Internal Returns Research Articles

Internal Equity Annual Changes and Security Returns of Companies Listed in The Nairobi Securities Exchange.

This study examined the effect of annual changes in internal equity on ordinary equity security returns in Kenyan public limited firms. Internal equity is the portion of a company's equity generated through retained earnings and the issuance of new shares to existing shareholders. The study was guided by the research philosophy of positivism, given that it relied on quantitative data and espoused the scientific approach to research. It adopted a causal or explanatory research design to check how the annual changes in public firms' internal equity impacted a firm's stock market value. A census study of 67 public companies was employed, of which 49 met data requirements. The study used secondary data from the company's financial statements for eleven years, from January 2012 to December 2022. The data collected was analyzed using descriptive and inferential statistics. The hypothesis that annual changes in internal debts had no significant effect on security returns was tested at a 95% confidence interval using the t-statistic and p-value. The study adopted panel data to carry out the research analysis. Panel regression analysis using the random effects model was undertaken after appropriate normality, model specification, homoscedasticity, linearity and autocorrelation diagnostic tests. Findings reveal significant variability in internal equity changes across sectors. Correlation analysis establishes a positive and significant association between internal equity changes and security returns. Panel regression analysis further confirms a strong and positive relationship, indicating that an increase in internal equity corresponds to higher returns on equity securities. The results emphasize the importance of internal equity in signalling a company's financial health and stability, impacting investor confidence and potentially leading to higher equity security returns. Investors are urged to conduct sector-specific analyses, considering variability in financial structures. The study contributes valuable insights to understanding internal equity's role in influencing financial well-being and security returns in the Kenyan business landscape.

Assessing the energy trap of industrial agriculture in North America and Europe: 82 balances from 1830 to 2012

Early energy analyses of agriculture revealed that behind higher labor and land productivity of industrial farming, there was a decrease in energy returns on energy (EROI) invested, in comparison to more traditional organic agricultural systems. Studies on recent trends show that efficiency gains in production and use of inputs have again somewhat improved energy returns. However, most of these agricultural energy studies have focused only on external inputs at the crop level, concealing the important role of internal biomass flows that livestock and forestry recirculate within agroecosystems. Here, we synthesize the results of 82 farm systems in North America and Europe from 1830 to 2012 that for the first time show the changing energy profiles of agroecosystems, including livestock and forestry, with a multi-EROI approach that accounts for the energy returns on external inputs, on internal biomass reuses, and on all inputs invested. With this historical circular bioeconomic approach, we found a general trend towards much lower external returns, little or no increases in internal returns, and almost no improvement in total returns. This “energy trap” was driven by shifts towards a growing dependence of crop production on fossil-fueled external inputs, much more intensive livestock production based on feed grains, less forestry, and a structural disintegration of agroecosystem components by increasingly linear industrial farm managements. We conclude that overcoming the energy trap requires nature-based solutions to reduce current dependence on fossil-fueled external industrial inputs and increase the circularity and complexity of agroecosystems to provide healthier diets with less animal products.

Improving efficiency of material flows in an automotive assembly plant: A case study

This paper investigates the in-plant logistics processes in automotive manufacturing and specifically, the material flows between the storage facility, the production lines, and the internal returns area. The aim is to improve the efficiency of the plant by looking at the current material flows of the case study company. Qualitative and quantitative data was collected through interviews and personal observations and was analysed. Using discrete event-based simulation, the current material flows were investigated. Our analysis showed that in plant’s internal returns area efficiency gains are possible by reducing traffic congestion. A solution with minor changes in the layout was proposed and tested which showed an increase in the capacity of the system and a reduction in delays.

Financial impacts of the Medicaid expansion on community health centers.

To determine the impacts of the Medicaid expansion on revenues, costs, assets, and liabilities of federally funded community health centers. We combined data from the Uniform Data System, Internal Revenue Service nonprofit tax returns, and county-level characteristics from the Census Bureau. Our final dataset included 5841 center-year observations. We used difference-in-differences model to estimate the fiscal impacts of the Medicaid expansion on community health centers. We employed event study models, state-specific trend models, and placebo law tests as robustness checks. Not applicable. On the revenue side, we found a $2.08 million relative increase (p=0.002) in Medicaid revenues, offset by a $0.44 million decrease (p=0.015) in total grants among community health centers in expansion states compared with centers in non-expansion states. On the expenditure side, we found a large but not statistically significant $0.98 million relative increase (p=0.201) in total expenditures among centers in expansion states. Uncompensated care for health centers in expansion states decreased by $1.19 million (p < 0.001) relative to their counterparts in non-expansion states. Community health centers in expansion states benefited from the increased, stable revenue stream from Medicaid expansions. While Medicaid revenue increased as a result of the policy, we find no major evidence of substitution away from other revenue lines, with one notable exception (i.e., substitution away from state and local government grants). From a policy perspective, these results are encouraging as the Biden Administration starts to implement the safety-net enhancements from the American Rescue Plan Act of 2021 and as more non-expansion states are considering opting into Medicaid expansions. It is anticipated that these added revenue streams will help to sustain health centers in the delivery of health care services to the underserved population.

Effects of Bank Specific Factors on Stock Returns of Listed Commercial Banks in Kenya

The objective of this study was to establish the effects of bank specific factors on stock returns of listed commercial banks in Kenya, with four specific objectives; to determine the effect of capital adequacy on stock returns of listed commercial banks in Kenya, to determine the effect of asset quality on stock returns of listed commercial banks in Kenya, to determine the effect of earnings ability on stock returns of listed commercial banks in Kenya and to determine the effect of liquidity on stock returns of listed commercial banks in Kenya. The Kenyan banking sector instability within the stock market has been of great concern as depicted by continuous fluctuations in the stock prices of listed banks. Studies undertaken in other stock markets displayed mixed findings and much concentration has been on the United States, Turkey and Indonesian stock markets. Hence, a study providing a Kenyan perspective on the link between banks’ internal environment and stock returns of listed banks was crucial. The study was based on market portfolio theory, efficiency structure hypothesis and the buffer capital theory. The research targeted all the 11 listed commercial banks at the Nairobi Securities Exchange. Quarterly data was collected for the period 2010-2019. A pooled panel regression model was used in the estimation of the significance of the impact of the variables. Findings of the research established that capital adequacy and earnings had a significant effect on stock returns. The study recommends that commercial banks should improve their capital base and expand their asset quality through better loan management.

A Relação entre a Responsabilidade Social Corporativa e a Transferência de Conhecimento como Fontes para Geração de Valor Compartilhado

A responsabilidade social corporativa (RSC) deve ser vista de forma estratégica, como fonte para a geração de valor compartilhado, seja ele tangível ou não, para a empresa focal e seus stakeholders. A literatura apresenta que empresas com atuação de RSC estratégica possuem maior acesso ao conhecimento externo. Contudo não é claro como se dão as relações entre empresa focal e seus stakeholders e quais impactos envolvidos. Assim, o objetivo deste artigo é analisar como empresas socialmente responsáveis e com diferentes abordagens estratégicas geram valor compartilhado por meio da transferência de recursos e conhecimento com seus stakeholders. Utilizou-se casos polares e uma abordagem qualitativa, por meio de entrevistas, desk research e análise do discurso. Os principais stakeholders identificados foram: comunidades locais; governo; empresas de P&amp;D e; clientes empresariais. As empresas transferem recursos e conhecimento para as comunidades locais e aos principais stakeholders. O inverso também ocorre. Os stakeholders e as empresas analisadas fornecem um exemplo de relação simbiótica, onde há desenvolvimento social e geração de vantagem competitiva, atingindo quatro níveis: empresarial, comunidade local, clientes empresariais e meio ambiente. Mesmo figurando em diferentes posições na cadeia de suprimentos, as relações entre empresa focal e seus stakeholders geram valor numa relação ganha-ganha, implicando que o investimento em RSC traz retornos externos e internos. O artigo contribui ao tratar conjuntamente diferentes abordagens teóricas para explicar como se dá a geração de valor compartilhado. Em complemento há a elaboração de uma figura que sintetiza o argumento apresentado e foram elaboradas proposições de base teórico-empírica.

Internal Governance Does Matter to Equity Returns but Much More So During “Flights to Quality”

Although few doubt that good internal governance helps firms perform better, the statistical evidence is actually mixed because the positive effects of good corporate governance matters much more so at some times than others. The statistical link is strongest during “flights to quality,” when market sentiment turns bearish and pessimistic but weakens for long periods of time during bull markets and low market volatility. Using more than ten years' evidence from Australian firms, the authors show that internal governance is related to both firm value and performance and that firms with stronger governance are less risky, generate higher equity returns and perform significantly better during market downturns. When risk aversion is high, demand for well‐governed firms increases and investors discount the value of firms with potential agency conflicts. This time‐varying relationship between internal governance and returns may explain both the limited explanatory power of governance on firm value and the mixed empirical evidence reported in previous studies.Firms with strong internal governance do earn significantly higher stock returns compared with firms with weak governance; but that also means that the value of governance is not fully incorporated into prices, thereby explaining the limited explanatory power of governance on firm value.

Relative importance of fishing and natural mortality for spotted seatrout (Cynoscion nebulosus) estimated from a tag-return model and corroborated with survey data

Abstract The spotted seatrout (Cynoscion nebulosus) is one of the most economically important sportfish in the U.S. South Atlantic and Gulf of Mexico, including at its northern distributional extent in North Carolina and Virginia. The recent stock assessment for this region used an assumed fixed rate of natural mortality (M), obtained from a general life-history relationship based on weight. However, biased estimates of fishing mortality (F) could result if the life-history proxy failed to capture either the magnitude or temporal variation in M. Data from the first comprehensive tag-return study of spotted seatrout in this region were used in a Bayesian statistical modeling framework to estimate F and M. Both laboratory and field studies, including high-reward and double tagging, were conducted to obtain estimates of auxiliary parameters (i.e., tag-reporting rate, tag loss, and tagging mortality) necessary for the tag-return model. There was no measured mortality associated with tagging, but reporting rate and loss of internal anchor tags limited returns in this study. From 2008 to 2012, tag-return model estimates of bimonthly instantaneous mortality rates ranged from 0.003 to 0.067 2-mo−1 for F and from 0.002 to 2.850 2-mo−1 for M. Annual estimates of F were much lower than M for the three years studied, and annual M-estimates were higher than those used for spotted seatrout in this region’s recent stock assessment. Bimonthly estimates of total mortality rate (Z) from tag-return data were similar to bimonthly estimates of Z from an independent analysis of concurrent gill net survey data, which corroborates the variability and magnitude of mortality estimates determined from tagging. A strong seasonal influence (i.e., winter severity) on annual loss of spotted seatrout was observed, suggesting that future assessments and management measures for this stock would be improved by explicitly accounting for temporal variation in M in models of fishery population dynamics.

Assessing economic and environmental benefits of dedicated energy cane using a simulation tool: ReefCane®

Today, the use of sugarcane bagasse to produce electricity is widespread in the sugar industry. The use of a whole-stalk harvester, in a dedicated industrial production unit, is new. This new industry and the cultivation of energy cane could provide economic benefits for producers and industry, as well as an environmental benefit for the community. It could also be an opportunity for territories that depend on imports to reduce their dependence on imported energy. ReefCane®, a simulation tool, was developed specifically to assess the financial feasibility and environmental benefits of different production and management scenarios for electricity production. The tool is made up of two parts: (a) the first assesses the price of cane and the price of electricity that would be financially feasible, and computes possible profits for growers and millers; (b) the second evaluates the environmental balance using life cycle assessment. This modelling approach was used tested one hypothesis in Réunion. Simulations highlighted the usefulness of the tool to assess the feasibility of this new industry. Simulations calculated for a 5 MWel power plant: (i) the price of electricity necessary to reach internal net returns around 8% depending on different yields; and (ii) the amount of CO2 equivalent emission avoided by the establishment of a cane energy sector compared to the current energy mix in Réunion.

Estimating Firms' Demand for Agglomeration

The market for commercial properties is characterised by extreme heterogeneity in demand. In this paper, we aim to gain more insight in the heterogeneity in demand for employment agglomeration and size of the rental property using a two-stage hedonic approach following Bajari and Benkard (2005). We use unique micro-data of properties’ attributes as well as of firm characteristics. Given assumptions on the functional form of the production function, we identify firm-specific parameters using a nonparametric control function approach that corrects for endogeneity. The results show that agglomeration benefits are capitalised in rents: a one standard deviation increase in agglomeration leads to an increase in the annual rents of about 6 percent. It is found that larger and business services firms are willing to pay (substantially) more for agglomeration. Furthermore, for office buildings a 10 percent increase in number of employees increases the marginal willingness to pay for floor space with 8 percent, which suggests that internal returns to scale are present.

Macroeconomic (in)stability and endogenous market structure with productive government expenditure

AbstractWe consider the congestion effect of productive government spending in a monopolistic competition model with endogenous entry, and analyze the possibility of local indeterminacy. Some main findings emerge from the analysis. First, the indeterminacy condition is independent of the monopoly power. Second, productive government expenditure can be a source of local indeterminacy, while a higher degree of public goods congestion lessens the beneficial effect of productive government expenditure, and therefore reduces the possibility of indeterminacy. Third, a higher degree of internal returns to scale is associated with a lower possibility for the emergence of indeterminacy when production externalities are present.

Single stage closed loop manufacturing-remanufacturing system profitability with different combinations of internal and external return flows: an analytical study

External returns could be in the form of warranty, line returns, obsolescence and end of life in a manufacturing system. Internal returns are process rejections in the new product manufacturing line. External return, which is a fraction of the new product manufactured, is acquired from customers/third parties and processed in reverse supply chain repair centre only whereas internal returns could be repaired either in the manufacturing line or remanufacturing line. This study deals with joint decisions on pricing, internal and or external returns percentage to maximise profitability in a single stage closed-loop manufacturing-remanufacturing system for different combinations of internal and external returns flows. Results show that a model with zero manufacturing defects gives maximum profit and the one with both internal and external returns processed in the same repairing centre gives the next best solution.

Tax Incentives and Charitable Contributions: the Evidence from Censored Quantile Regression

AbstractThis paper investigates the relationship between tax price and charitable contributions using the censored quantile regression (QR) technique, which can provide a complete description of the whole distribution of giving, and data from US Internal Revenue Service individual tax returns. The findings of the present study are as follows. First, the price elasticities of charitable contributions are all negative and consistently decrease in absolute value along the quantiles. Second, donors at lower giving quantiles are price elastic but donors at higher quantiles are price inelastic. Third, the income elasticities are positive and increase along the quantiles. Lastly, the effects of wealth, age, marital status, and the number of dependents vary across quantiles. All the empirical results show that the censored QR offers better explanations on the relationship between tax incentives and charitable contributions.

Updated Analysis of Circuit Reliability Test Results

The downhole oil and gas market is continually pushing for higher reliability at higher temperatures. Satisfying this need requires continuous improvement, driven by failure analysis of both internal testing and field returns. This paper discusses recent lessons learned from on-going tests. Results of unpowered circuit assembly tests are reviewed. Also, a detailed analysis of separate powered life testing is presented. The internal testing results are further discussed in the context of field return data.

Welfare Regimes and the Incentives to Work and Get Educated

This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using microeconomic data for more than 100 000 European individuals, we show that welfare regimes make a difference for wages and education. First, people-based and household-based effects (internal returns to education, and household wage and education externalities) generate socioeconomic incentives for people to get an education and work which are stronger in countries with the weakest welfare systems, that is, those with what is known as ‘residual’ welfare regimes (Greece, Italy, Spain and Portugal). Second, place-based effects and, more specifically, differences in regional wage per capita and educational endowment and in regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare regimes. Place-based effects have the greatest impact in the Nordic social-democratic welfare systems. The results are robust to the inclusion of a large number of people-based and place-based controls.

The Economic Evaluation System of the Highway Construction Projects Feasibility Study and its Computer Program Processing

Based on the theory of the current economic evaluation of the highway construction projects, the author makes clear and demonstrates the computer program processing and the principle of designing the models of the Economic Evaluation System of the Highway Construction Projects in this paper, and concisely introduces the clew to design the system, the constitutes and functions of the system and the key technology. Finally, the author designs the computer implementation program taking the computation of economic evaluation internal returns ratio target as the example, and carries on the confirmation by the project example computation.

Re‐energizing a product portfolio: case study of a pharmaceutical merger

PurposeIn 2007 global mergers and acquisitions (M&amp;A) activity totaled a record $4.38 trillion, up 21 percent from 2006. Despite current turbulence in the world financial markets, 44 percent of privately held businesses globally are planning to grow through acquisition in the next three years. Following a merger or an acquisition, a combined firm may need to streamline an inefficient product portfolio so as to increase revenues and profitability. The consequences of retaining inefficient portfolios can be more than internal competition and inadequate financial returns. This paper seeks to illustrate key processes, methods and the value of strategic marketing research and science in helping make critical decisions that reshape an inefficient portfolio of 12 pharmaceutical products, created as the result of a merger of two large, global pharmaceutical firms.Design/methodology/approachUsing a case study, the paper posits that taking a customer‐centric, market‐driven view of the value of products in a portfolio almost always results in significant insight that helps streamlining. Applying relevant tools and techniques from the disciplines of strategic marketing, market research and marketing science crystallizes insight into objective criteria that can then be used to make informed and valid decisions.FindingsResults illustrate the importance of customer‐centric, market‐driven constructs in influencing critical market outcomes, which, in turn, provide rational insight into structuring existing product portfolios. Product, customer and market drivers that drive product and portfolio performance are explicated and recommended for analysis and ongoing tracking. Results are presented in terms of altered customer behaviors, product and portfolio revenue and profitability.Originality/valueThe paper highlights the critical role of relying on the core elements of strategic marketing and research in solving one of the most common and important business issues of our time. Key themes are stressed through focusing on insights reiterating the role of core marketing principles such as differentiation, positioning and strategy simulations. When combined with the insights provided by comparable other business functions such as financial modeling and valuation, this can only result in smart business strategy.

ABORDAGEM DETERMINÍSTICA E DE SIMULAÇÃO DE RISCO COMO INSTRUMENTOS DE ANÁLISE DE VIABILIDADE FINANCEIRA EM INVESTIMENTOS IMOBILIÁRIOS

Nowadays, the real state market is one of the most significant sections of the Brazilian economy being considered great employment generator and income. This facilitates to move great volumes of financial resources, due its high level of sectorial interrelation. This way, the success of the investment in real state enterprises is fundamental, because this is an key-activity for the national development. Because of that, it makes necessary a previous analysis of financial viability so that the entrepreneur has larger safety taking his decision. However, there are few works specifically linked to the real state section exist. Like this, the present study had a objective to accomplish an analysis of financial viability, complemented by simulations of risk of a project of a real state investment, which consists of the construction of three residential buildings in the municipal district of Viçosa. The financial analysis was accomplished by the methods of evaluation of real state projects and, for the risk analysis was used the technique of Monte Carlo' simulation, using the program @RISK.. The minimum rate of attractively (MRA) considered in the case studied was 1.5%. From the financial analysis, the following data were obtained: payback in the 19th month; liquid present value (LPV) of R$250,688.57; rate of internal returns (RIR) of 5.42% per month and profit index (PI) of 1.27. The result of the simulations, indicated for the exit variables, LPV, RIR and PL medium values of R$ 194.899, 30.5% a month and of 1.26, respectively. For the distributions of accumulated probabilities it can be concluded that this project of real state investment is financially viable and it has low risk. As conclusion, the process of simulation techniques in the generation of information has extreme importance for taking decisions. Key Words: Financial viability. Simulations of risk. Real state investment.

Production Externalities of Education: Evidence from Rural Ethiopia1

Schooling has externality effects in agriculture when, in the course of conducting their own private economic activities, educated farmers raise the productivity of their uneducated neighbours. This paper seeks to determine the potential size and source of such benefits for rural areas of Ethiopia, where school enrolment is low and the private returns to education may not be apparent. Average and stochastic frontier production functions are estimated, including household and community education, as explanatory variables to measure the productivity and efficiency of farmers. In each case, internal and external returns to schooling are compared. We find substantial and significant externality benefits of education in increasing average production and shifting out the frontier. External benefits of schooling may be several times as high as internal benefits in this regard. However, we are unable to find evidence that technical efficiency is subject to externality effects. Our results suggest that adoption and diffusion of innovations that push out the frontier is the source of externalities to schooling.

Returns in process industries: a managerial perspective

PurposeThe key objective of the paper is to present the results of a survey that captured a wide‐ranging view of reuse practices in process industries with the intent of determining current practice and the key managerial issues for reuse in process industries. The paper discusses the sources of products and material for which re‐use decisions must be made in process industry environments. It offers managerial insights for companies that seek opportunities to reduce their operating costs by reusing products, cleaning agents, and ingredients that can become available through a reverse supply chain analysis.Design/methodology/approachThe authors used an exploratory survey methodology with manufacturing plants randomly drawn from a professional organization where the members stated in their profiles that they were employed at a facility that was primarily involved with process manufacturing. Both internal and external returns were analyzed using descriptive statistics techniques.FindingsThe results indicate that reverse networks for external returns must consider storage conditions and timing due to degradability. Also, tracking systems are necessary to monitor the product once it has left the facility due to contamination potential. Additionally, managers could benefit from development of a decision model to facilitate re‐use decision‐making.Originality/valueThe emphasis is on exploring the nature of re‐use in process industry plants and on bringing managerial issues to the attention of companies that are handling these returns and seeking to improve their performance on returns.