Investment In Assets Research Articles

The consequences of the 2017 US international tax reform: a survey of the evidence

The 2017 US tax legislation—widely referred to as the Tax Cut and Jobs Act (TCJA)—fundamentally transformed the US system of international taxation. It ostensibly ended worldwide taxation but introduced, for instance, a new tax on “Global Intangible Low-Taxed Income”. This paper surveys the emerging empirical literature on the impact of the TCJA’s international provisions. It documents five robust findings in this empirical literature. First, the TCJA led to a general decline in US MNCs’ foreign acquisitions. Second, the TCJA increased US MNCs’ investment in routine foreign tangible assets. Third, the reform did not lead to any change in profit shifting by US MNCs beyond the magnitude that would be expected based on the TCJA’s tax rate reduction. Fourth, The TCJA appears to have reduced the market value of US MNCs relative to domestic US firms. Fifth, the TCJA does not appear to have had any detectable impact on domestic US investment and wages (although there are some contrary results for capital expenditures). The welfare implications of these findings depend crucially on whether US MNCs’ are viewed as having engaged in too much or too little foreign activity prior to the TCJA. This depends on the choice of theoretical framework and the relevant normative benchmark, and cannot readily be resolved empirically.

The Implementation of Roy's Safety-First Criterion in Stock Portfolio Selection

Statistical data shows that the Indonesian capital market has experienced significant growth. This growth is attributed to public awareness of the benefits of stock investments. However, with an increasing number of new investors entering the stock market, attention to investment risks deepens. Many investors prefer stocks that are easily predictable and have low risk, as higher volatility increases the level of uncertainty in obtaining returns. The relatively high risk level in investing requires investors to minimize risks, one of which is by diversifying funds into various investment assets, commonly known as optimal portfolio selection. An optimal portfolio can be formed using various methods and approaches. One method for portfolio selection is the application of the Safety First Criterion, a method dependent on downside risk, referring to risks that result in losses. This article conducts a simulation of the implementation of Roy's Safety First Criterion using stock data from the largest companies in eleven sectors over the past year. These sectors include basic materials, communication services, consumer cyclical, consumer defensive, energy, financial services, healthcare, real estate, technology, and utilities. Based on this analysis, out of the eleven stocks, six stocks meet Roy's criteria: LIN, GOOG, AMZN, BRK-B, LLY, and AAPL, with respective weights of LIN=10.84%, GOOG=12.61%, AMZN=24.67%, BRK-B=1.37%, LLY=34.17%, and AAPL=16.35%. Using Roy's Safety First Criterion for selected stocks from various sectors indicates that the resulting portfolio has a very low risk level, specifically 1%. This means that by using the portfolio obtained from the eleven stocks, investors can achieve minimal risk, making this portfolio secure for new investors.

Return on Assets, Current Ratio, Debt to Equity Ratio, and Investment Decisions Affect the Value of Tourism, Hotel, and Restaurant Companies

Return on Assets (ROA), Current Ratio (CR), Debt to Equity Ratio (DER), and Capital Expenditure to Book Value of Assets (CAPBVA) Investment Decision on Company Value (Tobin's Q) is the purpose of this study. Using the annual financial statements of 35 companies in the Tourism, Hotel, and Restaurant subsector listed on the Indonesia Stock Exchange (IDX) for the five-year period 2017-2021, this study uses secondary data. Purposive sampling is used for sampling. The panel data regression analysis used in this study was processed using the Eviews 10 program system for data analysis. The results of this research test Return on Assets (ROA) and Debt to Equity Ratio (DER) have a positive and significant effect on Company Value (Tobin's Q), while Capital Expenditure to Book Value of Assets (CAPBVA) investment decisions have a negative and significant effect on Company Value (Tobin's Q) and Current Ratio (CR) have no effect on Company Value (Tobin's Q).

How Does Fertility Policy Relaxation Affect Household Financial Asset Allocation? Evidence from the Universal Two-Child Policy in China

Both fertility policy and the healthy development of financial markets are important topics for sustainable economic and social development. By using the difference-in-difference (DID) model, this paper investigates how the universal two-child policy (UTCP) in China aiming to improve fertility affects household financial asset allocation, based on the China Family Panel Studies (CFPS) data from 2010 to 2018. The results show that the implementation of UTCP has a significant negative impact on household risk asset holdings. Specifically, the policy decreases the probability of households participating in the financial market by 3.1 percentage points, reduces the total value of risk assets held by 50.2%, and lowers the proportion of risk asset investment by 1.76 percentage points. Mechanism analysis suggests that the implementation of the policy has a significantly negative impact on labor market outcomes for women, which decreases household income and increases the time and effort spent on caring for children. As a result, the financial resources available for household financial asset investment are diminished, and the time for activities such as information gathering and financial asset transactions is squeezed out, ultimately leading to a decrease in household risk asset investment. Heterogeneity analysis reveals that households with self-employed wives (higher income instability), households without a co-resident status with grandparents (more time spent on childcare), and high-income households (stronger willingness to have more children) are more affected by the policy. This study provides new supplements on how fertility policies affect the allocation of household financial assets and proposes constructive suggestions on how to establish a comprehensive system of childcare welfare and alleviate the economic pressure of family childcare in developing countries.

The effect of financial literacy on Gen-Z crypto investment decision through herding behavior as mediator

The progression of investment in Indonesia has witnessed rapid growth, particularly in the realm of crypto assets. By April 2023, the number of crypto investors in Indonesia had surged to 17 million, with the Gen Z cohort dominating this category of asset investors. The primary objective of this research is to examine whether herding behavior can mediate the relationship between financial literacy and crypto investment decisions among Gen Z individuals. This investigation was conducted among crypto investors residing in the city of Bengkulu. A total of 156 individuals were selected as the sample. The collected data was subsequently processed using the Smart PLS 3 application. The research findings indicate that financial literacy has a significantly positive influence on herding, and financial literacy also has a significantly positive impact on the crypto investment decisions of Gen Z. Moreover, herding serves as a mediating factor in the relationship between financial literacy and Gen Z's crypto investment decisions.

Study of the Impact of Housing Provident Fund on Urban Households’ Investment in Risky Financial Assets

Based on the 2019 CHFS data, this paper utilizes the Tobit model to consider the impact of housing provident fund on urban households' investment in risky financial assets and its mechanism of action. The results show that holding housing provident fund is increases the investment ratio of urban households for financial products and risky financial assets, and there are differences in household income levels and financial literacy. Further research found that housing provident fund significantly increases urban households’ future expectations and happiness, and thus increases the investment ratio of households in financial products and risky financial assets. The better the household’s financial situation, the higher the rate of investment in financial products and risky financial assets will be when the household owns housing provident fund.

An evaluative study of economic security from the perspective of land resource assets

Food availability, economical and social stability, ecological sustainability, and sustainable urban and rural growth are all aspects of China's land resource economic security (LRES). This study constructs indicators which utilize panel statistics of 31 Chinese provinces from 2004 to 2019 to properly evaluate the extent of China's LRES, considering quantitative, qualitative, structural, price, and efficiency security. Hence, it analyzes the factors that affect LRES using static panel data. The study finds that, first, the level of LRES in China has fluctuated widely, with an upward trend over the past three years. Second, it varies across regions, with the highest level occurring in the central regions. Third, an inverse "U" relationship is observed between the level of economic development and land resource security. The level of LRES is negatively impacted by population On the other hand, the level of human capital, the scale of fixed asset investment, the improvement in pollution control, and the rationalization of the manufacturing system all increase LRES.Hence, over time, the economic security of land is expected to improve.

Quantitative Easing’s Effects on the U.S. Housing Market

As the housing bubble burst in the United States, the buildup of subprime lending led to the Global Financial Crisis. The Federal Reserve desperately slashes interest rates to reverse the economic recession, but the Zero Lower Bound significantly hindered the policy's future effectiveness with concerns of an existing liquidity trap. As a result, the unprecedented Quantitative Easing became the policymakers' last resort. Through the large-scale purchases of financial assets including mortgage-backed securities (MBS) and government bonds, the Fed attempts to stimulate the economy through reserve creation and instilling downward pressure on future interest rates. This literature review discusses how QE specifically affected the U.S. housing market during the GFC. An analysis is conducted on various social aspects and stakeholders by identifying the various channels through which QE is transmitted. The signaling, bank lending, and refinancing channels all suggest that MBS had the greatest effect on market expectations, bank behaviors, and consumer spending. As a result, many were many spillover effects into real estate, notably on asset prices, employment, and investment. Even though literature has criticized QE's ineffectiveness and its potential drawbacks, the unconventional monetary policy certainly played an essential role in preventing a worse outcome and effectively demonstrating its ability to reduce interest rates, generate wealth, and revive the economy.

The Coupling Coordination and Influencing Factors of Urbanization and Ecological Resilience in the Yangtze River Delta Urban Agglomeration, China

Twenty-six cities in the Yangtze River Delta urban agglomeration were taken as the research object, and this study comprehensively evaluated urbanization quality and ecological resilience from 2005 to 2020. On this basis, the spatiotemporal evolution characteristics and main influencing factors of the coupling relationship between urbanization and ecological resilience were systematically explored using a coupling coordination model and panel Tobit regression model. The results can be summarized as follows: (1) from 2005 to 2020, the quality of urbanization in the Yangtze River Delta urban agglomeration continued to grow, the level of ecological resilience grew slowly and fluctuated, and the development among municipalities tended to be balanced. (2) The overall coupling coordination degree of urbanization and ecological resilience showed a continuous increasing trend, and the coupling coordination type changed from basic coupling coordination to good coupling coordination. The number of cities with lagging urbanization quality decreased significantly; spatially, the gap in the coupling coordination degree between municipalities narrowed, and the cities with good coupling gradually clustered. (3) The results of the panel Tobit regression showed that the differences in the spatial evolution of coupling coordination mainly resulted from the interaction of drivers such as real utilized foreign capital, per capita GDP, carbon emission intensity, the proportion of science and technology expenditure to fiscal expenditure, the ratio of per capita disposable income of urban and rural residents, fixed asset investment in municipal utility construction, and the index of ecological land area ratio. In the future, the coupling coordination degree of urbanization and ecological resilience should be improved based on the type of coupling coordination according to local conditions, and the seven influencing factors should be carefully examined to accelerate the high-quality integrated development of the Yangtze River Delta.

Fintech and Proptech Based Real Estate Assets Investment Platform

In an era marked by a digital innovation, the intersection of a financial technology (Fintech) and a property technology (a Proptech) has transformed the landscape of a real estate asset investment. This research paper delves into the dynamic realm of Fintech and a Proptech-driven investment platforms, guided by the influence of JavaScript technology.

Digitalization and firms' systematic risk in China

AbstractPrevious literature indicates that digitalization offers enterprises competitive advantages. However, However, its potential impact on risk management remains uncertain. Thus, this study explores the causality between digital transformation and systematic risk of Chinese public companies during 2007–2020. We developed a digital‐related keywords dictionary using textual analysis to identify investments in digital assets which serve as a measure of corporate digitalization. Our findings suggest a negative correlation between digital transformation and enterprise systematic risk. This relationship is further supported by robustness tests, adjustments for endogeneity, and random forest predictions. The risk‐reducing effect of digitalization is more pronounced in non‐state‐owned, small, high‐asset‐density, and low‐investor‐attention enterprises. Additionally, we explore potential mechanisms: the financial leverage channel, operating leverage channel, and investor loyalty channel. Empirical observations indicate that enterprise digitalization: (1) lowers financing costs, curbing an inclination towards excessive debt; (2) enhances operational cost management and stimulates sales growth; and (3) boosts long‐term investor holdings, decreases stock price synchronization, and mitigates crash risks. This study offers new insights into assessing the sustainability of digitalization and mitigating systematic risks of enterprises.

Non-State Shareholder Participation and Technological Innovation in State-Owned Enterprises

The Third Plenary Session of the 18th CPC Central Committee established mixed ownership system as the main policy of SOE reform, and as the main form of SOE "mixed reform", can non-state shareholders' participation promote the technological innovation of SOE? Based on the research samples of China's A-share state-owned listed companies from 2010 to 2017, this paper finds that the participation of non-state shareholders promotes the technological innovation of SOE, and this result is more robust when the participation of non-state shareholders exceeds 10%, i.e., when the participation of non-state major shareholders is more robust. The results of the mediation effect model show that non-state shareholders' equity participation plays a positive role in the level of state-owned technological innovation by improving the incentive channel for executive compensation, while the results of the mediation effect test of the financial assets investment channel are not verified. This paper provides theoretical and empirical support for the rationality and effectiveness of mixed ownership reform from the dimension of technological innovation.

The Impact of Intangible Capital on Firm Profitability in the Technology and Healthcare Sectors

The aim of the present study is to assess the impact of structural capital intensity and utilization on firm profitability in an international setting: the European Union countries, plus Norway, Switzerland and the United Kingdom. The indicators are calculated based on financial data downloaded from the Refinitiv Eikon database. Two financial ratios are used as proxies for the intensity and utilization of structural capital. The balanced panel consists of 625 companies from 25 countries, over the period from 2013 to 2022. The panel includes financial information on two industries that are considered innovation-oriented, namely technology and healthcare. Alternative model specifications are proposed to test the robustness of the basic model, including dynamic models (with lagged dependent variables). The present study indicates that a higher proportion of structural capital (intangible assets, excluding goodwill) is a negative factor for company profitability in the technology and healthcare sectors. There is no indication that a more intense use of intangible assets and more investments in R&D positively contribute to company profitability in the respective industries, for a large sample of listed companies. A higher proportion of intangible assets, as reported in financial statements, is possibly related to inefficiencies in the management of structural capital. The inverse relationship between profitability and investments in intangible assets is likely due to failures in cost accounting. Limitations and future research propositions are provided in the conclusions.

Green Firms, Environmental Hazards, and Investment

In this work, we analyze the relation between environmental risks and firms’ investments, and whether this relationship is different for green firms. We merge balance sheet and patenting activity data on Italian firms in manufacturing sectors during the period 2010–2019 with information on environmental risk at the municipality level. We show that investments in capital assets are smaller on average for firms operating in municipalities with higher levels of environmental risk, particularly when the risk is hydrogeological or seismic in nature. This negative impact is significantly lower if firms operate in green sectors. This finding was reinforced after the ratification of the Paris Agreement and the consequent increased awareness of firms, investors, and policymakers about the importance of environmental risks and the ongoing ecological transition process.

Cryptocurrency: A Currency or Investment Asset?

As most countries use currencies to denote paper money created as a medium of exchange for buying and selling goods or services. Nevertheless, there are attempts from several entities to create a crypto asset named cryptocurrencies which aims to replace the functions of paper money. The issue arises whether cryptocurrency is valid to be used as a currency or investment asset according to Shariah’s perspective. This article aims to clarify the Shariah views on the legality of cryptocurrency, analyze the suitability of cryptocurrencies as a currency or investment assets, and finally, suggest that cryptocurrency is one of the investment assets or commodities in line with the requirements of Shariah. The research adopts pure legal research methodology utilizing content analysis on the primary and secondary sources. The research findings revealed that Islamic scholars have conflicting views regarding the legality of cryptocurrency as a means of exchange to replace the function of paper money and as an investment asset. Nevertheless, cryptocurrency and crypto assets are required today because of Maqasid Shariah, maslahah, and qawaid fiqhiyyah. Future research should focus on the usage and practice of cryptocurrency worldwide and its legal application in specific countries.
 Keywords: cryptocurrency, currency, investment

Performance of Chinas Macroeconomic Indicators in a Regression Model-Based Sales Forecasting

The impact of macroeconomic indicators on sales forecasts is a topic worthy of corporate consideration in China. However, previous research on this topic is rarely based on the Chinese context and lacks discussion of specific industry scenarios. In this study, 5 macroeconomic indicators that the Chinese government and people are concerned about are selected and put into the regression model and the AIC model selection criterion to study their performance in sales forecasts of 4 industries in China. It is concluded that under Chinas national conditions, Disposable Income per Capita and National Fixed Asset Investment are two macroeconomic indicators that deserve attention and perform better than other indicators in sales forecasts, and they have hardly been mentioned in previous studies. At the same time, the most appropriate model for sales forecasting in each industry contains different combinations of macroeconomic indicators. It is believed that this result is valuable for companies in various industries, and will be inspiring for subsequent research in the field of sales forecasts.

TRASFORMATION OF UKRAINE'S FINANCIAL ASSETS AMID THE DEVELOPMENT OF THE INTERNATIONAL FINANCIAL SYSTEM

The work has analysed the state of financial assets and their dynamics in the international financial system, considering the global changes in the financial architecture and financial relationships observed over the last decade. It has been observed that in 2020, global financial assets exceeded world GDP more than 18 times and consisted of three main equivalent components: assets of the real sector of the economy, assets of the financial sector, and assets of the financial sphere. The study has revealed that investment in intangible assets has slowed over the past two decades while investment in real assets, particularly in real estate, has become more active. Regularities in the relationship between the decrease in interest rates, the growth rate of GDP, and the directions of investment of funds in the leading countries of the world have been followed. This provides a basis for conclusions regarding further changes in the structure of global financial assets. The article has also raised issues of feasibility and riskiness of further increasing the amount of debt capital on a global scale in the context of some revision of its impact on the world economy after the 2008 crisis. Integration processes in Ukraine prompt the analysis of trends in the formation of financial assets in our country, with indicators similar to those of developed countries and global indicators in general. A comparison of global trends and indicators of the development of Ukraine's financial assets has highlighted significant differences both in percentages of GDP and in their structure; in particular, attention has been paid to the uneven development of various sectors of the financial market of Ukraine — the significant development of the banking sector along with the laggards of the stock market. This indicates an important gap in the development of the Ukrainian financial sector and the need to reform it to integrate into the global economic space.

Cheating in the evaluation. An expedient to estimate the impact of intangibles on the enterprise value of the high-growth start-ups

This study investigates the effect of investments in intangible fixed assets and human capital on the Enterprise Value (EV) of Italian high-growth startups (HGSs). To test our hypotheses, we conducted several Ordinary Least Squares (OLS) regression analyses on a dataset comprising 782 HGSs. The EV was esti-mates using the Discounted Cash Flow (DCF) method. Our findings reveal a posi-tive and statistically significant relationship between investments in intangible as-sets and EV. However, investments in human capital and highly skilled workers show a negatively relationship with EV. Lastly, a positive and statistically signifi-cant relationship between value-added per employees and the EV of HGSs has been identified. This study offers valuable insight into the process through which new firms gener-ate value. By strategically investing in intangible assets and human capital, startups not only enhance their probability of survival but also improve their growth potential. This allows these companies to overcome the challenges of the early stage and embark on a sustainable growth process. To spotlight the unique value drivers of these companies, unlike prior studies, we manually estimate the EV. We have employed the DCF method by playing the cards face up: we used the actual cash flows realized by the HGSs during the study period instead of rely-ing on forecasts. We have therefore "cheated" to measure the value created by the HGSs. This research can be considered a pioneering study that significantly con-tributes to the ongoing debate on the value creation process in fast growing startups.

Distributed Energy Resource and Energy Storage Investment for Enhancing Flexibility Under a TSO-DSO Coordination Framework

This paper presents a distributed energy resource and energy storage investment method under a coordination framework between transmission system operators (TSOs) and distribution system operators (DSOs), which simultaneously addresses two main aspects of the flexibility aggregation of DSOs, i.e., flexibility enhancement and dynamic flexibility provision. First, to characterize the key flexibility features of power distribution networks, a multi-port multi-period feasible region formulation is designed using the robust optimization conception while avoiding over-parameterized formulations that require extensive information exchange. Second, a two-stage robust planning model is built to enhance distribution system flexibility by maximizing the volume of feasible regions, in which the uncertainty of dispatch instructions is modeled as a decision-dependent uncertainty (DDU) set and the worst realization is identified for the operational security evaluation. The proposed two-stage robust planning model is solved via a customized column-and-constraint generation algorithm. Finally, a distributed framework for TSO-DSO coordination is proposed to enable the dynamic adjustment of feasible region provision of DSO, given the TSO’s preference, which is then solved by a DDU-based two-stage robust extension of the alternating direction method of multipliers algorithm. Numerical results verify the effectiveness of our proposed models and the scalability of the associated algorithm. <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Note to Practitioners</i> —The increasing integration of renewable energy resources has stimulated the need for aggregated flexibility provided by power distribution networks (PDNs). However, there are three challenges: i) using the currently feasible region formulation of PDN requires extensive information exchange with the transmission system operator (TSO), thus not compatible with the current structure. ii) the optimal investment of various assets to leverage their cost-effectiveness in feasible region enhancement needs to be addressed. iii) lack of a proper coordination mechanism between TSO and distribution system operators (DSOs) to facilitate the optimal feasible region provision and leverage the spatiotemporal flexibility. To address the above challenges, we design an easy-to-implement feasible region formulation to characterize the key flexibility features of PDNs. Upon this, we propose a feasible region enhancement planning method based on an extended two-stage robust model to address the decision-dependent uncertainty. Furthermore, we facilitate the optimal feasible region provision through the TSO-DSO coordination process in a distributed manner. The numerical results show that the proposed planning method and coordination mechanism could effectively achieve optimal flexibility enhancement and dynamic flexibility provision. In practical application, our proposed planning method can be readily implemented with advanced analytical tools. The coordination mechanism is also compatible with the current TSO-DSO structure and can be easily integrated into it.

Portfolio Optimization Strategy Based on Risk Diffusion Model in Emerging Industry Development

Abstract In this paper, we first sort out the formula of the premium principle and the algorithm of the diffusion model and then study the strategy problem about optimal investment consumption and insurance purchase when investors invest in new developing industries under the risk diffusion model. In real financial markets, there are two types of uncertainty regarding asset prices: normal fluctuations and abnormal shocks. The risk diffusion model is used to plan the optimal investment strategy based on this basis. In the end, three tests are executed, including two numerical simulations and one investment analysis that determines the investor’s age. The computational results show that the optimal strategy in the first set of simulations is the 56% increase in investment volume A(x) at the parameter σ = 0.1. The standard deviation of the investor’s objective in the second set of simulations is 9.287%, and the investor’s assets invested in risky securities should be 1.071. In the third set of tests, as the investor’s age increases, the value of the investor’s investment in risky assets continues to decline from 2.0 after 30 years, and by the time it reaches 40 years, it is already close to 0.25, and there is a continued decline, converging to 0. Investors can invest in providing effective reference data by investing in the portfolio optimization strategy in this paper, which predicts stock market volatility and vibration.