High Capital Intensity Research Articles

WILL WE BE ABLE TO USE RECYCLED PLASTICS OR SHALL WE DECIDE FOR PACKAGING FREE PRODUKCTION?

Recycled plastic and its use are imperative for preserving the environment, including proper plastic wash-out. Will we ever be able to push the Czech population and firms to use recycled material? Or is it happening spontaneously? A questionnaire created on Google Forms involves ten legislative and motivational questions comprising relevant data on the amount of plastic in municipal waste between 2010 and 2020 from the Czech Statistical Office. We found that the population understands the importance of using recycled material and recycled plastic without the government's impulse. Despite the high capital intensity, the state should impose taxes to protect the sustainable environment. We suggest a comprehensive and in-depth survey to acquire more accurate data.

Studi Literatur: Determinan Wajib Pajak dalam Melakukan Agresivitas Pajak

Taxation is one sector that is able to show its contribution to APBN revenues. However, practice in the field shows that many taxpayers try to cut their tax burden through tax aggressiveness. This article was written with the aim of conducting a literature study/study of several factors that can determine a taxpayer's tax aggressiveness. This study utilizes secondary data by reviewing 36 articles obtained from the Google Scholar database. Articles to be reviewed are first selected with certain criteria. The review of the article gives the result that differences in the way taxpayers and the government view taxation can foster a desire for taxpayers to lower their tax burden through tax aggressiveness. Taxpayers who carry out tax aggressiveness are caused by several factors, namely high capital intensity, large company size, high profitability, leverage, and low CSR disclosure. The implications of this research are expected to be able to represent the urgency of the government's function to implement various efforts in order to increase taxpayer awareness not to carry out tax aggressiveness.
 Keywords: Tax Aggressiveness; Capital Intensity; Company Size; Profitability; Leverage; CSR

How do technological innovations affect corporate investment and hiring?

In this paper, we study the relation between technological advancement, and corporate investment and hiring. We build a corporate investment model with dynamic technology conditions, and we find the optimal investment and labor inputs increase in response to technological innovation shocks. Consistent with the model predictions, we empirically show that corporate investment and hiring increase following technological advancements, using various measures of technological innovation. Further, we find the effect is stronger for firms in more innovative industry, firms with higher capital intensity and firms with higher market-to-book ratio. Our findings provide evidence for the endogenous growth theory, i.e., firms with successful innovations tend to expand in capital investment and employment, suggesting technological innovations are, to some extent, Hicks-neutral.

Enterprises of agricultural sector of the Republic of Kazakhstan: efficient functioning

The goal is to consider the problems and prospects for the development of enterprises in agricultural sector. Methods – analysis and synthesis, determination of absolute and relative indicators, abstract-logistical, economic-statistical. Results – the authors note the main features of agricultural production: high capital intensity, long payback period, low profitability, seasonality, dependence on natural and climatic conditions. Enterprises are insufficiently provided with modern technology, social infrastructure is poorly developed, soil fertility is declining, level of income of the rural population is much lower to income in other industries. At present, effective programs on development of agro-industrial complex and support for agricultural producers have been developed in the republic. The article presents data on the number of registered producers of agricultural products in the Republic of Kazakhstan: legal entities, individual entrepreneurs, peasant (private) farms, households. The volumes of gross output of agricultural goods, production of livestock products in Kazakhstan, cattle products sales in slaughter weight for all categories of farms are shown. It was revealed that for some types of food, dependence on imports remains: meat and milk processing products, poultry meat, vegetables and fruits. The main directions of development of AIC are substantiated: measures to ensure food security; digitalization and robotization; attraction of domestic and foreign investments; application of the achievements of selection and breeding work in the livestock industry; strengthening scientific potential by improving training of highly qualified personnel. Conclusions – specifics of modern economic entities is their broad specialization: the presence of several workshops for heat treatment, sterilization and preparation for sale. There are also highly specialized agricultural enterprises, which as a rule, are producing one type of product, for example, dairy farms, greenhouses, nurseries.

Farm valuation: A comparison of methods for French farms

AbstractFarm transfer is increasingly seen as fundamental to the development of agriculture. One of the major challenges is to assess farm value in the context of an opaque market for farms. We contribute to the scarce literature on farm valuation by empirically applying three valuation methods to the Farm Accountancy Data Network database for France in 2017 and 2018 and for five types of farming. The three methods—the fundamental method, the patrimonial method, and the financial method—are well known for the valuation of companies, but have yet to be implemented widely for farms in the empirical literature. The results show that wine‐growing farms have the highest values on average. Pig and beef farms have high average patrimonial values, reflecting their high capital intensity, but beef farms have the lowest average values calculated with methods based on cash flows, revealing unfavorable market conditions for these farms. The results further reveal that total farm output drives the value upward, but that high farm labor, indebtedness, and age contribute to reducing value. Our findings also highlight that, in practice, the differences in values across methods may be substantial.

Agro-industrial complex of the Russian Federation as an indicator of Russia’s readiness for an innovation breakthrough

Agriculture is a critical sector for the economy of any state, because it is the lifeblood of many other industries. The article provides an indicative analysis of the of the Russian economy readiness to enter the growth phase of the sixth technological order. The research is based on the postulate of the theory of long waves by N.D. Kondratyev, according to which the monitoring of innovation in the agricultural sector allows obtaining indicators of the phase of the economic cycle. The paper provides an assessment of the innovative development of world agriculture for compliance with global technological trends. The main indicators of innovation and economic growth in dynamics over the past few years are considered. The investment process specificity in country’s agri[1]cultural production due to geographical, logistic and economic factors, that leads to a high capital intensity of innovations in the industry, has been revealed. The main problem in the investment attractiveness of the industry is the low demand among farmers for research and development results due to their high cost, which forms the extensive nature of investments in the industry and their low profitability. Low efficiency of research and development financing in the industry is due to investments in basic research that is not demanded by the market. The reason for this phenomenon is explained by ageing of intellectual capital in the industry and the lack of institutional tools for its activation: low wages, lack of clear tools for managing innovation in the industry. Possible solutions to problems of the agriculture innovative development and increasing the agricultural sector attractiveness for investors are given.

SUSTAINABLE DEVELOPMENT OF THE AGRO-INDUSTRIAL COMPLEX AND SAFETY OF AGRICULTURAL PRODUCTS

Ensuring the sustainable development of the state, its food security, which is the basis of the social well-being of society, is impossible without a highly efficient agricultural sector. A decisive factor in the well-being of the agricultural sector is the availability of effective state regulation mechanisms. The situation in the agro-industrial complex causes reasonable complaints, it was not possible to unlock the export potential and solve the issues of full-fledged food security of the country. It was pointed out the need for a new, verified approach in the agricultural sector, creating conditions for processing raw materials within the country, attracting investment and the latest agricultural technologies, ensuring the stability of state support measures, increasing their effectiveness. Agriculture of Kazakhstan, being one of the priority directions of economic development, has a huge potential and large reserves. The main products of the domestic food and agricultural industry are flour, pasta, rice, meat, dairy products, mineral waters and beverages, sugar and confectionery products, oils and fats. In general, the agricultural sector is characterized by high capital intensity, long payback period, low profitability, dependence on natural and climatic conditions, which makes it less competitive compared to other sectors of the economy.

Methodological Approach to Planning and Financing the Fixed Capital Reproduction for Sustainable Development of the Fishing Industry

The article presents the results of scientific and research work on the creation of a methodological approach to the analysis of fixed capital reproduction for fishing enterprises. This study is relevant due to the fact that the fishery complex of the Russian Federation is currently called upon to provide a solution to many political and economic problems, which, in particular, include transition to an innovative type of industrial production, provision of food security, as well as maintenance of a favorable state of aquatic biological resources. Due to this industry's high capital intensity, the issues of choosing a methodology that make it possible to rationally control the fixed capital reproduction of fishing enterprises become especially important, which is likely based on an analysis of existing methods that allow planning these processes. The advantages of the developed methodological approach include the establishment of uniform methodological principles used to determine the economic efficiency of investments, new equipment, inventions and rationalization proposals, more accurate consideration of the time factor concerning the determination of the integral economic effect (for the entire service life of labor means), as well as the factor time by bringing one-time and ongoing costs for the creation and implementation of new and necessary equipment and the results of their application to one point in time (the beginning of the accounting year). The article includes the main advantages and disadvantages of financing the reproduction processes possible ways.

Mampukah Komisaris Independen Memoderasi Pengaruh Kinerja Keuangan Terhadap Tax Avoidance?

The purpose of this study was to determine the effect of capital intensity and leverage on tax avoidance with independent commissioner as moderating variable. The population in this study is the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2020. The method of determining the sample used purposive sampling and obtained 75 observation. The method of analysis in this study used panel data moderated regression analysis (MRA). The result of the analysis showed that the capital intensity has a positif effect on tax avoidance. The higher capital intensity, the lower the practice of tax avoidance. Leverage has no effect on tax avoidance. The higher laverage on company will not have an impact on tax avoidance. The proportion of independent commissioner can weaken the moderated effect of capital intensity on tax avoidance. The higher the independent commissioner will monitoring the capital intensity ratio on tax avoidance. Independent commissioner does not moderated the effect of leverage on tax avoidance. The proportion of independent commissioner has no impact on leverage decisions on tax avoidance.

Problems of Decision-Making in Implementation of Technological Innovations in Transport Industry

The article considers the features of transport as an object of technological innovation, due, on the one hand, to the service nature of the main activity and the specifics of innovative processes during provision of transport and logistics services, and, on the other hand, to the high capital intensity and technological complexity of the infrastructure transport complex, which is the focus point of technological innovation.The objective of the article is to substantiate the initial prerequisites for developing an alternative approach to making strategic decisions on development of transport organisations based on technological innovations, which, besides the traditional justification of economic efficiency, considers several non-economic factors. The method of substantiation is a systemic strategic analysis, which allows to study the features of the transport complex in the context of the factors of external environment and their dynamics.Regarding the Russian Federation, the scale of the national territory, natural and climatic diversity and uneven territorial distribution of the resource and production base determine the special role and place of transport in the national economy, which quite often leads to the need to make decisions on development of the transport complex based on predominantly non-economic factors (such as security, reliability, environmental friendliness, etc.) and on scientific, technical, political and socio-economic forecasts. At the same time, private enterprises (with or without participation of the state) dominate currently almost all transport sectors where they operate on the principles of profitability, investment attractiveness and competitiveness, which leads to inconsistency of internal decision-making criteria in the field of technological strategies.The ongoing change in the technological paradigm is an additional and significant factor determining trends in transport developments. It is based on the processes of digitalisation and digital transformation of the transport and logistics business. The problems of decision-making in implementation of technological innovations in transport industry, arising from its peculiarities, necessitate a revision of approaches since economic assessments of efficiency are not always able to reflect the real needs and feasibility of choosing mainstream trends in technological development of the transport system.The analysis of the features of the transport and logistics industry based on universal experience and cases in Russian practices in the context of formation of a new technological paradigm makes it possible to substantiate the methodology for making strategic decisions on implementation of technological innovations.

Beginning farmers' entry and exit: evidence from county level data

PurposeThis paper identifies factors that affect entry and exit of beginning, young and women farmers and ranchers.Design/methodology/approachThe empirical framework is fixed effects regression analysis that uses county level data to evaluate how barriers to entry, access to and use of credit, local economic environment, and climate affect entry and exit of Beginning Farmers and Ranchers (BFRs). The dataset is assembled from several sources matching the Census of Agriculture years for the period of 1997–2017.FindingsResults show that new farmers are more likely to enter in counties with more and smaller farms and with lower farm productivity, indicating that BFRs have the potential to improve the overall productivity in such counties if able to grow and succeed. The results also indicate that the high capital intensity nature of farming is an effective barrier to entry. BFRs are more likely to do better in counties where agriculture is more important to the economy and with more off-farm work opportunities. The net entry is positively associated with higher input/output price index and the use of insurance but is unaffected by government payments and farm and off-farm income. The authors observe substitutability between farming and alternative self-employment for more entrepreneurial young people. Net entry increases with availability of non-real-estate loans but decreases with real estate credit. Thus, for BFRs to acquire the assets needed to reach optimal scale, access to credit remains essential.Originality/valueThe authors are not aware of other work that estimates how barriers to entry and other economic factors including access to credit affect entry and exit of BFRs of various ages and young and women farmers using the Census of Agriculture data up to 2017.

Firm Innovation under Import Competition from Low-Wage Countries

In recent years, manufacturing firms in the United States have faced increasing import competition from low-wage countries, especially China. Does this competition hurt or help innovation by firms? This paper studies the effect of the surge in imports from China on innovation in the US manufacturing sector. We combine patent, firm and trade data during 1990-2006 for US publicly-listed firms in the Compustat dataset. We find consistent evidence that Chinese import competition had a positive effect on firm innovation, as measured by citation-weighted patent applications. This positive effect persists when we instrument import competition in the US by using Chinese import penetration in the United Kingdom. Next we investigate this relationship between import competition and innovation by considering industry and firm heterogeneity. We find that firms in low-tech industries and those with a lower degree of product differentiation show a significant positive response to import competition. Firms with a higher capital intensity and lower labor productivity also exhibit a greater response. These results are shown to be robust to a variety of measures for import penetration and innovation.

МОДЕЛИРОВАНИЕ ЭФФЕКТИВНОСТИ ИСПОЛЬЗОВАНИЯ ОСНОВНЫХ ФОНДОВ НЕФТЕХИМИЧЕСКИХ ПРЕДПРИЯТИЙ

Petrochemical industries are characterized by high capital costs and capital intensity, which is due to the multi-stage technology, the complexity of organizational structures and production processes, and the high costs of ensuring environmental efficiency and safety of production. In addition, many elements of the main production assets, including oil refining, ammonia synthesis, polyethylene production, are characterized by outdated bulky infrastructure and the involvement of large amounts of resources. Thus, when improving fixed production assets, it is necessary to take into account all the latest technologies and development concepts. Based on the foregoing, it follows that the emphasis is shifting from new construction towards reconstruction, modernization and technical re-equipment. The purpose of the article is to model the efficiency of using fixed assets of petrochemical enterprises using the example of Kazanorgsintez PJSC. Achieving this goal involves solving the following tasks: consideration of best practices in the modernization of production facilities; diagnosing the efficiency indicators of the use of fixed production assets of Kazanorgsintez PJSC; building a regression model for the efficiency of using fixed assets of PJSC Kazanorgsintez; forecasting trends in the use of the main production capacities for the future period. The article uses methods of descriptive statistics, applied methods of correlation-regression analysis and forecasting methods. The object of the study was the enterprise PJSC Kazanorgsintez, which is the largest petrochemical enterprise in Russia and Tatarstan, one of the largest manufacturers of high and low density polyethylene in Russia. The subject of the research is mathematical modeling of the effectiveness of the use of fixed assets of an enterprise. The results of the study will allow more targeted development of a set of measures to modernize the fixed assets of Kazanorgsintez PJSC.

ГОСУДАРСТВЕННОЕ РЕГУЛИРОВАНИЕ ИННОВАЦИОННОГО РАЗВИТИЯ РЕГИОНА В КОНТЕКСТЕ РЕАЛИЗАЦИИ ПРИНЦИПОВ «ЗЕЛЕНОЙ ЭКОНОМИКИ»

Annotation. Innovative economic development requires the use of high-tech technologies and qualitatively new approaches to the conditions for ensuring sustainable economic development. The transformation of the economy actualizes the issues of developing conceptual aspects of the development of regions and the state as a whole, the formation of mechanisms of state regulation and support. The study of trends in the development of the world economy and factors affecting the sustainability of economic development contributes to the development of effective mechanisms that promote economic growth and development. The construction of a national innovation system requires an integrated approach that takes into account the achievements of the world economy in the development of knowledge-intensive and innovative economic sectors, ensuring the implementation of the principles of a «green economy» focused on the careful use of resources and reasonable consumption. The innovative vector of development of the national economy is impossible without a comprehensive mechanism of support of public authorities. The innovative orientation of the economy implies a high capital intensity, which leads to the emergence of financial deficits, the disclosure of which is impossible without effective regulators. Economic sanctions, the withdrawal of foreign capital from the country exacerbate the current problems of limited resources for technological and industrial breakthroughs, but at the same time create opportunities to fill the vacated niches with domestic high-tech and innovative projects that contribute to sectoral renewal and the national economy reaching a new level. Innovative developments are designed to provide priority sectors of the economy with sustainable competitive advantages both in the domestic market and in world markets. The need for pharmaceutical, technological and energy innovations is growing. The state is focused on supporting fundamental, high–tech research – space, IT technologies, bioengineering, etc. However, innovative activity is necessary in all sectors of the domestic economy, which is acutely felt during the period of tough sanctions policy against Russia. The article raises the issues of state stimulation of innovation activity of economic entities as factors contributing to the sustainable economic development of regions. The analysis of the factors contributing to the growth of innovation is carried out, the need for state influence on the innovation processes of the region is substantiated.

The Problem of Determining Discount Rate for Integrated Investment Projects in the Oil and Gas Industry

The main aim of this paper was to examine specific approaches to determining the discount rate for comprehensive computation of investment projects efficiency in the oil and gas industry. The objective of the study was to develop a scientific approach for determining the discount rate for integrated oil and gas projects. The authors analyze dynamic methods for determining the efficiency of investment projects in the oil and gas industry and conclude that they are advisable for oil and gas projects due to the high capital intensity of the projects and their long payback period. Regarding the need to implement dynamic indicators of efficiency, the authors set the task of deter-mining the proper discount rate as a factor having a significant impact on effectiveness evaluation. The discount rate is proposed to be evaluated by solving the equation and finding the break-even point where the NPV (net present value) of the integrated project will be equal to 0 (taking into account the revenue of the subprojects included in the complex). The practical implementation of methodological approaches to assessing the discount rate for integrated projects is relevant due to the execution of large, systemically important and integrated projects. As a result of the study, the authors put forward a methodological algorithm for determining the discount rate of an integrated project which assumes an assessment of cash flows for the subprojects included in the complex; determination of the target rate of return for subprojects; and calculation of prices for products at which a complex project become break-even. The practical implementation of methodological approaches to assessing the discount rate for integrated projects is relevant due to the execution of large systemically important integrated projects.

Long-Term Energy Demand Forecasting Based on a Systems Analysis

—Energy demand forecasting plays a key role in solving the majority of problems connected with determining the economic and energy development prospects. In view of high inertia and capital intensity of energy generation facilities, the changes in the energy consumption structure and rates should be considered for a sufficiently long-term future of no less than 15 years. This adds much difficulty to the development of such forecasts, because it is necessary to take into account the possible results of technological progress in different sectors of the economy and changes in its structure. The suggested approach to energy demand forecasting is based on the systems analysis methods. Energy consumers are disaggregated by economic sectors, country regions, energy carriers, and their utilization areas. As a result, it becomes possible to take into account the possible future technological and structural changes in the economy, its differences in different regions, mutual replacements of energy carriers, and energy saving. The most important feature of the approach is that it involves the separation of economic and energy variables. Economic variables determine the development scales of economic sectors, and energy variables determine the energy consumption intensities in them. The separation of variables helps obtain essentially more accurate forecasts owing to the possibility of taking into account the differences in the variation trends of these variables in the forecast period. For forecasting the economic variables, a nonlinear conditionally dynamic model of interrelations between the economy and energy is used. The energy variables are forecasted on the basis of their links with economic factors, e.g., with cumulative investments in the fixed capital of the considered economic sectors. The discussed approach was implemented as the totality of adaptive simulation models united into the EDFS computing system. The approach was repeatedly and quite successfully used to forecast the energy demand for an up to 10–20-year horizon in solving various problems. The gained experience has demonstrated the correctness of applying the approach for solving long-horizon forecast problems. To illustrate the capacities of the approach, the electric energy demand forecast for the period of up to 2040 for the basic version of the social and economic development of Russia’s economy prepared on the basis of this approach is presented.

DO ENVIRONMENTAL INVESTMENTS FOR PRODUCTION PAY OFF? A STUDY IN VIETNAM’S SMALL AND MEDIUM-SIZED ENTERPRISES

Environmental preservation is one of the top priorities of the United Nations' sustainable development goals (SDGs). Environmental investments for production not only demonstrate corporate commitment to these universally accepted goals but also create a safe and healthy work environment for workers. However, previous studies have shown positive and negative effects of environmental investments for production on firm-level labor productivity. This paper aims to investigate how environmental investments for production influence labor productivity in Vietnamese manufacturing small and medium-sized enterprises (SMEs). An analysis of 1,176 valid responses by business owners or managers in Vietnam's manufacturing SMEs shows that environmental investment costs are positively associated with labor productivity. The results also confirm that labor productivity is affected by capital intensity, firm size and firm age. We realize that the impact of environmental investments for production on labor productivity is more advantageous in SMEs with higher capital intensity. Based on these research findings, SME-supporting policies should enable SMEs to get more capital to implement workplace environment investments, which lead to labor productivity and contribute to pollution control.Keywords: environmental investments, labor productivity, small and medium-sized enterprises, VietnamJEL Classifications: Q01, Q53, D24, D25DOI: https://doi.org/10.32479/ijeep.11836

Examining the determinants of small firms' performance in India

PurposeThe objective of the study is to analyse the impact of research and development investment on the firm performance of “small” scale firms vis-a-vis “medium”-scale firms.Design/methodology/approachThe dataset comprised of a balanced panel of 486 research and development conducting Indian manufacturing small and medium enterprises, constructed for the period of 2006–2017. Fixed Effects, Random Effects Model and Hausmann test were used to analyse the determinants of firm performance in manufacturing small and medium enterprises in India.FindingsIt was found that from firms’ research and development (R&D) investments in terms of performance could be attained if simultaneously internationalisation and higher capital intensity could be achieved.Practical implicationsManagers could pay specific attention to the antecedents of firm performance and calibrate their R&D investment, internationalisation efforts and capital intensity simultaneously to achieve higher growth and productivity. For policymakers, the results provide an insight into how the firms in both categories could be differently incentivised, such that resources are better utilised.Originality/valueThe study analysed the determinants of firm performance in small and medium-sized firms at a disaggregate level as well as at a sectoral level using fixed effects, random effects and lagged effects to arrive at novel results, which have important implications for their competitiveness.

Revival of the resource potential of cattle breeding as a factor in the development of competitiveness of enterprises of the dairy product subcomplex of the agro-industrial complex of Ukraine

Permanent crises in the Ukrainian economy, the devaluation of the hryvnia, the decline in incomes of the population and its purchasing power, increased competition on the world market, and the constant increase in world prices for food and non-food products created new realities of functioning of enterprises of the dairy sub-complex of the agro-industrial complex of Ukraine and led to its transformation. Therefore, the study of the reasons for the existence of these trends is very relevant. The purpose of the study is to assess the current state of the sub-complex and the development of practical recommendations for improving the efficiency of its functioning. The performed study was based on the use of methods: qualitative analysis and synthesis, economicstatistical analysis, comparisons, analytical and logical generalisations, etc. At the beginning of 2021, the total number of cattle in Ukraine was 2.874 million heads and over the past 10 years decreased by 1.952 million heads, including cows by 0.958 million heads. Milk production remains small-scale. In 2020, 9.263 million tonnes of milk were produced (17.66% less than in 2010). A substantial reduction in the volume of milk supplies for processing led to a reduction in the number of processing enterprises in 2020 by 69.14% compared to 1990. The main factors of transformation of the dairy sub-complex in Ukraine include: reduction of the number of cows, insufficient quantity of high-quality dairy raw product and their non-compliance with the regulations and standards of the European Union, low technological level of milk production, insufficient control over the quality of raw product, lack of modern equipment, high capital and labour intensity of production processes, rising prices for energy and other resources, reduced consumption of dairy products due to low purchasing power, increased competition in the world and internal markets of dairy products, etc. The conducted research should help to solve and highlight the main functional problems of milk processing enterprises that operate in the agro-industrial complex of Ukraine, the results of the above-mentioned studies can be useful and relevant for the revival of dairy cattle breeding in the post-war period

Brick by brick: Governing industry decarbonization in the face of uncertainty and risk

Basic materials such as steel and cement have been instrumental to modern society, but the production requires high energy inputs and is associated with significant CO2 emissions. Long investment cycles, slow turnover rate of the capital stock, and high capital intensity mean that basic materials industries are among the economic activities that will be the most difficult to decarbonize. Although the importance of addressing industrial emissions has been increasingly recognized, the development of measures and technologies that could deliver deeper emissions cuts has been relatively slow. In this paper, we present a conceptual framework focusing on four categories of barriers—market, technology, regulatory, and coordination—that hamper deep decarbonization in the basic materials industries. We use the Swedish basic materials industries and policy context to illustrate how the proposed framework can be understood and applied and broadly discuss policies that can facilitate the climate transition.