Disclosure by Firms: Empirical Evidence Based on Textual Analysis and Machine Learning

ABSTRACT This study utilizes textual data from the social responsibility reports of Shanghai and Shenzhen A-share listed companies in China between 2007 and 2019. Through the application of textual analysis and machine learning technology, an index is constructed to gauge the extent of climate change risk disclosure by corporations. The paper examines the impact of climate change risk disclosure on corporate value, drawing from theoretical reasoning and empirical evidence.The findings reveal a significantly positive relationship between corporate climate change risk disclosure and corporate value, indicating the existence of a value promotion effect. Mechanism tests demonstrate that firms’ climate change risk disclosure enhances corporate transparency by attracting attention from analysts and the media. Consequently, this reduces information asymmetry and fosters an increase in corporate value. Furthermore, the study highlights that non-state-owned and high-polluting corporations exhibit a more pronounced value enhancement effect from climate change risk disclosure compared to other corporations. Additionally, corporations with highly readable and positively-toned textual information experience stronger value-promoting effects. These results provide robust empirical evidence supporting the practice of climate change risk disclosure among corporations in China.

Analisis Pengaruh Eko Efisiensi, Inovasi Hijau, Pengungkapan Emisi Karbon, Dan Kinerja Lingkungan Terhadap Nilai Perusahaan Dengan Ukuran Perusahaan Sebagai Variabel Kontrol

This research aims to analyze the influence of eco-efficiency, green innovation, carbon emission disclosure, and environmental performance on corporate value. The research sample consists of Consumer Non-Cyclical companies listed on the Indonesia Stock Exchange during the 2021-2023 period and received the PROPER ratings through the KLHK website. The research results show that eco-efficiency, green innovation, carbon emission disclosure, and environmental performance has a positive effect on corporate value.

Does a Change in the ESG Ratings Influence Firms’ Market Value? Evidence from an Event Study

In recent years, the field of “ESG finance” has seen rapid growth, resulting in the emergence and expansion of ESG ratings and rating agencies. This study investigates how financial investors react to updates in ESG ratings provided by two prominent ESG rating agencies, namely MSCI and Refinitiv. The main objective is to determine whether any positive or negative changes in a company’s sustainability ratings directly impact its market value. The Event Study methodology was used for this investigation, which analyses the Cumulated Average Abnormal Returns (CAARs) of economic events to assess their influence on corporate valuations. We analysed over 840 rating updates (events) using a sample of 75 companies across various industries, all listed on major stock exchanges. Our findings indicate that shifts in sustainability ratings, as evaluated by the two rating agencies, do not significantly impact companies’ market capitalisation. Furthermore, these outcomes remain consistent over time, suggesting that financial markets are not assigning increasing significance to ESG ratings. We offer potential explanations for these findings, which are discussed in light of the existing literature on the subject.

Corporate Social Responsibility (CSR) Practices of Shariaconsumer Cooperatives for Sustainable Development Goals (SDGS) Ethical Perspective

Objectives: This study aims to explain (1) Islamic business ethics and corporate responsibility for sustainable development goals, as well as (2) Corporate Social Responsibility (CSR) practices in the BTM Mulia Babat KKS in the context of Islamic business ethics. Theoretical Framework: Islamic business ethics, which includes the values of honesty, fairness, and belonging, are considered essential to achieving business success. CSR is a corporate social responsibility that aims to increase corporate value and shareholder welfare. With a commitment to sustainable economic development, CSR integrates social responsibility in business operations. The framework of this research relates the implementation of Islamic business ethics to CSR practices, as well as how this impacts the company's value and stakeholder well-being. Method: This study uses a qualitative approach with a type of field research. Data was collected through observations, interviews, and documentation related to CSR practices at KKS BTM Mulia Babat. Results and Discussion: The results of the study show that: Islamic business ethics has five basic axioms: unity, balance, free will, virtue, and responsibility. The implementation of CSR at KKS BTM Mulia Babat has been carried out by the principles of Islamic business ethics. This includes responsibility to consumers, employees, investors, and the environment. Research Implications: The findings of this study indicate that the application of Islamic business ethics in CSR can increase corporate value and shareholder welfare and contribute to sustainable economic development. In addition, it can be a model for other companies to integrate Islamic business ethics into their CSR practices. Novelty/Originality: The uniqueness of this research lies in the combination of the concept of Islamic business ethics with CSR practices in the context of the BTM Mulia Babat KKS company. This research provides new insights into how Islamic values can be effectively integrated in modern business operations to achieve better social and environmental well-being.