Financial Attractiveness Research Articles

FINANCIAL INSTRUMENTS FOR PROVISION OF SUSTAINABLE ECONOMIC GROWTH OF TERRITORIAL DEVELOPMENTS

The problems of formation of revenues of local budgets are investigated in the article. It has been established that significant centralization has affected the reduction of financial independence of local selfgovernment bodies. Changes in the management of local budgets caused by the introduction of a decentralized model encourage local self-government bodies to attract additional financial resources and form a certain economic potential. The feasibility of introducing a public-private partnership through the application ofdifferent methods and tools based on the form of interaction of project participants is substantiated. Suchcooperation requires the organization of complex, mixed private-public structures that can provide largescale infrastructure projects with resources. The advantages of project financing of economic development ofterritories in the framework of public-private partnership (PPP) are revealed.In order to ensure the financial attractiveness of projects implemented on the basis of public privatepartnership and aimed at ensuring the sustainable economic development of regions, it is recommended touse organizational models such as DBFO (Design, Build, Finance, Operate) and DBO (Design, Build, Operate).

Designing of structural and functional organizational systems, formed during the re-profiling of industrial facilities

When implementing a project for the re-profiling of industrial facilities, a complex multi-factor system of interactions is formed, which includes a large number of functional subsystems, formed by organizational and technological modules. Taking into account the object orientation of the system aimed at achieving optimal results of industrial site redesign, the most significant are the following groups of organizational and technological modules: investment, design, production, information, management. The study of qualitative and quantitative characteristics of subsystems, the system under consideration, will allow to formulate the basic requirements to the initial data necessary for creating a structured system of organizational design and management of projects for the re-profiling of industrial enterprises. Thus, the system must function reliably in the interaction of all the integrated structures of the project under the influence of the external environment. The system and its elements at all levels should be open and flexible, ensuring reliability in the operation. When operating, the system must provide an operational response to impacts, integrated modules or the external environment. The system should create the most concrete resultant solution intended for managers of the project management structure. The system should be formed on the maximum number of typical and representative subsystems, as well as standardization, unification and continuity, while remaining open and not localizing the choice of solutions to project managers. The main objective of the system should be to increase the financial attractiveness of the project, as well as to increase the processability of the project implementation processes. Approaching the solution of the problem from a scientific point of view, it is expedient to conduct research consisting of structural and functional modeling of multi-level and multi-criteria links of organizational, technological, managerial structures and information support for the re-profiling of industrial facilities; multifactorial analysis of the dynamic system of organizational and technological transformable matrices of industrial facilities redevelopment; multistage analysis of polyvariant design; deterministic factor analysis of organizational and technological modules that ensure the achievement of optimal solutions for the conversion of industrial facilities. The objectivity of the results of the above methods will provide an opportunity to comprehensively study the issue under consideration.

Impact оf Quality Changes in Merchandise Exports on the Russian Economic Growth in 2014-2016

Subject. After the recent papers of leading economists on the Russian economy, the Author examines the influence of external factors of 2014-2016 on the merchandise export structure quality and on the Russian economic growth through the prism of the “Dutch decease” impact. Purpose. The research was focused on clarification whether the export structure quality improves or if the Russian economic growth model is becoming more sustainable after the mentioned events. Methods. The official data were subject to statistical processing in order to use some research methods designed by the author. There are new aggregation schemes for goods and destinations of foreign trade and the estimation of the financial attractiveness gradient of industries for investors. The application of the proposed methods makes it possible to derive qualitative indicators of non-commodity export and to assess its impact on the Russian economic growth. Results. The author shows that the qualitative estimations obtained by mainstream researchers could be greatly distorted without taking into account of some important commodity market features. So, the main result of this study is the initial hypothesis confirmation that the 2014 events pushed Russia’s exports towards improving the quality of its structure within the framework of specified definitions. Based on these results and some other publications, the author concludes that the Russian economy has the prerequisites for a transition to quality economic growth. The quantitative assessment of the transition to a new model of economic growth will require some further research on the topic.

Innovative Financial Approach for Agricultural Sustainability: A Case Study of Alibaba

Sustainability and agricultural finance are two important issues attracting attention from industry and academia. This research adopts an in-depth case study methodology to investigate the agricultural finance initiatives of Alibaba Group, and explores how the agricultural finance practices of an e-commerce platform facilitate its sustainability goal. A reference framework is proposed to prove the adoption of agricultural finance. The influence of three moderating variables, namely, IT support, financial attractiveness, and cooperation with other entities, is analyzed. We find that advanced IT support and financial attractiveness are two indispensable enablers for agricultural finance initiatives, and collaboration with other entities is necessary in adopting agricultural supply chain finance.

Financial viability of solar industrial process heating and cost of carbon mitigation: A case of dairy industry in India

Dairy industry in India has a substantial demand for process heating at temperatures that can be provided with solar collectors. However, the acceptance and dissemination of solar industrial process heating systems would also be affected by their financial attractiveness for the users. Another attractive feature of SIPH systems is their ability to mitigate environmental emissions. Results of a financial viability analysis including estimation of cost of mitigating carbon emissions with use of SIPH in dairy industry in India are presented in this paper. Seven locations in India with dairy plants have been selected and annual useful thermal energy output of SIPH systems at these locations has been estimated. Further, levelized unit cost of useful thermal energy (LCUTE) delivered by the SIPH systems is estimated and a comparison with the existing process heating options being used in the dairy industry in India have been made. Other measures of financial viability such as discounted payback period, net present value and internal rate of return for an investment in SIPH systems in dairy plants have also been estimated. Finally, the cost of carbon mitigation with use of SIPH in dairy industry in India has been estimated. Results presents that in terms of LCUTE solar industrial of process heating systems doesn’t seems financially viable. Moreover, payback period of the SIPH systems are very higher thus lower value of NPV and IRR, therefore, their use does not seem to be much attractive. Also the cost of carbon emissions likely to be mitigated with use of SIPH is on higher side. Therefore, In view of the long term economic and environmental benefits of using SIPH in dairy industry there is a need of marginal support to ensure their financial viability as compared to fossil fuel based systems, the government may consider providing suitable incentives for the same.

Techno‐economic analysis of various biochemical conversion platforms for biosugar production: Trade‐offs of co‐producing biopower versus pellets for either a greenfield, repurpose, or co‐location siting context

AbstractIn theory, biosugar for conversion to bioproducts can be produced economically from a variety of biomass types in many different technological, co‐production, and biorefinery siting contexts. In this paper, process modeling and financial analysis were conducted for all permutations of biochemical conversion pathways, global biomass types, co‐product options, and biorefinery siting contexts for biosugar production. Minimum sugar revenue (MSR) required to achieve a 15% internal rate of return values for scenarios examined ranged from $150–$748 per tonne. The scenarios with the lowest MSRs were sugarcane in South America and Asia, assuming hot water cook and co‐location or repurpose siting contexts. Another financially optimized scenario is corn grain, also assuming hot water cook, co‐producing distiller’s dry grains and solubles (DDGS), in a repurpose siting context. Against a benchmark sugar price of $408 per metric tonne, an internal rate of return on investment of >15% can typically only be achieved via previously demonstrated conversion pathways using sugar cane and corn grain. Major cost drivers were feedstock cost per metric tonne of carbohydrate, sugar yield, capital investment per annual metric tonne of sugar produced, residue value, and siting context. Near‐term promising technologies include autohydrolysis and dilute acid pathways. Generally, scenarios are financially enhanced by co‐location or repurposing, reducing capital expenditure (CAPEX) by about 33% and 50%, respectively, with negligible impact on cash cost. Conversion process complexity drives capital investment, making some scenarios infeasible despite high sugar yields. Any of the five major cost drivers can impact the order of financial attraction of scenarios, with the outcome of the analysis typically not obvious in advance. © 2018 Society of Chemical Industry and John Wiley & Sons, Ltd

Political risk assessment by multinational corporations in African markets: A Nigerian perspective

Political risk assessment (PRA) is one of the determinants of foreign direct investment (FDI) and the competitiveness of multinational corporations (MNCs), yet little is known about its use in African markets. This study critically investigates the PRA techniques used by MNCs in Nigeria and their applicability. It uses a multimethod approach to analyze data collected from MNCs and the data set of the International Country Risk Guide (ICRG) PRA annual rating for Nigeria from 2011 to 2015. The findings reveal that most firms use qualitative, rather than quantitative, PRA techniques. Regional variations in the outcome of PRA within Nigeria could also contribute to the low use of quantitative techniques. This article identifies that firms are prepared to invest in Nigeria, in spite of high political risk, due to its economic and financial attractiveness. This article's findings offer some implications for practice with some suggestions on how it could influence firms’ internationalization and their conduct of PRA.

Institutional and community solar cooking in India using SK-23 and Scheffler solar cookers: A financial appraisal

Abstract Financial appraisal of two solar cookers (SK-23 and Scheffler dish) that may be used for institutional/community cooking is presented. For each solar cooker type, three different categories in terms of performance and cost as prevailing in the market have been considered. Annual numbers of solar cooked meals and consequently the values of several measures of financial performance are estimated for three locations in India with varying climatic conditions. As per the estimates obtained in this study a SK-23 solar cooker can cook from 39% to 60% of the meals during the year while, the corresponding range for Scheffler dish based solar cooker is from 59% to 85% at these locations. The discounted payback for SK-23 varies 6.2–9.2 years while the same for Scheffler dish varies from 9.5 to 11.7 years. The financial attractiveness of SK-23 is adversely affected by its poor performance in high wind, while the relatively higher capital cost of the Scheffler direct cooker apparently makes it financially unattractive. Thus, there is an urgent need to encourage research and development on solar cookers to reduce their cost and also to improve performance.

Industrial technologies of reconstruction of large-panel buildings of the 1-335 series

Technological and constructive decisions of modernization and reconstruction of large-panel buildings of the first mass buildings are considered in the article. The technology of the reinforced concrete diaphragms of the building hardness brings the seismic stability of the building to the normative level. The technologies of erecting a building with bay windows, as well as the construction of attic floors by the method of mounting bulk units enlarged onto the span have been developed. The folding volumetric blocks and the technology of their installation are proposed. The analysis of reconstructive works in two variants showed their rationality and financial attractiveness in comparison with the dismantling of buildings.

Costs, viability and risks of organic tomato production in a protected environment

ABSTRACT The aim of this research was to evaluate the agro-economic performance of two table-tomato cultivars (Santa Clara and Siluet), under organic cultivation and in a protected environment. Through the analysis of production costs, economic viability and project risk, it was sought to generate a proposal for agricultural profitability having less socio-environmental impact on family farming. To achieve that, the Operating and Total Production Costs, Net Present Value (NPV) and Internal Rate of Return (IRR) were calculated. A sensitivity analysis and economic risk analysis were then carried out. Both cultivars under consideration presented satisfactory economic indicators for the period being analysed. Judging by the criterion of Net Present Value, almost all discount rates (except for the rates of 10 and 12% for the Santa Clara cultivar) were found to be economically viable, with internal rates of return higher than the annual rate of 6%, the minimum rate of financial attractiveness considered. The sensitivity analysis revealed that price received and productivity have the greatest interference on project profitability, followed by packaging and labour costs. The estimated economic risk was relatively low, with a probability of obtaining a negative NPV of 30.31% in the case of the 'Santa Clara', and 4.48% for the 'Siluet'. It is therefore concluded that the organic production of 'Siluet' and 'Santa Clara' tomatoes under protected cultivation is an economically viable activity, with emphasis on the agro-economic superiority of the Siluet cultivar.

Development of Investment Strategy Applying Corporate Social Responsibility

Purpose of the article: Due to globalization processes and technological development, companies are having more influence on global society than ever. Therefore, business misconduct causes enormous harm to stakeholders, whereas ethical behavior is becoming an important issue. The goal of the following study is to verify and measure a positive effect from investments in social activities on financial attractiveness of companies in the form of its stock portfolio value growth. Methodology/methods: In order to achieve the goal of the research, quantitative analysis is used by comparing performance of stock portfolio of companies having long-term investments in social activities with market index increment. The quantitative results are accompanied with the review of corporate social responsibility definition and some practical issues on governmental and corporation level. Scientific aim: The conducted research contributes both to the scientific discussion about development of appropriate investment strategy in companies applying CSR principles as well as to the discussion of related terminology used in the field. Findings: The research has shown that engagement in the CSR activities tends to have strong positive effect on companies’ financial results and investors’ financial performance. The research proves this fact by comparing value increment of CSR-portfolio (+35.99% gained from January 2015 to March 2017) with market index (+22.37% in the same period). Conclusions: Regardless the positive result achieved in the study the authors have determined several gaps in the research, which will be discussed in the further studies on the field.

Meta Review of Critical Risk Factors in PPP Projects of Emerging Nations in South Asia

In recent years, Public Private Partnerships (PPPs) has been developed as one of the best approaches in many nations (like Australia, UK etc.) for delivering social infrastructure projects. PPPs are those risk sharing investment plans stipulated for public goods and services seen by governments as a mean to launch investment plans which would not have been imaginable within the existing public sector budget inside rational time. The multi objectives of PPP’s including to support infrastructure development, increasing construction and operational efficiencies, developed local economy, reducing costs, improving the service quality in embedding the private sector skills, knowledge expertise and funds have drawn growing interest from policy makers, industry practitioners and scholars. Whereas role of efficaciously implemented PPP projects seems to be very confined in emerging markets from South Asia. This paper offers pragmatic implications for investors in various types of infrastructure projects of emerging markets of south Asian countries like transportation, energy, communication, water supply, water sewage, education, health etc. This study uses SPSS for analysis of data through Run test, Kolmogorov Smirnov test & Mann Whitney-U test. This article identifies the critical risks and meta-analysis of risk factors criticality through questionnaire which was based on 20 years Meta review of literature on PPP projects, case studies, interviews from public/private sector, academicians and established ten most critical common risk factors in two countries (Bangladesh, Pakistan). The first most critical factor is the unsoundness of political government. The second important factor is the engagement level and consistent policies of governments regardless of change in political regime. The third critical factor is the financial attraction in project for investors. The fourth important critical factor is the obtainability of finance.

Entrepreneurial firms and financial attractiveness for securing debt capital: a Bayesian analysis

Using theoretical arguments grounded in venture financing literature and signaling theory, we examine the impact of both intended and unintended signals on the venture’s financial attractiveness perceived by external lenders. We develop two concepts, the venture’s (i) emergent volatility associated with operations and (ii) deliberate diversity of its financing portfolio, and assess their signaling impact on the firm’s overall financial attractiveness for securing debt. Using Bayesian inference on a large sample of growth-oriented entrepreneurial ventures in the United States, we obtain results that explain the ways in which emergent volatility and deliberate diversity act as unintended versus intended signals, respectively, thus affecting the venture’s financial attractiveness for securing debt capital from external lenders.

Public companies’ transparency in Ukraine: key regulatory requirements

Public companies as strategically important and economically powerful Ukrainian companies should be classified as public interest entities in the context of European integration. Based on the research methodology of the Index of public companies’ transparency of the Center for CSR Development and research of largest public and private companies’ transparency in Ukraine, conducted by TI, the authors concluded about critically low level of transparency of public companies in the disclosure of audited financial reporting, as well as non-financial reporting. This research may contribute to the existing literature in regard to identifying key areas of improving transparency of public companies in Ukraine on the basis of amendments to the existing order of reporting and additional disclosure of non-financial information and carrying out the statutory audit, taking into account European experience. Among the issues that require further study, the authors should name the relationship between the level of transparency of public companies, their financial efficiency and investment attractiveness. Among the promising areas of research, the extension of the study on transparency of public interest entities after the publication by the European companies of the first statements prepared in accordance with Directive 2014/95/EU is worth noting. Limitations of the research carried out concerned the size of the sample Ukrainian public companies analyzed.

Biophysical and Economic Analysis of Black Spruce Regeneration in Eastern Canada Using Global Climate Model Productivity Outputs

We explore the biophysical potential and economic attractiveness of black spruce (Picea mariana) regeneration in eastern Canada under the high greenhouse gas emission scenario (RCP 8.5) of the Intergovernmental Panel on Climate Change (IPCC). The study integrates net primary productivity and net ecosystem productivity estimates from three major global climate models (GCMs), growth and yield equations specific to black spruce, and economic analyses to determine spatially varying investment values of black spruce regeneration—both including and excluding carbon sequestration benefits. Net present value (NPV) was used to represent financial attractiveness. It was assumed that stands would not be harvested at volumes less than 80 m3·ha−1. A baseline case with the stumpage price set to $20 m−3, stand establishment cost $500 ha−1, and the discount rate 4%, was used with wide-ranging sensitivity analyses conducted around these assumptions. These values represent the wide range of choices and outcomes possible with black spruce regeneration investments. The results indicated a latitudinal gradient in economic attractiveness, with higher forest productivity and NPVs in the southern portion of the study area; however, black spruce regeneration was not economically attractive unless regeneration costs were very low (representing something closer to a natural regeneration type scenario) and/or carbon sequestration benefits of at least $5 ton−1 CO2 were realized. In general, the optimal harvest rotation age increased with increasing carbon price by approximately 9 to 18 years. Results of this study highlight the importance of future price and yield expectations and establishment costs in evaluating forest investments.

Avantium, AkzoNobel and others partner for wood-based chemicals production

With regard to a successive penetration of renewable energies and the implied need for system flexibility, stationary battery storage systems (BSS) are seen as hybrids, which can manoeuvre either on the demand or on the supply side, due to the bidirectional transformation process. In the scientific debate, the revenue side for BSS are often just titled and partially mapped for individual markets, which frequently leads to the conclusion that the investment in BSS does not pay off. Therefore, the core concept of the paper is the strategy to combine applications and their values, in order to extend the financial attractiveness. To specify and exemplify monetary value propositions (applications) and value networks (benefits) as well as the combination theory, a single and combined revenue model is examined: energy trading via day-ahead market (arbitrage) and energy trading in combination with frequency support via secondary control. The results show, that depending on the technology, the combined revenue model reduces the load factor and thus theoretically expands the BSS lifespan. Moreover, with modified market rules and individual bidder strategies there is a potential to generate higher proceeds with the combined revenue model.

Factor Investing: The Rocky Road from Long Only to Long Short

The performances of factor investing rely heavily on short sales, not only for building the initial long-short strategy, but also for regularly rebalancing the positions. Since short selling is subject to both legal restrictions and substantial costs, this paper examines how severely restrictions on short positions affect the financial attractiveness of factor investing. To fill the gap between unconstrained long-short allocations and restricted long-only portfolios, we consider two in-between strategies: the first imposes that only the market can be shorted, and the second is the so-called “130/30” scenario that caps total short exposure at 30%. The takeaways are twofold. First, any infringement to the long-short strategy can harm significantly the mean-variance performances of efficient factor-based portfolios. This is linked to the fact that the total short exposure of optimal long-short portfolios can reach figures around 400% and above. Second, the factor portfolios built originally by Fama and French (1992) with the purpose of developing asset pricing are impressively clear-sighted when it comes to portfolio management. Indeed, combining these portfolios generates mean-variance performances similar to those of optimized long-short portfolios, except for low levels of volatility.

Amantadine and phenytoin: patent protected cases of drug repositioning

Repositioning of old drugs in new indications is a hot topic. However, there are some hurdles to take, and one is related to financial attractiveness. We will discuss two examples to solve this problem based on patents: phenytoin cream for neuropathic pain and amantadine extended release for dyskinesia and other neurological disorders, and discuss amantadine, its history of repositioning and its patents in more detail. Both molecules are respectable old compounds, phenytoin was synthesized more than a century ago, and amantadine in the 50s of last century. Amantadine was first recognized as an antiviral compound in the 60s of last century, and was approved by the FDA for flu prophylaxes in 1966. Parkinson was its first repositioning indication, triggered by a case study in 1968. Subsequently a great variety of indications were explored, from fatigue in multiple sclerosis, enuresis nocturna, ADHD, up to pathological gambling and recovery after head injury. Amantadine is currently developed as an extended release formulation for levodopa-induced dyskinesia in Parkinson’s disease (preapproval phase). It is protected by a patent from 2009, claiming a special formulation and time of intake. While its antiviral mechanism of action has been clarified, the mechanisms of action in other indications are still quite enigmatic. At the end of last century, it was stipulated that amantadine and comparable drugs with unexplained mechanisms may deserve additional studies to enfold its full therapeutic potential. Based on an analysis of the clinical perspectives for amantadine at that time it was felt necessary to developing an infrastructure for funding research on new purposes for older drugs after they lose patent protection. Nearly 2 decades later such recommendation still remains valid.

Love Your Leave, Don't Leave Your Love! Paid Parental Leave and Children's Living Arrangements

We examine how a German paid parental leave reform causally affected early childhood living arrangements. The reform replaced a means-tested benefit with a universal transfer paid out for a shorter period. Using a difference-in-differences design, we find that the reform increased the probability that a newborn lives with non-married cohabiting parents. This effect results from a reduced risk of single parenthood among women who gained from the reform. We reject the economic independence hypothesis and argue that the effects for reform winners are consistent with alternative hypotheses related to increased female financial attractiveness and increased paternal involvement in childcare.

Effect of incentives on the financial attractiveness of solar industrial process heating in India

India has a huge industrial demand for process heating at temperatures that can be provided with commercially available solar collectors. Government of India with support from multi-lateral agencies has initiated an ambitious programme for promoting large scale adoption of Solar Industrial Process Heating (SIPH) in the industrial sector of the country. This paper presents the details of an attempt to study the effect of several existing and potential incentives on the financial attractiveness of SIPH systems in India. A case of solar process heating in dairy industry has been presented to demonstrate the relative efficacy of different incentives on the economics of SIPH systems in terms of their impact on levelized cost of useful thermal energy delivered. Finally, policy implications of the results obtained have been discussed.