Investment Efficiency Research Articles

Comprehensive intellectual property ability and firm productivity: A quasi-natural experiment based on national intellectual property demonstration advantage firm policy in China.

Intellectual property is crucial for the development of firms. At the micro level, firm comprehensive intellectual property ability involves abilities about intellectual property creation, utilization, protection, and management. In order to develop the comprehensive intellectual property ability of firms, the China National Intellectual Property Administration began to implement the national intellectual property demonstration advantage firm (NIPDAF) policy in 2013. Based on this exogenous policy shock, using data from listed companies from 2011 to 2020 as the research sample, the time-varying DID method is used to test the impact of the NIPDAF policy intended to cultivate comprehensive intellectual property ability on firm productivity. The results show that after policy implementation, the total factor productivity of NIPDAFs increased by about 3.3% compared to the control group. This finding is robust after a series of tests. Furthermore, the NIPDAF policy promotes firm productivity through stimulating technology innovation, improving investment efficiency, and enhancing competitive advantage. In addition, the NIPDAF policy has a more significant incentive effect on the total factor productivity of non-state-owned enterprises, firms in the eastern region, and firms in patent intensive industries.

A decision support system for localized planning of reclaimed water around wastewater treatment plants.

Exploding population, industrialization, and an increase in water pollution has led to acute shrinkage in freshwater availability. Numerous countries have started exploring municipal wastewater as a new potential source of water to bring a paradigm shift from linearity to obtaining circularity in human water cycle management. This study aims to develop a decision support system for integrated water and wastewater management (DSS_IWWM), targeted towards reuse-focused selection of appropriate wastewater treatment technology, and localized planning around STPs in terms of reclaimed water demand identification, estimation, allocation, and sustainable pricing. The developed DSS_IWWM comprises of a repository of fourteen reuse purposes, reuse quality criteria, and 25 wastewater treatment technologies (WWTTs) in 360 combinations. It is sensitive to local resource scenarios and applies a socioeconomic and technology-focused methodology for addressing the interests of the community and investing agencies and viably. To validate the application of the DSS_IWWM, it is first tested with data from three cities in the state of Uttar Pradesh (India)-Lucknow, Prayagraj, and Agra-and then extended to nine more Indian cities with varying influent quality characteristics, resource inputs, existing STP technologies, and same target quality and decision criteria prioritization, to present a comparison of appropriate WWTTs and associated average prices obtained in different scenarios. It is concluded that influent quality, existing technology, and target quality criteria play significant role in selection of appropriate WWTTs. The traditional technologies such as UASB and ASP are required to be augmented and supplemented with high-performing WWTTs, such as BIOFOR-F with (C + F + RSF) and SBT + WP to obtain desired effluent quality. High-performing advanced oxidation process (AOP)-based systems such as A2O, SBR, and BIOFOR-F require WWTTs with relatively lower average costs (such as SBT and OP). The developed DSS_IWWM may prove to be very useful and beneficial for policymakers, government officials, engineers, and scientific community as it will facilitate rational decision-making for efficient investment planning in reuse focused wastewater treatment towards achieving circular economy in sustainable water resource management.

The relationship between financial reporting quality and investment efficiency in companies listed on Egyptian stock exchange: An Empirical Study

the relationship between financial reporting quality and investment efficiency in companies listed on Egyptian stock exchange: An Empirical Study

Analysis of the impact of managers' psychological deviation on information disclosure and irrational overseas investment after IFRS convergence

Based on a sample of 6485 firms listed on the Chinese Shanghai and Shenzhen A-shares between 2017 and 2021, the effect of managers' psychological deviation on irrational investment is empirically tested. The higher the managers’ confidence, the lower the investment efficiency. The level of irrational investment in listed companies increases with the degree of managers’ risk appetite. The improvement of disclosure quality of enterprises after IFRS convergence in China can weaken irrational investment triggered by managers' overconfidence. The information disclosure quality by companies can manage the irrational investment behavior that is exacerbated by the high degree of managers’ risk appetite.

Determinants of bank efficiency in developed (G7) and developing (E7) countries: role of regulatory and economic environment

AbstractEfficiency is one of the key factors promoting the long-term performance and sustainability of the banking industry. In this context, this paper investigates the implications of the regulatory environment, macroeconomic factors, monetary conditions, and uncertainty for the banking sectors’ operating as well as investment efficiencies. Using data from G7 and E7 countries from 2001 to 2020, we employ a set of empirical techniques, including Fixed Effects, Random Effects, Panel Fully Modified Least Squares, Panel Dynamic Least Squares and Generalized Method of Moments. Our key findings show that leverage, capital adequacy, monetary conditions, economic growth, price stability as well as exchange rate stability and uncertainty have substantial effects on bank efficiency, with notable differences between impact on operational and investment efficiencies and developed (G7) and developing (E7) economies.

Post-Pandemic Natural Gas Utilization in Trinidad and Tobago: A Sectoral Analysis (2020–2023)

This paper examines the impact of post-pandemic shifts on natural gas utilization in Trinidad and Tobago, one of the largest producers of liquefied natural gas (LNG) in Latin America and a significant exporter of ammonia and methanol. Employing a qualitative analysis supplemented by Granger Causality tests, the study analyzes the changes in natural gas demand across key sectors from 2020 to 2023. The findings reveal substantial volatility in natural gas prices post-COVID-19, influenced by global events that have heightened the sensitivity of Trinidad and Tobago’s economy to international market dynamics. With the nation at the crossroads of diversifying energy sources and addressing climate change imperatives, the study suggests strategic investments in renewable energies, energy efficiency, and technological upgrades. The research highlights the economic benefits of using natural gas for petrochemical production over electricity generation and points to the resilience offered by the diversity in the petrochemical export market, contrasted with the concentrated LNG export market. The study concludes with a call for integrated policy planning and an accelerated energy transition, advocating for a sustainable and resilient energy sector aligned with global climate goals.

Do the relationship paths between capital structure and investment efficiency depend on information asymmetry? A comparison between emerging and developed countries

ABSTRACT This paper aims to analyze the moderating role of debt maturity and the mediating role of information asymmetry in the relationship between financial leverage and investment efficiency and to compare the results between firms domiciled in emerging and those headquartered in developed countries. Using two proxies for investment efficiency, the results showed that debt maturity moderates the association between financial leverage and investment efficiency at both levels of developed and emerging countries. This paper also confirmed that information asymmetry carries the influence of financial leverage to investment efficiency only for those enterprises headquartered in emerging countries.

Site Visits and Corporate Investment Efficiency

Site Visits and Corporate Investment Efficiency

Accounting background and cross-membership effects on investment efficiency in Islamic banks: a study of Islamic Supervisory Board members

Purpose This study aims to examine the joint effect of accounting background and cross-membership of Islamic Supervisory Board (ISB) members on bank investment efficiency. Design/methodology/approach This study uses data collected from 36 Islamic banks across 15 countries globally, spanning the period from 2012 to 2021. This research uses an ordinary least squares regression and a comprehensive set of endogeneity and robustness tests. Findings The findings show a negative relationship between the accounting background of ISB members and investment efficiency. However, when ISB members with accounting backgrounds also have ISB cross-memberships, the banks exhibit high investment efficiency. These results suggest that ISB cross-membership plays a crucial role in facilitating Islamic banks’ access to timely information on investment opportunities. This enables ISB members with accounting expertise to thoroughly assess the benefits and risks associated with their investment prospects. These findings imply that ISB members with accounting backgrounds and cross-memberships have greater motivation and thoughtful considerations for making better investment decisions. Consequently, Islamic banks are better positioned to undertake high profitable investment projects, which enhance their investment efficiency. Practical implications The current study holds immense value for Islamic bank management in their selection of ISB members who possess an accounting background and cross-membership. Originality/value This study delves into a comprehensive investigation of the proficiency, underlying principles and unique characteristics exhibited by ISB members with an accounting background. Moreover, this study acknowledges the burgeoning global prominence of Islamic banks.

Does employee ownership improve labour investment efficiency? Evidence from European firms

This paper studies the impact of non-executive employee ownership on labour investment efficiency for a sample of European firms. It empirically documents a negative association between employee ownership and labour investment inefficiency, which serves an inverse measure of labour investment efficiency. This negative association is notably more pronounced for firms reporting higher discretionary accruals in their financial statements (i.e. firms with higher information asymmetry) and for those with a lower percentage of independent directors (i.e. firms with greater agency problems). As such, this paper offers evidence that employee shareholding enhances employment decisions through two channels: reduced information asymmetry and improved management monitoring.

Big data application and corporate investment decisions: Evidence from A-share listed companies in China

Based on a natural language processing (NLP) method and annual reports from A-share listed companies in China from 2011 to 2020, this paper constructs a big data index for the corporate level and studies the impact of big data on corporate investment decisions. The study finds that big data significantly improves corporate investment decisions. From the perspective of index decomposition, data mining and mobile service are found to significantly improve corporate investment efficiency, while algorithm development and intelligent manufacturing mainly enhance the corporate investment level. The study also notes that heterogeneity may exist due to differences in financial, innovation, and legal environments. In terms of mechanisms, big data can positively influence corporate investment decisions by improving R&D investment and reducing transaction costs.

Theoretical and run-test investigation on a 50 MW beam-down concentrating solar power plant in China

The beam-down concentrating solar power plant has the advantages of high concentrating ratio, low installation and maintenance requirements, and low pump consumption. To conduct further theoretical and run-test evaluations of the optical and thermal performance of the beam-down concentrating solar power system, the Yumen Xinneng 50 MW beam-down power plant is analyzed in this research. The variation of the heliostat field efficiency, hyperboloid mirror flux density, receiver flux density, and annual power generation under various operating parameters is discussed. The run-test results from June 12th indicated an average outlet temperature of molten salt reached 559°C between 13:07 and 13:56 under an average direct normal irradiation of 739.7 W/m2. The corresponding inlet temperature increased from 302.3°C to 307.6°C due to the rewarming effect caused by the increase in hot molten salt. Regarding the simulation results, the recommended design parameters for the vertex ratio of the hyperboloid mirror are between 0.775 and 0.8 to mitigate the contradiction between initial investment and optical efficiency. The maximum values of cosine efficiency, shading and blocking efficiency, shading efficiency of the hyperboloid mirror, and attenuation efficiency for the heliostat field are 85.56%, 99.96%, 99.35%, and 97.46% on June 1st for the maximum solar elevation angle of 70.72°. Consequently, the maximum values of the average hyperboloid mirror flux density and receiver flux density are 11.2 kW/m2 and 399.1 kW/m2 on June 1st. The maximum power generation for a 7-day period is 4674.22 MWe in June with a duration time of 100 hours. This paper can further expand research on the comprehensive performance of beam-down power plants.

The impact of environmental regulation on green investment efficiency of thermal power enterprises in China-based on a three-stage exogenous variable model

Due to the increased frequency of extreme weather events and the implementation of the China’s dual-carbon target, thermal power companies have been under pressure to construct green infrastructure and to actively pursue low-carbon transformation in response to stricter environmental regulations. This research thus selects 30 listed thermal power enterprises in China as study objects and assesses their green investment efficiency in the low-carbon transition process using three-stage DEA evaluation model with environmental regulation as an exogenous variable. Based on this, a benchmark regression model is used to corroborate the relationship between environmental regulation and green investment. Simultaneously, we carry out analysis to compare the correlation between thermal power firms’ green investment efficiency and their focus on green investments. The results show in terms of total efficiency that environmental regulation significantly improves the total efficiency of 80% of thermal power enterprises compared to the absence of this exogenous variable. With the addition of environmental regulation, firms’ total efficiency declines gradually in general from 2018 to 2022, with the mean value of efficiency falling by 0.068. In terms of stage-specific efficiency, the efficiency of the green investment stage of the majority of firms is between 0.3 and 0.6, which is much lower than that of the operational stage and the market performance stage. In terms of sub-indicator efficiency, both green investment efficiency and social donation efficiency among thermal power enterprises show obvious polarization, with 30% of them having an efficiency of 1 and 30% less than 0.1. In terms of green investment focus, thermal power unit renovation has a more obvious role in boosting the green investment efficiency of thermal power enterprises than do wind power and photovoltaic projects. Therefore, both governmental departments and thermal power enterprises need to take active measures in order to achieve green transformation from the perspective of green investment efficiency. Through the segmentation of important projects of green investment, this paper provides a reasonable investment direction reference for the sustainable transformation of China’s thermal power industry. It also provides a rich and novel theoretical basis for the Chinese government to further improve the relevant environmental protection laws and regulations of thermal power industry.

Does corporate governance affect investment efficiency of Indian firms? Panel evidence from new governance indices

AbstractThis study examines the effects of corporate governance (CG) on investment inefficiency for 506 Indian listed firms. Using new stipulations of CG and globally recognized governance practices, an overall corporate governance index (CGI) and five sub‐indices such as board index (BINDEX), audit index (AINDEX), ownership index (OINDEX), nomination and remuneration index (NRINDEX), and disclosure index (DINDEX) were constructed. Employing newly developed governance indices along with firm‐specific control variables, several pooled regression models were estimated. Robustness checks were conducted using two‐step system GMM and an alternate measure of managerial investment efficiency. The pooled estimated coefficient of CGI and sub‐indices (except OINDEX) on investment inefficiency, overinvestment and underinvest is found to be negative and significant suggesting that effective/robust governance at firm level reduces investment inefficiencies (improves investment efficiency) through effective supervision and monitoring thereby reducing the opportunistic behavior of managers.

FACTOR ANALYSIS AND COST CALCULATION OF SOLAR ENERGY IMPLEMENTATION IN AVIATION MAINTENANCE, REPAIR & OVERHAUL (MRO)

Background: The global imperative to address climate change has heightened awareness of sustainable practices across industries. Emissions from the aviation industry contribute significantly to global warming, with Maintenance, Repair, and Overhaul (MRO) activities contributing to aviation emissions. Hence, efforts are needed to reduce emissions by transitioning from fossil energy to renewable energy. Methods: Used pairwise comparisons among seven factors was conducted by collecting data using structured interview from 15 expert respondents, comprising staff, managers, senior managers, and directors from five major Aviation MRO facilities in Indonesia equipped with hangar facilities. The respondents were selected based on their expertise and experience in the Aviation MRO industry. Following the structured interview, life cycle cost calculations were performed to compare the use of electricity from the national grid (PLN), leased Solar PV, and purchased Solar PV. Results: Findings revealed positive acceptance across Technical Awareness, Economy, Environment, and Policy aspects in the first structured interview section. Then provided insights into respondents' priorities, with Cost, Lifecycle, Environmental Impact, Government Support, Capacity, Quality, and Payment Scheme ranked in order of importance in selecting electricity energy sources. Additionally, life cycle cost calculations demonstrate significant cost efficiency in both investment and leasing schemes for solar photovoltaic installation, highlighting the industry's potential contribution to emissions reduction. Conclusions: Integrating renewable solar energy into hangar operations presents an opportunity for the MRO industry to enhance business efficiency while advancing environmental sustainability. Government support and incentivization are essential to encourage broader adoption of renewable energy initiatives within the Aviation MRO sector.

The Impact of Platform Information Sharing on Manufacturer’s Choice of Online Distribution Mode and Green Investment

In this study, we consider a dual-channel supply chain structure where a manufacturer invests in green products and distributes them to green-conscious consumers through an offline retailer and an online platform. The manufacturer has the flexibility to choose sales via either a wholesale mode or an agency selling mode on the online platform channel. The platform can obtain private information and decide whether to share it with the manufacturer. This study investigates the strategic interaction between the green manufacturer’s decision to use an online sales mode and the online platform’s strategy for information sharing. Our analysis reveals that under the wholesale price mode, the platform is willing to share demand information only when the manufacturer exhibits high investment efficiency. In contrast, under the agency selling mode, the platform always shares demand information regardless of the level of investment efficiency. Nevertheless, the manufacturer is discouraged from opting for the agency selling mode due to the higher commission rate. Interestingly, we observe that when the value of information is sufficiently high, the manufacturer still tends to prefer the agency selling mode, despite the added cost of the higher commission fee. Additionally, the offline retailer always benefits from the information sharing conducted by the online platform. Finally, our extended model indicates that the timing of information-sharing decisions has a significant impact on the manufacturer’s choice of mode.

How business environment of countries along the Belt and Road impacts China’s OFDI efficiency: a stochastic frontier gravity model approach

The Belt and Road Initiative (BRI) provides a new opportunity for the continued deepening of economic and trade cooperation between China and countries along the BRI route. However, different business environments among countries have led to the problem of a low and uneven distribution of China’s overall trade and investment efficiency in the countries along the route. Using the stochastic frontier gravity model, this study evaluates the efficiency of China’s outward foreign direct investment (OFDI) based on the data of 47 countries along the Belt and Road route from 2013 to 2019. The empirical results indicate that the efficiency level of China’s OFDI in countries located along the Belt and Road route is 43.39%, which suggests a regional imbalance. In terms of business environment factors, regulatory governance, civic discourse, government accountability, and regulatory quality in host countries have a positive impact on China’s OFDI. The positive effects of the BRI have enabled Chinese enterprises to better face factors such as political instability, corruption and imperfections in the legal system when investing abroad. The findings and suggestions could help the governments and enterprises of the countries along the route improve the business environment in a more targeted manner, enhance the space for economic and trade cooperation, and promote the common development of the countries along the route.

A study of production outsourcing strategies of dual oligopoly manufacturers based on quality investments

Introduction: Self-production and outsourcing are two important production strategies for manufacturers, and the production capacity and investment capacity of manufacturers and suppliers play a decisive role in the quality of products. This study aims to analyze the manufacturer’s best production strategy and the drivers of outsourcing in the context of quality.Methods: This study constructs production outsourcing game models for duopoly manufacturers, examines the trade-offs between self-production and outsourcing when suppliers have the ability to invest in quality, explores the requirements and implications of outsourcing and compares the differences between “one-to-one” and “one-to-many” outsourcing structures.Results: First, outsourcing can reduce the level of product quality and that a necessary condition for manufacturers’ outsourcing is a strong advantage in the supplier’s production costs. Second, duopoly manufacturers may face a prisoner’s dilemma as a result of outsourcing. Finally, compared to two independent suppliers, outsourcing to a common supplier can increase the level of product quality by exploiting the centralization effect and increase the firm’s profits when the market’s competition intensity is low.Conclusion: First, the production strategy balance of duopoly manufacturers is closely related to the outsourcing structure, production efficiency and investment efficiency. Second, duopoly manufacturers choose outsourcing may fall into the prisoner’s dilemma, and outsourcing has the risk of quality reduction.

Managerial Compensation, R&D Investment, and Operating Efficiency in Taiwanese Listed Companies: The Moderating Effects of Firm Size and Corporate Risk

Our study explores how managerial compensations are associated with both R&D investment and operating efficiency, which are pillars of competitive advantage for Taiwanese listed companies. Additionally, it investigates how firm size and corporate risk moderate this relationship. Our study’s findings validate these two hypotheses, revealing a positive correlation between managerial compensation and both R&D investment and operating efficiency. Moreover, we observe that firm size enhances this connection, while corporate risk acts as a weakening factor. These results indicate that managerial compensation in Taiwanese companies is crafted with consideration for both immediate financial performance and enduring contributions to company development. The study contributes contemporary evidence on the interplay between factors fostering long-term competitive advantages and the structures of managerial compensation. JEL Codes: G32, M12

Foreign direct investment and ecological efficiency in Pakistan: a new perspective on the pollution haven hypothesis

Foreign direct investment and ecological efficiency in Pakistan: a new perspective on the pollution haven hypothesis