Equity Funds Research Articles

An insight into return performance of ESG thematic equity funds in the Indian mutual fund market: A comparative analysis

An insight into return performance of ESG thematic equity funds in the Indian mutual fund market: A comparative analysis

Visualization Support System for Optimizing Parameters in Automated Search of Thematic Equity Funds

Visualization Support System for Optimizing Parameters in Automated Search of Thematic Equity Funds

Equity Financing Potential for Leading R&D of Small and Medium-Sized Biomedical Corporations

From the perspective of small and medium-sized innovative biomedical enterprises, this study conducts a comprehensive analysis of the corporate financing capacity during the equity financing process, aiming to provide valuable insights for the successful implementation of equity financing. The study involved the distribution of a total of 400 questionnaires to Chinese venture capital institutions and SMEs of innovative drug R&D, followed by statistical analysis of the questionnaire data results. In light of the challenges faced by these enterprises during the equity financing process, such as inadequate attention to financing business plans, neglect of financing roadshows, insufficient financing expertise, reliance on single financing approaches or channels, lack of meticulous capital partner selection and enterprises raise capital prematurely, this study proposes several countermeasures. These include prioritizing the financing business plan, emphasizing the importance of the financing roadshows, adopting a diversified financing approach, and objectively determining the optimal entry point for the financing stage. Venture capital can effectively address the financing bottleneck faced by small and medium-sized innovative biomedical enterprises, thereby serving as the optimal financing channel. Not only that, but also can effectively address the bottleneck issues associated with equity financing for small and medium-sized innovative biomedical enterprises and play a pivotal role in the field of innovative drug research and development (R&D). By fostering the development of more efficient novel drugs, it can significantly contribute to the robust growth of China's biomedical industry.

ESG PERFORMANCE, DEBT EQUITY CHOICES, AND RAPID ADJUSTMENTS IN INDONESIA

Previous research has explored the relationship between sustainability performance and firm performance; however, there is a noticeable scarcity of studies addressing the intricate connection between sustainability performance and firm financing. This study aims to bridge this gap by investigating how sustainability performance impacts firm financing decisions and capital structure adjustment in the context of Indonesia. Leveraging Environmental, Social, and Governance (ESG) performance data specific to Indonesia, this research contributes novelty to financing choices and the speed at which firms adjust their leverage. Through a combination of fixed-effect modelling and dynamic panel Generalized Method of Moments (GMM), the study employs a dataset containing 506 firm-year observations, evenly distributed between ESG firms and non-ESG firms. The findings demonstrate that firms that incorporate ESG principles into their operations display a greater inclination towards equity financing. Additionally, the research underscores that ESG firms exhibit a more rapid adjustment pace toward their target leverage ratios compared to non-ESG firms.

Fear of COVID-19 and Financial Sector of Tadawul Stock Exchange

The objective of this study is to analyse the effect of the COVID-19 outbreak on the financial sector's equity returns, specifically focusing on Sukuk & Bonds (TSBI), Diversified Financials (TDFI), Banks (TBNI), Insurance (TISII), and the Tadawul All Share (TASI) Index. This will be done through the utilisation of t-test and event study technique. The event will take place from December 2018 to March 2020. The estimation period covers the time frame from December 2018 to December 2019. The pre-announcement phase of the WHO notice spans the month of January 2020, while the post-announcement phase encompasses February 2020 to March 2020. The study suggests that, prior to the alarm given by the WHO, the majority of the financial sector exhibits positive returns, with the exception of Banks. The results validate the substantial and adverse influence of the COVID-19 epidemic on Diversified Financials (TDFI), Banks (TBNI), and Insurance (TISII) following the global alert notice by the World Health Organisation (WHO). The study indicates that the Sukuk & Bonds (TSBI) sector has remained unaffected by the epidemic and has shown a favourable influence on returns. This industry provides a fixed interest rate and does not influence the expectations of investors. Saudi Arabia's government announced a stimulus package of $18.7 billion on March 20, 2020. The adverse consequences suggest that the policymakers failed to foresee this issue and did not take timely action. This study recommends that effective policies must be designed by the policymakers in anticipation of such pandemic outbreak that may help the investors to devise diversification strategies.

Struktur Modal dan UKM : A Systematic Literature Review

This systematic literature review (SLR) aims to provide a comprehensive overview of the existing research on the impact of capital structure on small and medium-sized enterprises (SMEs). The study synthesizes and analyzes findings from various studies to identify key trends, gaps, and areas for future research. The SLR covers factors influencing SMEs' capital structure decisions, including internal factors like company size, profitability, and growth opportunities, and external factors such as market conditions, industry characteristics, and regulatory environment. Our findings reveal that the capital structure significantly affects SMEs' financial performance and sustainability. Debt financing offers growth potential but increases financial risk, while equity financing provides stability and reduces risk but dilutes ownership. The optimal mix of debt and equity varies based on specific SME characteristics and external conditions. Additionally, the capital structure influences SMEs' ability to attract external financing and impacts their overall growth and profitability. The review also highlights the need for more focused research on the determinants of capital structure in SMEs, the role of external financing sources, and the relationship between capital structure and firm performance over time. Longitudinal studies and investigations into macroeconomic factors' impact on SMEs' capital structure decisions are recommended for future research.

Unlocking the power of roots: Local CEOs and corporate maturity mismatch

This paper investigates the impact of local CEOs on corporate maturity mismatch. We find that local CEOs can significantly mitigate the issue of corporate maturity mismatch, mostly by resolving agency conflicts, boosting information disclosure, and alleviating financial constraints. Furthermore, the positive impact of local CEOs is particularly pronounced in non-state-owned enterprises, growth stage firms, and innovative industries. Further analysis suggests that increasing equity financing capacity and combining industry and finance significantly improves the effect of local CEOs on maturity mismatch, whereas debt pressure from local governments crowds out bank financing space, significantly suppressing the role of local CEOs.

Gambling preferences and fund company ownership: Evidence from China

This paper empirically tests the preference of China's public mutual funds for lottery-type equities, analyzing data from equity funds in the country's public mutual fund market from 2005 to 2022. The study finds that this gambling preference positively correlates with short-term fund performance, but negatively impacts long-term outcomes. Further investigation shows that the funds' propensity for gambling increases stock market volatility. However, fund company ownership can mitigate this risk amplification by implementing a risk-sharing structure. Additionally, a significant positive correlation exists between the mutual fund industry's gambling inclination and fund managers' optimism about future market movements. Finally, this article employs text analysis to explore the influence of gambling preferences from a non-quantitative information perspective, which helps control the investing behavior of institutional investors and enhances the real economy's access to the capital market.

School facility funding inequities: an assessment of California

ABSTRACT In this paper, we contribute to the literature on school facility funding by examining California’s facility funding formula and assessing how the current state system facilitates meeting annual investment standards in facility stewardship and upkeep. To do this, we quantify the total school square footage of school facilities and then calculate the current replacement value (CRV). For our analysis, we adhere to industry standard benchmarks of 3 percent of CRV for maintenance & operation (M&O) and 4 percent of CRV for capital renewal. Overall, we find California school districts fail to adequately and equitably invest in school facilities upkeep leaving more than half of students attending subpar school facilities. Additionally, we show that nearly forty percent of school districts do not have enough taxable property wealth to raise capital funds. Looking ahead, educator leaders must prioritize equalizing school facility funding formulas to reduce educational funding inequities between school districts.

Mergers and acquisitions with private equity intermediation

We develop a search model of mergers and acquisitions (M&A), intermediated by private equity (PE) funds which may face pressure to sell. The selling pressure leads to the development of a secondary buyout (SBO) market, enabling PE funds to bail each other out. Interestingly, an increase in the number of PE funds can improve each fund’s value, because the enhanced benefits of SBOs can prevail over the reduction in value from narrower buy-sell spreads due to more intense competition. We calibrate the model using data for the US middle market and find that PE funds could lose 64% of their valuation without SBOs. Moreover, the increase in the number of funds from 2000 to 2017 contributes to a 48% increase in fund valuation due to the complementarity among funds. Nevertheless, our model predicts that this mechanism might have peaked in 2021, and more PE funds could decrease their value.

OPERATING RISK AND FIRM’S PROFITABILITY: EVIDENCE FROM NON-LISTED MANUFACTURING FIRMS FROM V4 COUN-TRIES

Purpose. This study contributes to the ongoing debate on determinants of firms’ resilience strategies while facing a crisis, by referring to the operating risk. The purpose of our work is to examine the effects of operating risk on profitability of non-listed firms in manufacturing sector. Therefore, our study responds to the literature gap within investigating this problem at sector level, and among smaller firms. Methodology. Our evidence is based on accounting-based data, covering four countries (Poland, Czechia, Slovakia and Hungary) and large number of non-listed firms. We apply WLS (Weighted Last Squared) regression to test two models of the impacts of operating risk on firm’s profitability. Findings. Our results indicate that firms exposed to higher operating risk, tend to be less profitable. While considering cross-effects of operating and financial risk in our model, we found strong and sound evidence that the interplay between operating and financial risk exposure exerts a negative impact on firm’s profitability. These results have important implications, by demonstrating that during the period of crisis firms need equity financing to sustain resilience.

Editorial overview for the themed issue on Geotechnical Engineering Education

This special issue contains fifteen (15) peer-reviewed papers on geotechnical engineering education (Geo-engineering education). The themed issue includes the fundamental and interdisciplinary areas of geo-engineering: geomechanics (soil mechanics and rock mechanics), engineering geology, geotechnical engineering, and environmental engineering. This editorial presents a brief introduction of each article and highlights its key findings, main points, and conclusions. The papers in this issue cover a wide range of Geo-engineering topics in undergraduate curricula. This themed issue brings together articles from different universities and countries with inequalities in research funding for the current and future mutually beneficial exchange of ideas and experiences in Geo-engineering education. While this issue focuses especially on Geo-engineering education, some approaches or strategies presented here have applications to different topics in education and teaching.

Financing a capital-constrained supply chain: Equity or debt

Many retailers are small and medium enterprises (SMEs) with limited access to capital to finance their operations. Here, we consider a supply chain consisting of a capital-constrained retailer and a manufacturer and examine the effect of equity and debt financing schemes on their operational decisions. Using a game theoretical approach, for the risk-neutral scenario, we take expected profit maximization as the participants’ objective to examine the equilibria of their operational and financing decisions. We also examine the condition under which the manufacturer and retailer adopt equity or debt financing to earn additional profits. We find that when the retailer is highly capital-constrained, she benefits from either financing scheme, but the manufacturer prefers to offer equity financing over debt financing. Otherwise, if the retailer is less constrained, debt financing is preferable. We also extend our analysis to risk-averse participants using the conditional value-at-risk (CVaR) criterion. We show that the decreasing monotone property of the order quantity in the wholesale price, known in the risk-neutral setting, no longer holds. Indeed, the relationship depends on the participants’ risk aversion level; if the manufacturer is highly risk-averse, it chooses to provide equity financing to enhance its CVaR performance; otherwise, it offers debt financing. Our findings provide implications for decision-makers in choosing the optimal financing options and making the associated operations and financing decisions when considering risk attitudes.

Stock returns and earnings persistence following equity financing and earnings announcement: Considering managerial characteristics

Stock returns and earnings persistence following equity financing and earnings announcement: Considering managerial characteristics

Women at CNPq – An analysis of possible mechanisms of gender inequality in federal funding for ST&I

Women at CNPq – An analysis of possible mechanisms of gender inequality in federal funding for ST&I

Women at CNPq – An analysis of possible mechanisms of gender inequality in federal funding for ST&I

Women at CNPq – An analysis of possible mechanisms of gender inequality in federal funding for ST&I

Working capital balances and financial policy

A firm's working-capital account balances demonstrate substantial connections with its financial policy. Receivables and inventories are associated with lower asset volatility and higher future cash flow, and correlate with increased leverage. Conversely, payables show a positive association with shareholder return volatility and a negative correlation with future cash flow and are linked to decreased debt levels. In dynamic panel regressions estimated with system Generalized Method of Moments (GMM), a one standard-deviation increase in payables (receivables) is associated with a 0.42 (0.66) standard-deviation decrease (increase) in leverage. Furthermore, higher levels of inventories and receivables are linked with higher firm credit ratings, along with a preference for debt financing over equity issuance, while increased payables are linked with lower credit ratings and a tendency to favor equity financing over debt financing. The QuickPay regulatory shock, expediting payments and reducing receivables' volume and quality, diminished their collateral role and lowered debt sensitivity to receivables.

Financing Challenges and Strategies for Small and Medium Enterprises in China

This study provides a comprehensive analysis of small and medium-sized enterprises' (SMEs) financing in China, highlighting their critical role in the national economy by contributing significantly to GDP, tax revenue, job creation, and exports. Despite their importance, SMEs face substantial financing challenges due to traditional banking systems' risk assessments, leading to a significant financing gap. The COVID-19 pandemic has exacerbated these challenges, threatening the survival of many SMEs. This research explores both traditional and innovative financing channels, including bank loans, equity financing, and digital platforms like Microconnect and Meituan. The difficulties SMEs face are also discussed, such as high loan rejection rates and the limitations of collateral-based financing which often push these enterprises towards high-cost alternatives or limit their access to necessary funds which hinder SMEs’ daily operation. It assesses the role of government policy and inclusive finance in supporting SME financing and examines the effectiveness of current financial support mechanisms while identifying ongoing gaps and challenges. It argues that while digital platforms like Microconnect and Meituan offer valuable insights and solutions, the complexity of China's financing ecosystem and regional disparities present ongoing challenges. The study ends by highlighting the importance of SMEs to China’s economy and the appeal for continued innovation and policy support to improve SMEs financing.

California Bill Would Tighten Oversight on Private Equity Hospital Purchases

No abstract available. Article truncated after 150 words. According to Medscape California lawmakers are considering a bill that would tighten oversight of private equity and hedge fund buyers of hospitals and healthcare facilities (1). Private equity investment in hospitals and physician groups has been under scrutiny in recent months after a slew of high-profile failures, including bankruptcies and hospital closures. California lawmakers have drafted a bill that would require private equity firms and hedge funds to give the state attorney general written notice before purchasing a healthcare facility or provider group. The attorney general would have to approve the transaction. Buyers would also be required to submit written notice to any federal or state agency as required by law within 90 days of the transaction, and the attorney general could extend that period. The bill gives the attorney general the power to halt an acquisition if there is a "substantial likelihood of anticompetitive effects" or if it would …

Analysis of financing strategies for digital technology investment under privacy concerns and competition

Digital technology improves consumption experiences and facilitates manufacturers' production of smart products. However, customer privacy concerns and market competition may negatively affect smart product sales and reduce manufacturers' investment in digital technology, particularly for innovation startups with limited funding. This raises an important question about how financing strategies affect a manufacturer's investment in digital technology under privacy concerns and competition. To solve this problem, this paper considers a supply chain in which two manufacturers sell products through a platform, one of which (M1) produces smart products by committing to investing in standard or premium digital technology and adopting platform financing or equity financing to maintain operations, and the other (M2) produces regular products. Intuition may suggest that decreasing product sales prices can stimulate consumption and increase sales. Surprisingly, we find that the sales prices and quantity of smart products decrease simultaneously with an increase in privacy concerns, in sharp contrast to regular products. Additionally, although low privacy concerns can encourage M1 to invest in premium digital technology to attract consumption and adopt equity financing to save investment costs, we find that, interestingly, the manufacturer may invest in standard digital technology through platform financing, particularly when the marginal technology utility is moderate. Finally, we find that for either standard or premium digital technology investments, platform financing can help participants achieve a triple-win result, whereas equity financing cannot. Our research provides insights into the interactions between financing strategies and digital technology investments in the context of customer privacy concerns and market competition.