Equity Funds Research Articles

Intellectual Capital Strategy in Increasing the Financial Performance and Empowerment of BUM Desa in Indonesia

Intellectual capital is an intangible asset consisting of knowledge and networks, which are believed to increase economic added value in the business. In the context of the enactment of Undang-Undang No. 6 tahun 2014 concerning villages, BUM Desa has an important role as an economic institution at the village level which is expected to become one of the main pillars of economic development. This study aims to identify and measure the extent to which intellectual capital is present in BUM Desa, and also to analyze the impact of the relationship between this intellectual capital and the financial performance of BUM Desa. The study was carried out by BUM Desa in Tambang District, Riau Province, as a case example. Intellectual capital measurement was carried out through a Likert scale analysis, while financial performance was measured through the ability of BUM Desa to generate profits and control costs. A descriptive approach was used to describe the relationship between intellectual capital and financial performance. The results of the study show that the intellectual capital of BUM Desa is formed from three main dimensions – structural capital, relational capital, and human capital. BUM Desa is able to generate profits from assets that are more efficient than equity funding and can reduce costs to maximize profits. Keywords: human capital, intellectual capital, financial performance

Policy, system and service design influence on healthcare inequities for people with end-of-life chronic obstructive airways disease, their support people and health professionals

BackgroundPeople with end-of-life chronic obstructive pulmonary disease (COPD) experience debilitating physical limitations, with a high mortality rate. Our research has shown health system design and delivery leads to inequitable outcomes. Enabling people with end-of-life COPD, their support people, and health professionals to partner in setting the agenda for resource allocation may inform health service improvement.DesignQualitative methodology utilising focus groups including patients, family, friends, informal support people, health care workers and professionals.MethodsThe analysis, utilising critical theory and Actor-Network theory, positioned people with severe COPD, their support people and health professionals as experts in end-of-life care. Analyses triangulated these perspectives, and were reviewed by the research investigators and an expert reference group.ResultsParticipants (n=74) in seven focus groups reported their experiences of inequity within the healthcare system. Equity was an overarching phenomenon identified by participants, with three specific themes being described: policy design, system design, and service design.ConclusionExperiences of patients, their support people and health professionals as experts in end-of-life COPD care can inform health systems and health service design to address current inequities in funding and delivery of care for end-of-life COPD.

Financial Barriers to Reducing Nitrogen Pollution in Dutch Dairy Farms

SummaryNitrogen fertiliser boosts agricultural yields, but its excessive use destabilises ecosystems. That is why Dutch policy makers want to reduce nitrogen pollution on dairy farms. Cleaner technologies and structural changes could reduce farm emissions. We benchmarked farms, organised an expert consultation, and reviewed the literature to determine the degree to which the lack of available internal and external finance is a barrier to reducing nitrogen pollution. Although the average dairy farm in our sample can finance these investments, a significant share of farmers cannot. We find that investments vastly drain the currently accessible finances available to dairy farmers. Subsidies to reduce the price of investments and measures to increase farm net cash flows could mitigate this problem, while equity funds or preferential interest rate systems would be ineffective. Farm management is not bound by access to finance. Our findings suggest that improved management could vastly reduce the accumulation of nitrogen surplus on farms. Interestingly, we estimate that this can be achieved while increasing profits. The wide‐scale adoption of best practices can be facilitated by establishing and financing advisory services and peer learning programmes to spread knowledge and awareness.

Transformative Dynamics in Private Equity: Exploring Co-investment, ESG Integration and Digitalization Strategies

This paper delves into the evolving landscape of private equity (PE) financing, particularly in the context of the real estate and project development sectors amidst global economic fluctuations and geopolitical uncertainties. With traditional debt financing losing its sheen, the study focuses on the burgeoning role of PE, especially co-investment funds, as a viable financial alternative. Utilizing a rich dataset from reputable sources such as Morningstar, Pitchbook, and the European Central Bank, along with other pertinent studies, the paper presents a nuanced analysis of the declining PE transaction activity in 2023. It highlights how this downturn has catalyzed the adoption of innovative strategies, including the rise of “continuation vehicles” and the increasing significance of co-investments. Moreover, the research offers an insightful examination of the German SME sector, showcasing how PE can be a transformative force. It particularly emphasizes the incorporation of ESG (environmental, social, and governance) considerations and the advancement of digitalization within these enterprises. The study employs a mixed-methods approach, blending qualitative insights with a robust collection of both primary and secondary data. It argues that PE is not merely a financial instrument but a catalyst for meaningful business evolution, enabling German SMEs to effectively respond to current market challenges and undergo essential transformations. This paper aims to contribute to the broader understanding of PE’s role in contemporary business environments, offering valuable perspectives for academics, industry practitioners, and policymakers.

Financing green innovation startups: a systematic literature review on early-stage SME funding

ABSTRACT This paper investigates the critical issue of financing early-stage green startups, examining the types of investors and finance models available, the challenges these startups face, and how the green finance ecosystem can better support early-stage investment. Utilizing a systematic literature review (SLR) methodology, we provide a comprehensive analysis of the current landscape. Our findings reveal a significant paucity of data and a bias towards well-established North American and European ecosystems, while highlighting an emerging diversity in private finance sources post-Global financial crisis (GFC), including grants, equity, and crowdfunding. Despite this, there remains a heavy reliance on public funding and a lack of evidence regarding its impact. The inherent characteristics of cleantech – high capital expenditure, long investment horizons, and disruptive nature – necessitate innovative public financing instruments and policies to reduce risk and attract private investment. Our theoretical contribution highlights the necessity for interdisciplinary research and policy collaboration to develop a holistic entrepreneurial finance (entfin) ecosystem. This approach should integrate quantitative economic and qualitative behavioural finance research to address information asymmetries and improve the green economy policy mix. Such a framework will support public-private co-financing, enhance stakeholder engagement, and provide evidence for policy decisions, facilitating more rapid commercialization of cleantech innovations for environmental sustainability.

Capital structure: Its effects on earnings volatility, cash flows, and financial performance in commercial banks

This study aimed to clarify the effect of capital structure on earnings volatility and cash flows in the commercial banking sector. The research focused on all 15 banks listed on the Amman Stock Exchange, and data were gathered from their financial statements between 2018 and 2022. The study employed multiple regression analysis to assess the data and test hypotheses. Previous studies have shown mixed results, with some finding a positive relationship between capital structure and financial performance, while others presented opposing views. The findings of this study provide statistical evidence that the debt-to-asset ratio (DTA) positively influenced operating cash flows and their volatility, while negatively affecting profits and their volatility. Additionally, the debt-to-equity ratio (DETE) positively impacted operating cash flows, their volatility, and profit volatility. These results suggest that banks should aim for a balanced capital structure to maintain stable profits and cash flows over time. This requires careful consideration of risks, regulatory requirements, market conditions, and the cost of capital. A balanced approach, involving both debt and equity financing, helps banks manage the risks of fluctuating cash flows and profits.

Bridging the Digital Divide: Enhancing Literacy and Inclusivity through DELP

ABSTRACTNorth Carolina Central University (NCCU) is dedicated to addressing the pervasive issues of digital inequality prevalent in Durham's underserved anchor communities through the Digital Equity Leadership Program (DELP) and NCCU's School of Library and Information Sciences (SLIS). DELP offers a holistic approach as its activities and initiatives encompass workforce development, technological access, and digital literacy training, leveraging its partnerships with local organizations. DELP fortifies communities through its holistic initiatives and adopts an innovative approach to fostering long‐term community resilience and adaptability in an ever‐growing digitized economy. DELP amplifies capacity building through multifaceted employability and economic growth approaches, laying the groundwork for a more equitable and sustainable future. DELP's core activities expose our community members to skills that support their financial, economic, health, and digital equity. By bringing together program partners and our resources, capabilities, and expertise in digital literacy, innovative remedies were created to reach deeper into the surrounding communities.

The Role Of Blockchain Technology In Enhancing Financial Inclusion

Blockchain technology has emerged as a transformative force with the potential to greatly improve financial inclusion, especially among underbanked and unbanked communities. Financial inclusion refers to the accessibility and availability of financial services for all individuals, yet billions remain excluded from formal financial systems. Traditional banking often overlooks these populations due to geographic barriers, high transaction fees, and strict regulatory frameworks. Blockchain provides a decentralized, secure, and transparent platform for financial transactions, allowing individuals to access services without relying on traditional banking infrastructure. By removing intermediaries, blockchain lowers transaction costs, accelerates service delivery, and enhances transparency. It enables peerto-peer transactions, facilitates cross-border remittances, and supports micro-lending through smart contracts, thereby broadening access to vital financial services. Furthermore, the immutable and auditable characteristics of blockchain foster trust in financial systems, particularly in regions plagued by weak institutions or corruption. However, despite its promise, blockchain faces substantial hurdles such as regulatory uncertainties, limitations in technological infrastructure, and cryptocurrency volatility that impede widespread adoption. Integrating blockchain with complementary technologies like mobile banking and the internet could further enhance its role in advancing financial inclusion. This paper investigates the diverse effects of blockchain technology on financial inclusion while critically analyzing both its potential advantages and the challenges that must be addressed to fully leverage its capabilities in promoting global financial access and equity.

Impact of Capital Structure on Profitability of Commercial Banks in Tanzania

This paper aims to examine the impact of capital structure on the profitability of commercial banks in Tanzania using panel data from 2017to 2021. Specifically, the study wants to investigate the impact debt and equity in capital structure on profitability of commercial banks in Tanzania. The study employed panel data research design and used secondary data which were extracted from audited financial statements of commercial banks. Return on assets was used as the dependent variables while independent variables were debt and equity capital as well as the debt-equity ratio. Result from the analysis indicates that initially the variables were not normally distributed which necessitate normalization of variables. Correlation analysis was performed and there was no multicollinearity problem between the variables. Based on Hausman test fixed effect model was selected as the appropriate model. The results from the analysis showed that 1% increase in debt capital increases profitability of commercial bank by 16.79%. The positive debt-profitability coefficient implies opportunities for enhancing profitability of commercial bank through debt financing. Result further revealed that 1 % increase in debt-equity ratio is associated with 18.07% decline in profitability. Which implies negative relationship between debt-equity ratio and profitability. On the other hand, increase in equity finance is associated with decline in profitability holding other factors constant. However, the study recommends a comprehensive assessment and consideration of situational factors while carrying out capital structure decision inverse relationship between debt-equity ratio also implies that excessive debt may pose financial risk and make the company less attractive to potential investors.

Revisiting a decade of inequality in healthcare financial burden in Cambodia, 2009–19: trends, determinants and decomposition

BackgroundOut-of-pocket healthcare expenditure (OOPHE) without adequate social protection often translates to inequitable financial burden and utilization of services. Recent publications highlighted Cambodia’s progress towards Universal Health Coverage (UHC) with reduced incidence of catastrophic health expenditure (CHE) and improvements in its distribution. However, departing from standard CHE measurement methods suggests a different storyline on trends and inequality in the country.ObjectiveThis study revisits the distribution and impact of OOPHE and its financial burden from 2009–19, employing alternative socio-economic and economic shock metrics. It also identifies determinants of the financial burden and evaluates inequality-contributing and -mitigating factors from 2014–19, including coping mechanisms, free healthcare, and OOPHE financing sources.MethodsData from the Cambodian Socio-Economic Surveys of 2009, 2014, and 2019 were utilized. An alternative measure to CHE is proposed: Excessive financial burden (EFB). A household was considered under EFB when its OOPHE surpassed 10% or 25% of total consumption, excluding healthcare costs. A polychoric wealth index was used to rank households and measure EFB inequality using the Erreygers Concentration Index. Inequality shifts from 2014–19 were decomposed using the Recentered Influence Function regression followed by the Oaxaca-Blinder method. Determinants of financial burden levels were assessed through zero-inflated ordered logit regression.ResultsBetween 2009–19, EFB incidence increased from 10.95% to 17.92% at the 10% threshold, and from 4.41% to 7.29% at the 25% threshold. EFB was systematically concentrated among the poorest households, with inequality sharply rising over time, and nearly a quarter of the poorest households facing EFB at the 10% threshold. The main determinants of financial burden were geographic location, household size, age and education of household head, social health protection coverage, disease prevalence, hospitalization, and coping strategies. Urbanization, biased disease burdens, and preventive care were key in explaining the evolution of inequality.ConclusionMore efforts are needed to expand social protection, but monitoring those through standard measures such as CHE has masked inequality and the burden of the poor. The financial burden across the population has risen and become more unequal over the past decade despite expansion and improvements in social health protection schemes. Health Equity funds have, to some extent, mitigated inequality over time. However, their slow expansion and the reduced reliance on coping strategies to finance OOPHE could not outbalance inequality.

Reducing the cost of capital to finance the energy transition in developing countries

Climate stabilization requires the mobilization of substantial investments in low- and zero-carbon technologies, especially in emerging and developing economies. However, access to stable and affordable finance varies dramatically across countries. Models used to evaluate the energy transition do not differentiate regional financing costs and therefore cannot study risk-sharing mechanisms for renewable electricity generation. In this study, we incorporated the empirically estimated cost of capital differentiated by country and technology into an ensemble of five climate–energy–economy models. We quantified the additional financing cost of decarbonization borne by developing regions and explored policies of risk premium convergence across countries. We found that alleviating financial constraints benefits both climate and equity as a result of more renewable and affordable energy in the developing world. This highlights the importance of fair finance for energy availability, affordability and sustainability, as well as the need to include financial considerations in model-based assessments.

Like daughter, like father: Female socialization and green equity investment

Are parents' decisions to invest in green equity funds influenced by their daughters? According to the recent literature on female socialization, parenting a daughter is expected to have a positive impact on parents' investment in green equity funds. Based on an original survey among 2288 French investors, we validate the female socialization in a retail investment context. Raising a daughter increases the likelihood of investing in green equity funds by about 3.87 % on average. Consistent with the female socialization hypothesis, this effect only stands for male parent investors, when daughters are still in the household and is not significant for separated fathers. Moreover, the amount invested is also significantly influenced by being a parent of a daughter. Our results support the need to better consider the influence of family members in investment in household finance decision-making and the side effects of education on environmental issues.

Fee structure and equity fund manager’s optimal locking in profits strategy

We study the effects of fee structures on fund managers’ strategies for locking in profits. Utilizing the optimal stopping time method, we identify two critical portfolio value thresholds that signal when a manager will choose to lock in profits. Fee components such as management fees, self-investment ratios, and high-water marks significantly influence these decisions. Specifically, higher management fees are associated with increased risk aversion, leading to a narrower continuation region, indicating a preference for lower risk. Conversely, performance fees encourage greater risk-taking. We use the S&P 500 Index and NASDAQ Composite index as representatives of managers’ portfolios and apply our model to illustrate how managers adjust their profit-locking strategies in response to their desired rewards.

Geographic inequality in funding by National Institutes of Health negatively impacts almost one-half of the states in the United States.

The National Institutes of Health (NIH) is the primary federal agency in the United States (US) that supports biomedical research, training, and clinical trials. NIH funding creates patents and jobs and thus helps the regional and national economy grow. Therefore, NIH funding would be expected to flow equitably to all 50 US states. However, there is a significant geographic disparity in the level of NIH funding received by various states. To that end, in 1993, authorized by Congress, NIH initiated a funding program called the Institutional Development Award (IDeA) to support states, called IDeA states, which received low levels of NIH funding. However, whether this approach has helped reduce the geographic disparity in NIH funding is unclear. In the current study, we analyzed data on various NIH funding mechanisms awarded to 23 IDeA states vs. 27 non-IDeA states, as identified by NIH. We compared these data to the population size, federal taxes paid, and the number of PhDs and Post-doctoral Fellows(PDFs) trained in IDeA vs. non-IDeA states. The non-IDeA states received 93.6% of the total NIH funding, whereas IDeA states received only 6.4%. On average, one Institutional Training Grant was received for every 24 PhDs trained in non-IDeA states, while IDeA states received one such grant for every 46 PhDs trained. The non-IDeA states comprised 84.3% of the US population, whereas IDeA states comprised 15.7%. Thus, on a per capita basis, non-IDeA states received $120 from NIH, whereas IDeA states received $45 per person. For every million dollars contributed by the non-IDeA states toward federal taxes, they received $7,903 in NIH funding, while the IDeA States received only $4,617. For FY 2022, the NIH funding created an economic activity of $90.6 Billion in non-IDeA states and only $6.3 billion in IDeA states. When total NIH funding to the states was analyzed for the years 1992, 2002, 2012, and 2022, IDeA states received 4.7% of the total NIH funding in 1992, which increased to 7.2% in 2002 but dropped to 6.8% in 2012 and 6.5% in 2022. This demonstrated that IDeA states' share of NIH funding remained relatively unchanged for the past 20 years. Eliminating the geographic disparity in NIH funding is crucial for achieving equitable health outcomes across the US, and for the IDeA states to successfully train future generations of physicians and scientists, as well as grow the regional economy. Although the NIH IDeA programs have helped enhance the research capacity in IDeA states, the funding currently constitutes less than 1% of the total NIH budget. Thus, it is critical to increase NIH funding to IDeA states to improve health outcomes for all Americans.

Political connections and investment efficiency of renewable energy enterprises: The role of marketization

Using data from 77 listed renewable energy enterprises in China and the threshold effect model, this study investigates the impact of political connections on the investment efficiencies of renewable energy enterprises at different degrees of marketization. A Richardson residual measurement model is applied to measure this efficiency. Further, this study constructs a cash flow sensitivity model to analyze how the political connections affect investment efficiency through financing factors and then analyzes the four external financing channels using a path analysis. The results show that when the degree of marketization is less than 9.280, political connections can improve investment efficiency. When the degree of marketization exceeds 9.280, the influence of political connections on investment efficiency is statistically insignificant. At a low marketization stage, political connections enhance the ability of enterprises to acquire resources through four kinds of external financing channels: bank credit, corporate bonds, commercial credit, and equity financing. This supports investment efficiency by reducing cash flow sensitivity. Due to the differences in the nature of the enterprises and personnel appointments, non-state-owned renewable energy enterprises with political connections experience more significant differences with respect to the impact on investment efficiency under different marketization levels.

Regulation, Remainder Risk, and Public Investment Fund: A Theoretical Analysis

In the EU member countries that obey the rule of law principle, the legislative work of the parliament supports the market economy by producing public capital. In many cases, legislation is connected to public investment projects, and sometimes also to socially important private projects. Both include public benefits and costs, but also public risks. Moreover, as the public commitment to major private undertakings may preclude both immaterial and material contributions, there is a noteworthy threat that an accidental actualization of the remainder risk caused by some unforeseen incident would fall heavily on the taxpayers. This paper constructs a club theoretic model for the analysis of representative democracy. In the model, the public commitment to a private project is decided by the simple majority voting rule in the parliament. The analysis shows that strict assessment of the remainder risk may halt the whole undertaking implying that the promised social benefits are also lost. As a solution, we propose a constitutional Investment Fund, which would launch short-maturity public bonds to citizens and pension funds, earmarked to the material part of the public commitment to private projects. The system could partly privatize the public remainder risk so that only the immaterial part remains to common taxpayers thus increasing the probability of a majority vote for the project. At the same time, the government would get equity finance for its investments, and the citizens and pension funds would hold securities with tangible net asset value. The system should increase precision in public debt and risk management and bring democracy, public governance, and the market economy closer to each other.

Exploring the influence of Silicon Valley Bank default and U.S. financial stress on sectoral interactions and effective hedging strategies

ABSTRACT The SVB implosion could trigger a domino effect, shaking confidence in U.S. banks. This research estimates the response of good and bad cumulative abnormal returns (G-CARs, B-CARs) on the event day, pre-event and post-event periods, using financial stress, oil, geopolitical and equity uncertainty as controls. We also examine the moderating impact of the SVB implosion and U.S. financial stress indices (US-FSI) on the good and bad dynamic conditional correlations between 132 U.S. sectoral pairings. Additionally, we assess the best portfolio distribution to determine if short positions in specific U.S. sectors offer better protection against SVB’s long-term volatility using the DCC-GARCH-t copulas. Overall findings suggest that B-CARs are more adversely affected than G-CARs. Therefore, investors need to consider bearish and bullish market conditions before devising hedging strategies. The Financials, Health Care, Industrial, Materials, Oil and Gas, Real Estate and Transportation sectors of U.S. experienced significant losses due to higher B-CARs around the SVB default event. Furthermore, the SVB default’s moderating impact on the U.S. sectoral stock returns is more pronounced during bearish market conditions compared to bullish ones following a Black Swan event. This suggests a differential moderating impact of SVB on good and bad conditional connectedness and a reduction in diversification benefits.

The effects of takeover laws on corporate financing policies: global evidence

Using a cutting-edge estimation method to address heterogenous treatment effects arising from differential treatment timing, we examine the effect of international takeover laws on corporate financing. We find that firms reduce their equity financing in response to takeover laws. Further analyses indicate that takeover laws’ negative effect on equity financing is more pronounced for firms with higher financial constraints and for firms in countries with strong investor protections.

Cardiovascular equity and health center funding: Associations of unmet hypertension and diabetes need by race/ethnicity and federal grants at federally qualified health centers, 2014-2019.

Racial and ethnic disparities in chronic disease are a major public health priority. To determine if the amount of federal grant funding to federally-qualified health centers (FQHCs) was associated with baseline overall prevalence of uncontrolled hypertension and uncontrolled diabetes, as well as prevalence by racial and ethnic subgroup. Cross-sectional multivariate regression analysis of Uniform Data System 2014-2019, which includes clinic-level data from each FQHC regarding demographics, chronic disease control by race and ethnicity, and grant funding. Our main exposure were the average values of the prevalence of uncontrolled hypertension and uncontrolled diabetes among the overall population and by racial and ethnic group from 2014-2016. Average federal grant funding per patient from 2017-2019, as measured by annual health center funding from the Bureau of Primary Health Care (BPHC) and overall federal grant funding. We analyzed 1,205 FQHCs from 2014-2019; the average BPHC grant per patient across all FQHCs in 2019 was $168 while the average total federal grant was $184 per patient. Increasing shares of total patients with uncontrolled hypertension or uncontrolled diabetes were not associated with increased total federal grant funding in either unadjusted or adjusted analysis. Increased shares of patients who are American Indian or Alaskan Native (AI-AN) with uncontrolled hypertension and diabetes were associated with increasing total federal grant funding in both unadjusted and adjusted analysis (adjusted beta hypertension $168.3, p <0.001; adjusted beta diabetes 59.44, p = 0.02). However, cardiovascular clinical need among other racial and ethnic groups was not significantly associated with grant funding. FQHCs with higher overall rates of uncontrolled hypertension or diabetes do not receive more federal funds, and there is no significant association between federal funding levels and rates of uncontrolled blood pressure or diabetes within most racial and ethnic groups, with the exception of AI-AN populations. To narrow inequities in cardiovascular disease, HRSA should consider more explicitly targeting federal grants to clinics with higher levels of clinical need.

Founders’ Characteristics and Startups’ Funding Opportunities Around the Globe

In this paper, I investigate the eleven largest startup markets in the world to uncover whether female founders have a disadvantage in the amount of funding received by their respective startups. I am also interested in whether country-level factors such as the level of development and quality of formal and informal institutions can impact the results. Moreover, I research founders with formal technical education to show if they have any advantage while funding their startups. I investigate more than 3,500 international startups during the period of 2017-2022 while utilizing CrunchBase database. I uncover that female founders are at a disadvantage in funding for their startups in all 11 countries of interest. Such results are more pronounced in developed countries, those with better functioning formal institutions and more individualistic populations. The disparity between male and female-led startups’ funding is especially pronounced in debt financing as well as seed round of equity financing. The technical education of male and female founders does not provide any advantage in terms of the funding opportunities.