Equity Investment Research Articles

Post global financial crisis multiplex financial network structure longevity: Does it predict re-globalization? Empirical investigation for 234 countries

Research background: International capital flows show decreasing trend after each financial crisis as countries become unwilling to invest in risky counterparties. Recent discussions over structural changes within the global financial network suggest that its structure may be still undergoing some changes. Uncovered weaknesses of over-connectedness with unstable un-ally countries during global financial crisis were further highlighted by recent Covid-19 pandemic. However, previous research suggest that important structural changes happened after global financial crisis. Thus, such situation raises a question whether post global financial crisis multiplex network structure is long-term and is it exhibiting re-globalization pattern as suggested by re-globalization megatrend. Purpose of the article: The main objective of the paper is to assess post global financial crisis multiplex financial network structure longevity and to identify whether it exhibits re-globalization pattern. Methods: Multiplex financial network mapping, network topological analysis and structure longevity methods were employed to evaluate network connectedness, topological structural properties of multiplex financial network and its’ structure longevity. 5-layer multiplex financial network was mapped for different types of capital flows for each layer: net direct and portfolio investments in debt, equity and net banking assets for each year in the post global financial crisis period 2009–2020. Each network layer employed bilateral data from up to 234 countries of the world. Next step of research employed a set of network-level measures defining topological features of each network in the period of 2009–2020 in order to capture the trend of structural changes and evidence of re-globalization. The final stage analyzes multiplex financial network structure by layer and country longevity. Findings & value added: Analysis reveals that stock (positions) multiplex financial network aggregate connectedness, i.e., density and value, increased during post- global financial crisis period until Covid-19 pandemic period, thus, suggesting that globalization in terms of stock is continuing. Topological structural properties of multiplex financial network changed as number of strongly and weakly connected countries decreased and more countries became included in network. Longevity analysis of layer and country structure within multiplex financial network reveal that banking and debt investments are increasing since 2018, while equity part is decreasing. Developed countries, i.e., the United Kingdom and Germany, decrease in multiplex financial network structure, while developing, especially from Asia region (i.e., Hong Kong SAR, China and Singapore) increase. Such empirical results support the re-globalization megatrend in terms of investment type and counterparty structure as highlighted by most recent scientific discussion showing that it started early after global financial crisis. Research also uncovers some regional trends of Asia region increasing in investment network structure, while Europe decreasing. As developing countries attract more and more investment and further develop, global cost saving and, thus, returns from global investment into these countries may be decreasing, resulting in lower gain from globalization. Our analysis may facilitate investment strategy decisions by suggesting that even though gains from globalization might be decreasing, instead of localization, countries could follow ally investment strategy to manage the risk of over-dependency from unstable counterparty while preserving globalization wealth.

Navigating the Implementation of Tax Credits for Natural-Gas-Based Low-Carbon-Intensity Hydrogen Projects

This paper delves into the critical role of tax credits, specifically Sections 45Q and 45V, in the financing and economic feasibility of low-carbon-intensity hydrogen projects, with a focus on natural-gas-based hydrogen production plants integrated with carbon capture and storage (CCS). This study covers the current clean energy landscape, underscoring the importance of low-carbon hydrogen as a key component in the transition to a sustainable energy future, and then explicates the mechanics of the 45Q and 45V tax credits, illustrating their direct impact on enhancing the economic attractiveness of such projects through a detailed net present value (NPV) model analysis. Our analysis reveals that the application of 45Q and 45V tax credits significantly reduces the levelized cost of hydrogen production, with scenarios indicating a reduction in cost ranging from USD 0.41/kg to USD 0.81/kg of hydrogen. Specifically, the 45Q tax credit demonstrates a slightly more advantageous impact on reducing costs compared to the 45V tax credit, underpinning the critical role of these fiscal measures in enhancing project returns and feasibility. Furthermore, this paper addresses the inherent limitations of utilizing tax credits, primarily the challenge posed by the mismatch between the scale of tax credits and the tax liability of the project developers. The concept and role of tax equity investments are discussed in response to this challenge. These findings contribute to the broader dialogue on the financing of sustainable energy projects, providing valuable insights for policymakers, investors, and developers in the hydrogen energy sector. By quantifying the economic benefits of tax credits and elucidating the role of tax equity investments, our research supports informed decision-making and strategic planning in the pursuit of a sustainable energy future.

Investors’ perception towards investor protection measures taken by the government of India and SEBI: an ordinal approach

PurposeThis study aims to determine experimentally factors affecting the satisfaction of retail stock investors with various investor protection regulatory measures implemented by the Government of India and Securities and Exchange Board of India (SEBI). Also, an effort has been made to gauge the level of satisfaction of retail equities investors with the laws and guidelines developed by the Indian Government and SEBI for their invested funds.Design/methodology/approachTo accomplish the study’s goals, a well-structured questionnaire was created with the help of a literature review, and copies of it were filled by Punjabi retail equities investors with the aid of stockbrokers, i.e. intermediaries. Amritsar, Jalandhar, Ludhiana and Mohali-area intermediaries were chosen using a random selection procedure. Xerox copies of the questionnaire were given to the intermediaries, who were then asked to collect responses from their clients. Some intermediaries requested the researcher to sit in their offices to collect responses from their clients. Only 373 questionnaires out of 1,000 questionnaires that were provided had been received back. Only 328 copies were correctly filled by the equity investors. To conduct the analysis, 328 copies, which were fully completed, were used as data. The appropriate approaches, such as descriptives, factor analysis and ordinal regression analysis, were used to study the data.FindingsWith the aid of factor analysis, four factors have been identified that influence investors’ satisfaction with various investor protection regulatory measures implemented by government and SEBI regulations, including regulations addressing primary and secondary market dealings, rules for investor awareness and protection, rules to prevent company malpractices and laws for corporate governance and investor protection. The impact of these four components on investor satisfaction has been investigated using ordinal regression analysis. The pseudo-R-square statistics for the ordinal regression model demonstrated the model’s capacity for the explanation. The findings suggested that a significant amount of the overall satisfaction score about the various investor protection measures implemented by the government/SEBI has been explained by the regression model.Research limitations/implicationsA study could be conducted to analyse the perspective of various stakeholders towards the disclosures made and norms followed by corporate houses. The current study may be expanded to cover the entire nation because it is only at the state level currently. It might be conceivable to examine how investments made in the retail capital market affect investors in rural areas. The influence of reforms on the functioning of stock markets could potentially be examined through another study. It could be possible to undertake a study on female investors’ knowledge about retail investment trends. The effect of digital stock trading could be examined in India. The effect of technological innovations on capital markets can be studied.Practical implicationsThis research would be extremely useful to regulators in developing policies to protect retail equities investors. Investors are required to be safeguarded and protected to deal freely in the securities market, so they should be given more freedom in terms of investor protection measures. Stock exchanges should have the potential to bring about technological advancements in trading to protect investors from any kind of financial loss. Since the government has the power to create rules and regulations to strengthen investor protection. So, this research will be extremely useful to the government.Social implicationsThis work has societal ramifications. Because when adequate rules and regulations are in place to safeguard investors, they will be able to invest freely. Companies will use capital wisely and profitably. Companies should undertake tasks towards corporate social responsibility out of profits because corporate houses are part and parcel of society only.Originality/valueMany investors may lack the necessary expertise to make sound financial judgments. They might not be aware of the entire risk-reward profile of various investment options. However, they must know various investor protection measures taken by the Government of India & Securities and Exchange Board of India (SEBI) to safeguard their interests. Investors must be well-informed on the precautions to take while dealing with market intermediaries, as well as in the stock market.

The Relationship of a Shared-Equity Construction Agreement with an Investment Agreement: Consumer Protection Issues

Introduction: a shared-equity construction agreement and an investment agreement are key instruments in the field of real estate and investments. They define the rights and obligations of the participants; affect the quality of construction and consumer protection. Purpose: to analyze the relationship between these two types of agreements with an emphasis on issues related to consumer protection; to analyze judicial practices, case-law decisions and legislative norms governing shared-equity construction and investment agreements, taking into account their impact on the rights and interests of real estate buyers. Methods: the methodological framework for the research is based on the methods of scientific cognition, among which the main ones are the methods of consistency, analysis and comparative law. Results: consumer protection within the framework of equity agreements and investment agreements plays an important role in ensuring trust and fairness in relations between the parties. The legal mechanisms and protection structures allow consumers to make informed decisions and ensure their interests when concluding such agreements. Conclusions: the work provides an overview of practical situations affecting consumer protection and offers the recommendations for improving the mechanisms for protecting and ensuring their interests in the context of various contractual relationships, contributing to the balanced development of the real estate market and investments.

Black and White Americans’ Perceptions of Community Equity Efforts Diverge Following the Removal of Confederate Monuments

Communities across the United States are removing Confederate monuments from public spaces. Little work, however, has considered downstream consequences of these decisions. Across three experiments and four replications in Supplemental Material, we examine impacts of community decisions on individuals’ perceptions of communities’ efforts toward racial equity. We find that the removal of monuments leads White Americans—but not Black Americans—to believe that communities will sufficiently prioritize policies aimed at redressing racial inequity in the future. Taken together, these findings suggest that the symbolic removal of Confederate monuments may signal different structural equity investments to different constituencies, with Whites anticipating that communities will engage in sufficient racial equity policy efforts and Black Americans remaining skeptical.

Peran Analisis Laporan Keuangan Dalam Proses Evaluasi Permohonan Kredit: Tinjauan Kasus Di Pt. Bank Rakyat Indonesia (PERSERO) TBK.

The most important aspect above when evaluating the performance of a company is its satisfactory financial position. For this reason, companies must manage their financial management carefully and manage it well. Financial ratio analysis is used to analyze financial performance. When analyzing company performance from a financial perspective, ratio analysis is a tool for analyzing financial data contained in financial reports. The analytical method used in this research is a quantitative method which aims to obtain information about various field conditions and interpret them based on interrelated theory and literature. The analytical tools used to analyze customer financial reports include liquidity ratios, solvency ratios and profitability ratios. Based on research results obtained from PT. Bank Rakyat Indonesia (Persero) Tbk., the author concludes that there is a very effective financial report analysis to find out whether banks carry out credit assessments of prospective debtors by using ratio analysis to manage liquidity, profitability and profitability. The financial ratios calculated include the current ratio, quick ratio, debt to equity ratio, debt to equity ratio, profit margin, investment returns and return on equity. Improve and improve the quality of creditor financial report analysis in evaluating credit applications, as a basis for considering and completing further financial ratio analysis.

Private Equity Investment in Health Care Soars-But at What Cost?

Study finds more hospital-acquired adverse events after acquisitions.

Leveraging national security: private equity and bankruptcy in the United States defense industry

Abstract Defense contractors play an essential role in US security operations. Among other responsibilities, contractors manufacture arms, manage logistics, analyze intelligence, and carry out cybersecurity operations. Historically, defense contractors were either publicly traded corporations or privately owned companies. The past two decades, however, have seen a major shift in the ownership structure of the US defense industry. Private equity firms—once niche actors in the US national security marketplace—have carried out over 1,500 deals involving defense contractors since 2000. This study employs a mixed-methods research design to assess the effects of private equity investment on the financial stability of the US defense industry. Using data on over 8,000 defense contractors, the inquiry finds that contractors with private equity backing experience bankruptcy at higher rates than contractors with no prior private equity investment. In addition, the study evaluates private equity activity in the military satellite services market—a field of growing importance in the strategically important domain of outer space. The inquiry’s findings have notable international security implications. Given the US’ role as a lynchpin in numerous alliances around the world, higher rates of bankruptcy among defense contractors have the potential to affect the security of the United States and its allies.

Complicating the Comparative Taxonomy: the Impact on Corporate Governance of the Dynamic Interaction of Creditors and Shareholders

The corporate governance literature often focuses on either equity-side or debt-side actors, taking one as a control variable to study the impact of variations in the characteristics of the other. This Article considers how the interplay between the nature debt and equity investments can be analyzed through a theoretical framework to further the understanding of differences in governance outcomes across jurisdictions. Therefore, it builds upon existing literature on controlling shareholders, financial intermediation, and creditor governance to analyze the mirroring setup between controlling and noncontrolling shareholders on the equity side, and private and public lenders on the debt side. It studies the dynamic interaction of these characteristics across jurisdictions where different combinations of debt and equity prevail, before evaluating how this framework can potently explain cross- and intra-jurisdictional variations in governance outcomes.

Private Equity Exits in the CEE:

Purpose of the article: The purpose of this article is to assess private equity exit strategies of CEE portfolio companies with regards to desired exit routes, including a cross-border deal aspect and a pre-exit holding period.Methodology/methods: This paper employs secondary data from the Mergermarket database containing information on more than 20 thousand private equity M&A deals and IPOs. General scientific methods such as analysis, comparison or generalization were used.Scientific aim: Only limited amount of research was carried out on the private equity exits in the region of central and eastern Europe. This study aims at shedding new light on understanding of private equity exit route decisions and timing in this particular geographic area.Findings: Exiting a CEE portfolio company, private equity investors tend to prefer exiting via trade sales over secondary buyouts or IPOs. They also tend to prefer foreign acquirers over domestic ones. A typical pre-exit holding period averages around 5 years.Conclusions: Our results show that while exiting a CEE portfolio company, private equity investors tend to divest by selling the company to a strategic investor (trade sales) rather than a financial investor (secondary buyouts) or exiting via an IPO. While exiting via trade sales and secondary buyouts, private equity investors tend to prefer foreign acquirers rather than domestic ones with a strong preference of acquirers from outside of the respective region. Typical holding period of a CEE private equity portfolio company remains on average in line with academic theory. Our paper contributes to the developing literature of private equity by using an extended and up to date dataset and introducing the research on the cross-border aspect of PE exit strategies.

Practical Applications of The Perceived Advantages of Self-Indexing for Institutional Equity Investors

Practical Applications of The Perceived Advantages of Self-Indexing for Institutional Equity Investors

Private Equity Investments in Support of Professional Athletes: Developing and Testing a Cross-Country Framework of Sporting and Venture Creation Performances in Countries With a Strong Long-Term Orientation

Overseas financial direct investments (ODIs) have been investigated with explanations of how investors generate a return on investment (ROI) and enable entries to new markets via sports club investments. However, investments in athletes have garnered less attention. This study explores private equity (PE) funds that could support professional athletes’ sporting performance and their second careers as entrepreneurs, actions that require a long-term approach. First, this study builds a sports entrepreneurship framework. Second, this study analyses secondary data on exceptionally strong sporting performance (Olympic Games medals), venture creation performance (the number of unicorns), and long-term orientation. As its theoretical contribution, this paper suggests that the tested framework could help future studies detail theories concerning sports startup ecosystems and agency problems. A managerial implication of the article is that sports club investments could be combined with PE fund investments to athletes in contexts dominated by funding types other than PE.

Investment motives and performance expectations of impact investors

Using a unique sample of retail impact investors, this study evaluates how investors deal with the challenge of aligning their financial and their nonfinancial goals. We find that investors with stronger nonfinancial motives are more likely to expect the overperformance of an impact investment and the underperformance of traditional equity and bond investments than investors with weaker nonfinancial motives. This cross-asset relationship between nonfinancial motives and expected performance indicates that investors form expectations that fit with the investment decisions that their nonfinancial motives are likely to motivate. We also find that after experiencing losses, investors with stronger nonfinancial motives are less likely to revise their expectation that the impact investment will underperform and more likely to expect that the impact investment will overperform than other investors. Our findings provide further evidence that preferences can affect expectations, and challenge conclusions drawn from observed behavior regarding investors’ willingness to pay for impact.

Physician Perspectives on Private Equity Investment in Health Care

This survey study examines physician views toward private equity investment in health care.

Role of successive round as a quality signal in equity crowdfunding: Novel evidence from the perspective of investors' preferences.

Equity crowdfunding provides entrepreneurs and founders the opportunity to raise funds from a large number of potential investors, using quality signals to influence their investment decisions. Drawing from the lens of signaling theory and the elaboration likelihood model, this study explores the role of successive equity crowdfunding rounds as a quality signal in shaping investors' preferences in crowdfunded firms and its influence on their investment decisions. Our findings reveal that successive equity crowdfunding rounds serve as quality signals, modeling investors' preferences and thereby resulting in a high magnitude of success factors. The successive round is a strong quality signal that has a positive and significant impact on investors' investment decisions in subsequent equity crowdfunding rounds. The increasing preferences of investors due to the successive round augments the magnitude of success factors and helps entrepreneurs in successfully achieving large funding targets, high overfunding, and attracting a large number of investors in subsequent equity crowdfunding campaigns, even with a low level of equity offering.

Entrepreneurial finance in Europe and the Russian war against Ukraine

AbstractPrior research has investigated how the prices of stocks and commodities as well as inflation levels have been affected by the Russian war against Ukraine. So far, however, we know little about the impacts of the war on the entrepreneurial finance sector. Prior research on the effects of unexpected exogenous crisis events on entrepreneurial finance suggests a strong negative impact on new and follow-on funding for entrepreneurial ventures. Our study regards the Russian war against Ukraine as an unexpected exogenous crisis event and explores its impact on the entrepreneurial finance sector. It goes beyond a mere sentiment and impact analysis and also explores the underlying reasons and mechanisms as well as potential response and coping strategies employed by entrepreneurial finance investors. Based on two surveys of European venture capital (VC) and private equity (PE) investors, we find that the war had a strong negative impact on the two types of investors and their respective funds. Both VC and PE investors report more risk-aversion of limited partners (LPs) and LPs leaving the market as important challenges resulting in an overall lower willingness of LPs to invest. This applies in particular to banks, insurance funds, and pension funds. On the portfolio firm level, securing equity financing and maintaining liquidity were considered pressing issues. Overall, the situation seems to be more difficult for portfolio companies of VC as compared to PE investors. For the former, the financing- and liquidity-related issues seem to be more existential and survival-threatening. Responding to these challenges, both VC and PE investors altered their industry focus and put more emphasis on entrepreneurial experience. Financial investment selection criteria such as financial valuation, profitability, and cash- as well as revenue-generating capacity also increased in importance. Again, differences between VC and PE investors exist. Our study has implications for entrepreneurial finance theory and practice and concludes with an agenda for research on the impacts of the Russian war against Ukraine on entrepreneurial finance.

GPT's idea of stock factors

We amalgamate the capabilities of the GPT-4 computational model with the avant-garde methodology of autonomous factor generation, culminating in the synthesis of high-return factors within the equity investment milieu. Empirical outcomes elucidate that the factors conceptualized by ChatGPT attain a commendable Sharpe ratio peaking at 4.49, accompanied by an annualized return reaching 66.16%. Notably, the superlative excess returns garnered remain unaccounted for by the quintessential five-factor model. Through the implementation of an unembellished model averaging paradigm, the ensemble of 35 factors, conceived by ChatGPT, manifests an apex long-short annualized return of 88% and a Sharpe ratio registering at 2.46. In stark contrast to conventional data mining techniques, the temporal expenditure requisite for GPT's factor generation is minuscule. It relies on knowledge inference without the need for data input, and it can provide a thorough economic explanation for its factors.

Tax System and Equity Investment in a Growing Economy

The purpose of the study is to identify the impact of the tax system on investment in equity capital by analyzing the six types of taxes that affect the activities of firms. The data for the independent variables (tax classes in Nigeria) are obtained from the Federal Internal Revenue Service, while the data for the dependent variable (equity investment) are obtained from the Statistical Bulletin of the Central Bank of Nigeria. The necessary statistical methodologies are used to examine the impact of various tax classes on equity investment from 2011 to 2020. According to the research, capital gains tax and gas income tax have little effect on equity investment. The petroleum profit tax and corporate income tax have a considerable detrimental impact on equity investment. On the plus side, value added tax and education tax have a significant favorable impact on equity investment. These results are one-of-akind and precisely depict the genuine nature of the country’s tax system and its impact on investment. As a result, the research proposes a tax shift to lessen the tax burden on enterprises in order to stimulate equity investment, which will increase firms’ capital base for the purpose of business expansion and growth of the nation’s economic structure.

Cognitive Biases Impact on Investor’s Investment Decision of Retail Mutual Fund Investor

The purpose of this research is to study the effect of Cognitive bias on Investor’s investment decision of Retail Mutual Fund Investor.
 Methodology Adopted:Structured questionnaire was distributed to 1012 Indian mutual fund investors of four states considered financial hubs of India (Delhi/NCR, Mumbai, Bangalore, and Kolkata). Multiple regressions were used to test the model. Validity of instrument was established through CFA.
 Findings: Cognitive Bias (Overconfidence, over-reaction, Herd Effect and Regret Aversion) significant with investor’s investment decision making.
 Research Implications:Results are significant on Indian investors but with different geographic results might different. 
 Originality/ Value: Academic research is still needed to understand the impact of mutual fund investors' cognitive biases on their investment decisions, Biases studied on Equity investors in south India, due to inconsistency in literature the work found to be original.

Analyzing the Current State and Visibility of Diversity, Equity, and Inclusion Initiatives at Urology Residency Programs

ObjectiveTo analyze AUA urology residency program websites to determine visibility of DEI initiatives. There is growing interest in diversity, equity, and inclusion (DEI) initiatives by urology applicants, and in recent years, urology programs have invested in efforts to promote DEI. MethodsAll ACGME-accredited urology residency program with a website were assessed. Military programs were excluded. A DEI Score Card was developed using published pillars of DEI, including five domains: departmental inclusion, pipeline growth, departmental education, community engagement, and faculty demographics. Program Doximity rank, address, and surrounding demographics were collected to determine predictors of investing in DEI. Results141 urology residency websites were included for analysis. Only 40.7% of programs referenced DEI on their webpage, and 21.4% offered funded mentorship opportunities. Department education and community engagement were the least popular initiatives. The Western, Northeastern, and North Central sections had the highest DEI total score with wide variation across domains. Mention of DEI was not associated with program’s county-level social vulnerability or percent minority but was associated with being a top 50 program (OR=4.0; 95% CI 1.8, 8.9; p=0.0007). DiscussionLess than half of academic urology programs' websites referenced DEI initiatives. Using a DEI score card, our study shows that investment in diversity, equity, and inclusion varies widely by AUA section, and greater investment is positively correlated with program rank. Our DEI score card serves as a tool that programs can use to assess their current DEI investment, identify areas for improvement, and ensure existing initiatives are visible to applicants.