Decline In Investment Research Articles

Sustainable Policy Dynamics—A Study on the Recent “Bust” of Foreign Residential Real Estate Investment in Sydney

We undertook an autopsy of the drivers of individual foreign real estate investment ‘bust’ in Australia through a new theoretical lens of ‘habitus’. Our autopsy data drew contours around the individual foreign real estate capital ‘boom and bust’ cycle, as well as the long-term commitment of professionals in the real estate sector to Australia’s real estate market. More specifically, we showed that the foreign capital ‘boom and bust’ cycle began in earnest in about 2010 (starting at A$8.7 billion), grew to A$72.4 billion in 2016–2017, and then declined to A$12.5 billion in 2017–2018. This decline in foreign capital into Australian real estate occurred within a domestic real estate market in Sydney that also started to slow in 2017. Based on 20 semi-structured interviews with real estate professionals in Sydney and public material culture data, we found out that the off-the-plan apartment sales and global policy landscape changes contributed to the decline of foreign real estate investment in Australia. The three possible implications for Sydney’s future residential real estate development: (1) The loss of investors, (2) the evolution of the labor force, and (3) the diversification of housing products, have been raised as part of a future research road map.

PERLINDUNGAN HUKUM TERHADAP INVESTASI ASING YANG MASUK DI PROVINSI RIAU

Law Number 25 Year 2007 concerning Capital Investment gives equal treatment to Domestic Investment and foreign investors with due regard to the national interest, ensures legal certainty, and security of business for investors since the process of licensing until the end of investment activities in accordance with the provisions of legislation. Under the Act it is clear that foreign investors must obtain legal protection and certainty as domestic investors. But the reality is different so the impact that arises that uncertainty is the development of unstable foreign investment, a significant increase and decrease in Riau Province. While the factors causing the decline of foreign investment in Riau Province are the differences in both licensing, raw materials and protection between foreign investors and domestic investors in Riau Province, so foreign investors feel unsafe to invest in Riau Province.

THD Reduction Using Shunt Active Power Filter: A Real Case Study

Harmonic pollution in the industrial field causes extra heat dissipation and increased rms (root mean square) values of both voltage and current waveforms, which hence increase losses, decrease the overall efficiency, and increase the energy cost in power plants. Moreover, harmonic pollution results in a decline in industrial investment. A solution to mitigate harmonic pollution is proposed using an active power filter by identifying both the phase current and the voltage and then providing a compensation current the same in magnitude and negative in direction to the distorted current. In this paper, a three-phase active power filter for current harmonic compensation in power distribution lines is adopted. Practical measurements performed on the United Iron and Steel Manufacturing Company bus bar for different factory and Jordanian national power system grid loads demonstrate the validity of the proposed approach using a shunt active power filter (SAPF). Using p-q theory, the results show that the proposed SAPF is convenient for suppressing harmonic current. Hence, the overall power quality of the grid is improved, and the reliability is enhanced. Finally, this work is implemented using simulink/Matlab.

Technical and Non-technical Challenges of Development of Offshore Petroleum Reservoirs: Characterization and Production

Offshore oil and gas reservoirs comprise a significant portion of the world’s reserve base, and their development is expected to help close a potential gap in the supply of hydrocarbons in the near future. Continuous advances in technology have helped the oil and gas industry to extend the exploration and production activities to deep and ultra-deep waters in harsher environments. Field development in the offshore environment is associated with numerous significant challenges in different phases including exploration, reservoir description and characterization, development planning, drilling, production, improved oil recovery (IOR) and enhanced oil recovery (EOR), transportation, and decommissioning. These challenges are further complicated by economic restrictions, especially in periods when low or unstable oil prices weaken the incentives of investments due to the high risks and uncertainties involved. Environmental concerns including the adverse effects of seismic surveys, drilling activities, discharge of waste material and produced water, and accidental spills and blowouts add another level of complexity to the design and implementation of offshore projects. Safe, reliable, and efficient development of offshore hydrocarbon reservoirs can be achieved through the proper identification of the challenges and use of modern technologies and innovative methods. This work is an effort to provide a comprehensive review of the history, global distribution, production share, classification, characteristics, and characterization methods of offshore reservoirs, and some of the main aspects and challenges of the experimental and modeling works as well as IOR/EOR planning and implementations from the reservoir engineering and production standpoint. These challenges are categorized based on their area of impact, i.e., characterization and recovery (production) phases. Furthermore, economic and environmental challenges are reviewed. After the recent downturn that caused a decline in offshore investments, current investment trends and the forecasts show that the offshore industry is booming again with more focus on cost saving and operational efficiency. The key technologies that can expedite the growth of the offshore petroleum industry have also been discussed.

Tropical and subtropical forage germplasm conservation and science on their deathbed! 1. A journey to crisis

While interest in the potential of tropical and subtropical forage (TSTF) germplasm for improved livestock production commenced earlier, it was not until the 1950s and 1960s that plant collecting and research on diversity and utilization of grasses and legumes reached significant global momentum. The subsequent engagement in pasture and forage research by the Consultative Group on International Agricultural Research (CGIAR) centres, such as the International Center for Tropical Agriculture (CIAT) and International Livestock Centre for Africa (ILCA; 1974–1995)/International Livestock Research Institute (ILRI; since 1995) from the 1970s onwards, built on the advances made by national centres in Australia, the United States of America, Kenya and elsewhere. By 1990–2000, TSTFs were recognized for contributing to a range of commercial and smallholder livestock production systems in Latin America, Australia, Southeast Asia, South Asia and Africa. However, their use, the value of further research and the need to maintain the very large and diverse collections held in international and national genebanks were challenged by this time because of perceived environmental risks, questions about whether or not past achievements could be bettered and the high costs of maintaining genebanks. Since then, the decline in investment and the quality of conservation and curation has been a relatively rapid process and reached the crisis point of today in just 20–25 years. This article traces 70 years of expansion and then decline of plant collecting, conservation, research and commercialization of TSTFs as a new commodity and examines the reasons for the sharp changes that have taken place. In a second article (this issue), the argument is made for swift and drastic action to prevent critical germplasm from being lost, to enable genebanks to play their crucial and unique role in underpinning improving production and productivity in livestock systems and to provide key germplasm tools to achieve environmental benefits.

Time to build and the real-options channel of residential investment

A standard real-options model predicts that time-to-build investment could be delayed by uncertainty over future revenue. We quantify the first-order importance of this mechanism in the 2002–2011 housing boom-bust cycle by developing and estimating a model of sequential irreversible investment with stochastic bottlenecks. We find that the main driver of construction delays during the boom is construction bottlenecks. However, further delay in construction during the bust is caused by an increase in uncertainty, which grew by 21.6% between 2002 and 2009. The model can account for more than one-third of the decline in residential investment between 2002 and 2009.

Agricultural investment in Iraq ( Reality and determinats ) for the period (1995-2015)

This research aims to study the influence of the most important factors that reflect on the agricultural investment in Iraq (1995-2015) and its impact on the agricultural sector in general. For this, the research is based on the hypothesis that the fluctuation and decline in agricultural investment to several economic factors vary in their effect. According to this hypothesis. The research relied on the method of linking two directions, The descriptive approach, which relied on previous studies on the same subject, quantitive, which based on the methods and styles of the standard economy, where the ordinaryleastsquareswasusedand explanation of quantitive style results for the evaluation of the technical phase of study. Agricultural investment (fixed capital accumulation) was adopted as an approved variable, and the size of agricultural loans, inflation rate, deficit and surplus from the general budget of the government, the value of support to agricultural sector, the value of investment allocations in the agricultural sector for agricultural reclamation. The research has achieved many conclusions among which is that despite of the investment allocations directed to the agricultural sector and the initiation of the agricultural initiative in 2008 ,however, the volume of agricultural loans showed non- significant importance, no clear strategy for agricultural investment appeared , additionally, these allocations were not strongly nor directly directed to the agricultural investment, based of the above of conclusions achieved by the study on the importance of drawing or imaging a future vision of agricultural investment clear enough to get the agricultural reality really prospered and emphasizing on the importance of of the continuity in supporting the agricultural sector specially in the increase of the investment allocations and the continuity of the funding policy Through. the agricultural initiative, while ensuring the existence of a strong monitoring apparatus that ensures the disbursement of these amounts in the right level in order to access agricultural investment at required level, which in turn works on the development of the agricultural sector, As well as increasing interest in the study of economic indicators and agricultural positive effects and activate the role of low-impact indicators such as support to the agricultural sector poor input support will support the outputs to improve the reality of the agricultural sector.

Does China change the game?

It is vastly overdone to suggest that China changes the game. The challenges posed by the Chinese economy will not disappear because the U.S. puts pressure on them. The swing to statism in China’s internal and external polices, however, is raising backlash abroad and driving down its growth rate at home. In the national security context, there is no one hyper-cool technology that is going to suddenly enable the Chinese to establish dominance. Technological prowess, including military capacity, is about system integration. Protectionism, instead will weaken the U.S. through cronyism, decreasing competition by statism. The sign of the self-inflicted damage from the Trump administration’s policies is the marked decline in net inwards foreign-direct investment. Though troubling, it is not by itself sufficient to generate a recession.

The Effect of Electricity Shortages on Firm Investment: Evidence from Ghana

Access to electricity has been widely acknowledged as playing an important role in economic growth. However, there has been relatively little research on how access to electricity affects the decisions of firms. Electrification rates in developing countries have increased but electricity access remains plagued by outages. This paper examines the impact of electricity shortages on firm investment. I identify this impact by studying an electricity rationing programme in Ghana, which placed significant constraints on electricity supply to firms. Using data on Ghanaian manufacturing firms, I find a decline in investment in plant and machinery during the electricity rationing period, with a more pronounced decline for firms in electricity-intensive sectors. This result suggests that at least part of the reduction in investment during the electricity rationing period was due to the constraints on the availability of electricity. These findings highlight the potentially negative impact of the inadequate provision of electricity that frequently plagues developing countries. These electricity constraints can hinder growth in these countries by curbing investment by firms.

The optimal composition of public spending in a deep recession

We study optimal fiscal policy in an economy plunged into a deep recession characterized by a liquidity trap, and in which the government can allocate spending both to consumption and investment goods. Public investment increases the stock of public capital subject to a time-to-build constraint. The zero lower bound on the nominal interest rate binds as a result of a large shock that increases households’ desire to save in the risk-free asset, pushing the natural rate of interest below zero. Under nominal rigidities and sub-optimal monetary policy, the shock leads to a large decline in private consumption and investment. We show that the optimal response to such a shock is to temporarily raise public spending above the level that would be dictated by classical principles, and to tilt its composition towards public investment. This compositional shift lasts well after the natural rate has ceased to be negative. Our results suggest that the American Recovery and Reinvestment Act of 2009 was insufficiently oriented towards public investment.

The Impact of Public Pension Funds and Other Limited Partners on the Governance of Venture Capital Funds

We examine whether the reinvestment choices of public pension funds (PPFs) affect the governance of venture capital funds. We start with a hand-collected dataset of litigation against venture capitalists (VCs) that provides significant shocks to the reputation of VCs. We combine that information with detailed data on limited partner investments in VCs provided by LP Source and test whether PPFs respond differently to the litigation shocks compared to other types of limited partners. Our triple-difference framework reveals that VCs who were defendants in lawsuits suffer a significant subsequent decline in investment by university endowments and several other types of institutional investors, but experience an increase in the investment share of PPFs. Pension funds are about three times more likely to re-invest in post-lawsuit funds offered by litigated VCs. The additional pension fund investments thus partially compensate for the shortfall in post-lawsuit fundraising caused by the exodus of other investors. Our results indicate that the investment choices of PPF managers reduce the effectiveness of reputational penalties imposed by other limited partners in venture capital funds.

The Scenario of Increasing Tax Revenue and Direction of Economic Growth Riau Province Region, A Short Term Economic Analysis

A study has been conducted in Riau Province in 2016 - 2018. One of the objectives of this research is to provide alternative policies for the regional government of Riau Province to encourage regional economic growth. The system of simultaneous econometric modeling is used and estimated by the method of Two Stage Least Squares and SIMNLIM method for simulation using 33 years time series data (1984 - 2016). The results showed that the alternative policy of increasing 10% tax revenue increased local revenue by 8.32% and government expenditure by 0.43%. Conversely, an increase in tax revenues has an impact on reducing public consumption by 0.10%, which in turn decreases RGDP by 0.01%. However, the decline in RGDP did not contribute to the decline in investment. The accumulated impact of the decline in consumption and the increase in private investment caused public savings to increase by a relatively small 0.03% so that the interest rate dropped 0.27%. The impact of the decline in RGDP caused the demand for money to decline by 0.04%. Keywords: tax revenue, the impact of change, regional economic growth, economic fluctuations, short term

Risk-Sharing and Investment in Concentrated Markets

We study the macroeconomic consequences of financial market concentration in a complete markets economy with production. We propose a theory in which differences in preferences, productivity, and risk exposure generate gains from trade, but these gains are not fully realized because some large agents internalize their impact on asset prices. In equilibrium, risk-sharing is incomplete and rents from strategic trading feed back into the real economy by distorting the marginal value of production. Along with an increase in valuations, the model can generate a joint decline in investment, productivity, risk-free rates and the market risk premium. Welfare losses from strategic trading can be measured using asset market data, and are largest in the deepest markets.

Tackling Europe’s infrastructure needs: the European Fund for Strategic Investments

This paper focuses on Europe's response to the slow pace of recovery following the 2008 economic crisis. There was a 15% decline in investment in key economic sectors, including strategic infrastructure. Potentially good but higher risk projects were struggling to find investment. Money was available in the system, but economic uncertainty was stopping investors from taking risk. To address this market failure, the European Union (EU) developed an Investment Plan for Europe (IPE), popularly referred to as the Juncker Plan.1 The IPE comprises a three-pronged strategy the key pillar of which is the establishment of a guarantee fund, the European Fund for Strategic Investment (EFSI). EFSI is designed to overcome the perceived market failure by mitigating project risk and mobilising private investment to address market gaps.2 It is a simple but powerful financial instrument that seeks to put investment capital back to work and exploit the opportunity to address Europe's infrastructure needs while borrowing costs are low and liquidity relatively plentiful for eligible projects. The paper discusses the theory behind the policy, how it contributes to delivery of the EU's commitment to sustainable development as embodied in its 2020 Strategy, and whether it is supported by academic economic consensus.

Financial Stability Effects of Foreign-Exchange Risk Migration

When firms trade forward contracts with banks to protect foreign currency cash flows against exchange rate movements, foreign exchange risk migrates to the banking sector. We show how this migrated risk may induce systemic repercussions with severe implications for the real economy. For identification, we exploit the Brexit referendum in June 2016 as a quasi-natural experiment in combination with detailed microdata on forward contracts and the credit register in Germany. Before the referendum, firms substantially increased their use of derivatives in response to the heightened uncertainty; banks, in providing these contracts, did not fully intermediate the risk and retained a large share of it on their own books. The depreciation of the British pound in response to the referendum’s outcome posed a shock to the capital of ex-ante exposed banks. Banks, especially weakly capitalized ones, absorbed these losses by cutting back credit to all firms, including those unlikely to have had any exchange rate exposure to begin with. Firms that had ex-ante borrowing relationships with banks facing losses experienced a larger reduction in credit and a greater decline in investment compared with their industry peers, thereby contributing to the aggregate investment contraction. We also find these effects to be more pronounced for small firms, which is consistent with credit market frictions being rooted in asymmetric information problems.

United States

Real GDP grew at a robust 3.4% annualized rate in Q3 2018, following even stronger 4.2% annualized growth in Q2. A strong gain in consumer spending was partially offset by the weakest increase in business investment in nearly two years and a third straight quarterly decline in residential investment. In a reversal from Q2, net trade exerted a 2.0 ppt drag in Q3. Real GDP is now trending at a very solid 3.0% y/y – the fastest pace since early 2015.

Debt Overhang, Rollover Risk, and Corporate Investment: Evidence from the European Crisis

We quantify the role of financial factors behind the sluggish post-crisis performance of European firms. We use a firm-bank-sovereign matched database to identify separate roles for firm and bank balance sheet weaknesses arising from changes in sovereign risk and aggregate demand conditions. We find that firms with higher debt levels and a higher share of short-term debt reduce their investment more after the crisis. This negative effect is stronger for firms linked to weak banks with exposures to sovereign risk, signifying increased rollover risk. These financial channels explain about 60% of the decline in aggregate corporate investment.

Crude oil price shocks and macroeconomic performance in Africa’s oil-producing countries

The study investigates the influence of crude oil price shocks on the macroeconomic performance of Africa’s oil-producing countries. Eight major net oil producers, namely, Algeria, Nigeria, Egypt, Angola, Gabon, Equatorial Guinea and Congo Republic are included in the study. Sudan is excluded due to data constraints. The study covers the period between 1980 and 2016, which represents the periods with the most boom and bust movements in crude oil prices. The Hamilton Index (1996) which uses the net oil price increase is applied. The study compares the price of oil in each quarter with the maximum value observed during the preceding four quarters. This is used to derive sharp increases and declines in oil prices to capture oil price shocks. A Panel Structural Vector Auto-Regression model is adopted for analysis. The results show that the reaction of output to sharp increases and declines in oil prices differ. It is also observed that structural inflation accompanies sharp declines in oil prices more than monetary inflation, since both outputs and investment decline significantly.

RESEARCH OF THE MARKET STRUCTURE OF RUSSIAN CORPORATE BONDS (EXAMPLE OF THE FUEL AND ENERGY COMPLEX AND HEAVY INDUSTRY)

An important direction for the stabilization of economic development is the existence of effective mechanisms for attracting financial resources by business entities. Due to its investment capacity, Russia’s corporate securities market plays an important role in the financial system of the state. The need for economic recovery (after crisis, military-political, sanction and other force majeure circumstances) also requires the widespread use of corporate securities as equity capital raising instruments. The formation of the corporate securities market enables the financing of the needs of economic entities in the three institutional sectors – financial, non-financial corporations and households. In spite of the importance of access to financial resources of contractors of all institutional sectors, financing of the sector of non-financial corporations (enterprises-subjects of the real sector of economy) in today’s conditions determines the rates and proportions of economic development. Enterprises – market participants decide the issue of attracting the necessary resources through the issue of various equity and debt corporate securities. This determines their investment position in capital markets and, at the same time, reveals the ability to use the investment potential of the corporate securities market.In this regard, the article deals with the peculiarities of the formation of the market for Russian corporate bonds. Various indexes of corporate bonds of the Moscow Stock Exchange are considered. A detailed analysis of the placement of corporate bond loans in the sectors of the fuel and energy industry and heavy industry has been conducted. The main dominant industries, attractive for investors in recent years, as well as branches in which the investment decline is observed, are revealed.The conducted researches can serve as the basis for the development of practical recommendations for improving the efficiency of the functioning of the corporate securities market.

Household debt, financial intermediation, and monetary policy

The collapse of housing prices in the U.S. during the Great Recession eroded not only consumers’ housing wealth but also the assets held by the banking sector. I introduce a micro-founded banking sector to a standard DSGE model with household debt to study the interaction between housing prices, household debt, and banks’ balance sheet positions. I estimate the model using US data from 1991Q1 to 2014Q1 and find that there is a significant spillover effect from the housing market to the rest of the aggregate economy. The spillover effect is mainly evident on investment through the banking sector. A negative shock to housing demand or to the perceived riskiness of assets backed by housing wealth decreases the banks’ net worth. As a result, both mortgage and corporate spreads rise, leading to a decline in aggregate investment. I also find that an unconventional monetary policy is more effective in dampening the downturn when it targets the assets backed by housing wealth.