Investment Decisions Of Enterprises Research Articles

Does environmental regulation promote enterprise environmental protection investments? A quasi-natural experiment from river chief system in the Yangtze river delta of China

The investment decisions of enterprises are affected by environmental regulations designed to protect the environment, so environmental regulations may change companies' investment behavior in environmental protection. This study focuses on the River Chief System (RCS)1, an innovative environmental regulation related to river governance which officially launched in China in 2014. Based on data collected from heavy-polluting companies in the Yangtze River Delta, we use the difference-in-differences model (DID Model)2 and focus on RCS's impacts on micro-environmental protection investments. Our findings reveal that the RCS is conducive to expanding the scale of enterprises' environmental protection investments. Industrial structural upgrades appear to have a masking effect wherein the one-sided pursuit of industrial structural upgrades may slow economic growth and cause enterprises to reduce the scale of environmental investments. We recommend that the allocation of environmental investment should be based on the characteristics of local markets and public participation, and maintain a balance between secondary and tertiary industries, government and business incentives.

Does it matter who owns firms? Evidence on the impact of supermajority control on private firms in Europe

We explore how the type of owner affects private enterprise investment decisions in Europe. In contrast to the literature, we analyze firms with concentrated (>95%) ownership stakes to reduce the potential that agency problems contaminate our results. We consider four types of supermajority owners – family, institutional, corporate, and state and use detailed ownership and financial information from a large sample of private firms from 24 European countries from 2001 to 2018. We find that family-owned firms exhibit higher gross investment rates and substantially higher sensitivity to investment opportunities, profitability, cash flow, and value-added growth compared to corporate and institutional owners. At the same time, and more consistent with the literature, family-owned firms invest significantly less in intangible assets than other ownership types. To demonstrate the robustness of our results, we employ matching samples complemented by analysis of owner-type transitions from family owners to corporate and institutional owners.

Strategic-oriented multiteam system cohesion and enterprise investment decision: Evidence from CESIM platform online simulation experiment

Using CESIM platform financial data on the quality of enterprise investment decision, we assess the impact of strategic-oriented multiteam system cohesion (SOMTS cohesion) on the quality of enterprise investment decision. Based on the resource allocation theory, we found that only SOMTS social cohesion is positively associated with enterprise investment decision, but this impact decreased over the period. Further, team task cohesion moderates the effect in that the positive relationship between SOMTS task cohesion and enterprise investment decision is stronger when team task cohesion is low. The negative relationship between SOMTS task cohesion and enterprise investment decision is stronger when high team task cohesion. The study findings expand the application of multiteam systems theory, offering valuable guidance for executives and boards to enhance decision-making effectiveness from an interdependence perspective.

Research on Enterprise Investment Decision Based on Linear Quadratic Jump Uncertainty Stochastic Differential Game

Research on Enterprise Investment Decision Based on Linear Quadratic Jump Uncertainty Stochastic Differential Game

Analysis of the Situation of Corporate Financial Behaviors in the Context of Digital Economy - Based on Chinese Non-financial A-share Listed Companies

The digital economy is rapidly advancing, penetrating enterprises and influencing their behavior. To investigate how digital finance affects the financial investment decisions of enterprises, based on the panel data of Chinese A-share listed companies between 2011 and 2020, this paper uses a robust two-way fixed-effects econometric model to explore the impact of digital finance on corporate financialization and the heterogeneity of the impact within corporates of different natures and sizes. The findings reveal that digital finance significantly inhibits corporate financialization, with a more pronounced effect observed in nationalized and large-scale enterprises. Therefore, it is imperative for the government to enhance supervision and management of enterprises, as well as encourage and guide them to strengthen their digital finance capabilities to fully harness its potential.

Fisher's Separation Theorem and its Limitations

When businesses make investment decisions, they often evaluate the Net Present Value (NPV) of investment projects. For investors, a project is deemed worthwhile if its NPV is greater than zero. This phenomenon can be attributed to the Fisher Separation Theorem, which asserts that in perfectly efficient capital markets without transaction costs, a single interest rate prevails. In this context, investors' production choices adhere strictly to objective market regulations aimed at maximizing attainable wealth, entirely detached from individual subjective preferences. This, in turn, enables both borrowers and lenders to base their consumption and investment decisions on the prevailing market interest rate, thereby encouraging a clear distinction between investment and financing choices. Therefore, a company's investment decisions can be discussed separately from its financing decisions. So, the enterprise's investment decision and financing decision can be discussed separately. When enterprises invest, enterprises do not have to consider the subjective consumption preferences of different investors, because investors' consumption preferences can be satisfied accordingly through perfect capital market operation. Because of Fisher's Separation Theorem, which requires the market to be transaction cost-free, it also has some limitations.

China-ASEAN Location Investment Decisions-Analysis from Enterprise Level

Since the 21st century, with China's reform and opening up, China has welcomed the rapid development and growth brought by the opening up of its economy, and China's investment strategy has slowly shifted to the international market. The trade and foreign direct investment between China and ASEAN have also received much attention in academia, with rich academic achievements in recent years. However, few studies have studied the impact factors and investment performance of enterprise heterogeneity on the location selection of direct foreign investment of Chinese enterprises from the perspective of micro-level enterprise data, with even fewer academic research focused on China-ASEAN studies. 
 
 Based on the above background, this paper will focus on the discussion and analysis of enterprise location investment decisions by taking enterprise heterogeneity factors and host country factors as cross-factors. First of all, this paper analyzes the various characteristics using the published data of China's investment in ASEAN from 2004 to 2013. In the empirical regression part of the paper, it combines the enterprise heterogeneity factors and the host country location factors into the Logit model to explore how the host country factors affect the investment decisions of enterprises in ASEAN. Therefore, this paper tests the grouping regression and corporate regulatory effect of the ten ASEAN countries, and finds that the corporate factor and the host country factor offset each other to a certain extent. This paper further expands the feasibility of the research on ASEAN location investment based on the theory of enterprise heterogeneity, and also provides a supplementary perspective for the relationship between enterprise heterogeneity and location selection strategy.

How does home and host-country policy uncertainty affect outward FDI? Firm-level evidence from China.

How the foreign direct investment behavior of enterprises changes in response to the risks and instability of government economic policy changes is a relevant issue which, however, has not been extensively studied yet. Accordingly, this paper establishes a linear probability regression model to study the foreign direct investment behavior of Chinese A-share listed companies in 13 countries between 2003 and 2020 and explores whether multinational companies change their OFDI decisions when the economic policy environment of China and trade-related countries are unstable. A firm heterogeneity analysis and phased discussions were conducted, and a robust conclusion was finally drawn. The results show that (1) China's economic policy uncertainty promotes China's foreign direct investment, while the host country's monetary policy uncertainty inhibits China's foreign direct investment. (2) The foreign direct investment decisions of enterprises are affected not only by the macroeconomic and policy environment of the two trading countries but also by their development characteristics. (3) Sino-US trade frictions and the financial crisis have different effects on China's foreign direct investment.

Economic Policy Uncertainty, Managerial Ability, and the Peer Effect of Corporate Investment

How the macro-external environment, i.e., the uncertainty of economic policies, affects the peer effect of corporate investment and whether the ability of managers, as the main decision of corporate investment, affects the peer effect of enterprise investment is worthy of further study. This paper uses Baker’s economic policy uncertainty index to obtain China’s economic policy uncertainty index and uses the DEA-Tobit two-stage model to measure the ability of managers, combined with the relevant data of China’s A-share listed companies from 2010 to 2020, to study the impact of economic policy uncertainty and managers’ ability on corporate investment peer effect. We found that China’s economic policy uncertainty increases the information acquisition cost of micro-firms and deepens the degree of information asymmetry, and firms are strongly motivated to learn or even imitate the investment decisions of enterprises in the same industry, thus intensifying the peer effect of investment. For enterprises of different nature, the economic policy uncertainty has a more significant impact on the investment peer effect of non-state-owned enterprises than state-owned enterprises. Compared with large enterprises, the impact of economic policy uncertainty on the investment cohort effect of small enterprises is more significant. Then, through group regression according to the median of managerial ability, we found that the investment peer effect is more obvious in enterprises with low management ability and the effect of economic policy uncertainty on investment peer effect is more significant in the sample with low management ability. Based on the empirical research conclusions, this paper puts forward the following suggestions: improve the corporate governance mechanism and the management ability of managers. In issuing economic policies, the government should be cautious and stable to reduce the uncertainty of economic policies.

Economic policy uncertainty and enterprise investment decision: Evidence from China

We empirically examine the impact of economic policy uncertainty (EPU) on the investment decision of China's high-tech manufacturing industry based on the company's investment structure. There are several findings. First, innovation investment and maintenance investment are mutually exclusive. However, enterprise prefers innovation investment when facing higher EPU. Second, excess return, asset irreversibility and external market demand are three important mechanisms of the impact of EPU on the corporate investment decision. Finally, higher financing constraints weaken the impact of EPU on investment decision. Firms with higher capital intensity tend to reduce both innovation investment and maintenance investment when EPU rises. The research shows that when the EPU increases, enterprises in China's high-tech manufacturing industry are more inclined to choose innovation investment.

Integrated Evaluation of Corporate Investment Decision Performance Based on Fuzzy Sets and BP Neural Networks

Enterprise investment decision performance evaluation is a complex system, which is affected by many factors. Based on the consideration of corporate strategy and stakeholders, a six-level index system is designed to evaluate the performance of corporate investment decision-making. The index-selection method combining benchmarking management and principal component analysis is established, and the enterprise management index analysis method based on neural network and fuzzy decision-making is designed. The multiattribute decision-making problem in enterprise performance evaluation is solved by using the triangular fuzzy-weighted Einstein-Bonferroni mean (TF-WEBM). The algorithm is suitable for multiattribute decision-making in a triangular fuzzy environment. Finally, the effectiveness of this method is verified by an enterprise performance evaluation example.

Research on the investment decisions of PV micro‐grid enterprises under carbon trading mechanisms

AbstractAchieving carbon neutrality targets requires substantial financial support. Effective utilization of renewable energy is an essential means of promoting energy‐saving and emission reduction to realize a green and circular economy. This paper combines carbon trading mechanisms with the operational mode of Chinese micro‐grid enterprises. This method uses the real options theory to construct an investment decision model for photovoltaic (PV) micro‐grid enterprises. The study aims to analyze the impact of carbon trading revenue on a numerical simulation of PV micro‐grid enterprise investment decisions. The findings demonstrate that when projected growth rates, volatility standard deviations, and risk‐free interest rates rise in the carbon trading market, the carbon price threshold rises, causing businesses to seek out investment opportunities with higher future carbon prices. The increase of micro‐grid generation technology acceptance probability, the availability of resources to meet generation investment requirements, and the generation project cycle will decrease the carbon price threshold and accelerate enterprise investment. Studying the influence of carbon trading prices on micro‐grid investment has specific guidance and practical significance for future government subsidy policies and the investment strategies of grid enterprises.

Debt maturity structure and investment decisions: Evidence of listed companies on Vietnam’s stock market

The article analyzes the impact of debt maturity structure and other factors on investment decisions of enterprises listed on the Vietnam’s stock market from 2010 to 2019. Data used in this study are acquired from the financial statements of 558 enterprises listed on both the Ho Chi Minh and Hanoi stock exchanges in the period 2010–2019, from the FiinPro database. S-GMM regression method is utilised to analyze the influence of debt maturity structure and other factors on investment decisions of listed companies. The analysis results shows that the debt maturity structure has a positive impact on the investment decision of the enterprises. Besides, the profitability of total assets and the fixed assets turnover also have a positive impact on the investment decision of the enterprise, while liquidity and cash flow have a negative impact on investment decisions. Based on empirical results, the study proposes some recommendations to help the managers of listed companies to build a reasonable debt maturity structure in the direction of using more long-term debts to increase investment efficiency. At the same time, the study recommends some policy implications for the Government in managing macroeconomic policies in order to create favourable conditions for businesses to access many long-term capital sources.

Research on Macro-economic Decision Model Based on Big Data Analysis

Macroeconomic forecasting is guided by rational expectation, which emphasizes various historical information used. It is similar to using historical data to predict macroeconomic development trends. When making investment decisions, enterprises generally need to consider the cost of investment. The economic downturn seems to have entered a bottomless pit. The main reason is that although the government has stabilized the economic growth through large-scale stimulus policies, it also hinders the process of economic natural adjustment, leading to the artificially prolonged market economic cycle. Therefore, in order to effectively deal with this complex situation, we must rely on a more mature theory and method system to systematically analyze the transmission mechanism that affects enterprise investment decisions. This paper will analyze the macro-economy based on big data. The development strategy of big data has become a hot issue for enterprises around the world. Many enterprises integrate big data strategy with their own decisionmaking management system, and make more scientific decisions through comprehensive collection, screening and analysis of all kinds of data.

Instruments of state stimulation of investments in the conditions of Industry 4.0 development

The article describes the methods of state stimulation of investments in the development of R&D and innovation. Based on the research of experts from the Big Four and reports of international organizations, an overview of current trends in the application of methods and measures of state support for investment in R & D and innovation in various countries, including those with a similar economic structure to Kazakhstan, is made. At the heart of modern innovative trends, the development of elements of Industry 4.0 and the digital transformation of industrial enterprises are of great importance for economic growth. In the context of a pandemic, there are crisis changes in the economy, in the behavior of business entities and people’s consciousness, which provide for a proactive role of the state in ensuring stability and forming a sustainable development trend in the post-pandemic period. Crises, as a rule, in addition to destructive consequences, create the need and opportunities for the introduction of innovations and the transition to a qualitatively new technological level of development. One of the main factors of successful investment decisions of enterprises at the present stage is the speed of application of new digital technologies, which are more effective in comparison with investments in the creation of new production capacities. In the conditions of uncertainty of return on investment, the author suggests using the fiscal measures adopted in international practice to stimulate investment in R & D, including for the development of Industry 4.0 in the basic industries of Kazakhstan. The considered structure of investment incentives can be used to increase the scale of investments by large private and national corporations in the MMC and NGS sector, which positively affects the financial flows of enterprises and state budget revenues in the medium term. The author’s conclusions may be of interest to state authorized bodies and company managers when financing digitalization projects of industrial enterprises.

Should Firms Keep a Balance between State and Foreign Ownership? A Perspective on Financial Constraints and Investments in Vietnam

State and foreign ownership are increasing their role in financial management and performance of Vietnamese enterprises in the context of global and regional economic integration. Meanwhile, financial constraints and investments are two essential elements affecting corporate financial success. This study investigates the influences of governmental and foreign ownership on financial constraints and investment decisions of enterprises in Vietnam. Using regression models for panel data of 657 non-financial firms listed in Vietnam stock market, the study reveals that Vietnam listed firms with higher rates of state-owned shares exhibit higher levels of financial constraints. State ownership also restricts firms’ investments. On the other hand, foreign ownership helps to reduce the investment – cash flow sensitivity and enhances the firms’ investment levels. As a result, the study recommends that Vietnamese firms should try to eliminate the role and percentage of state ownership as well as attract more foreign investors to enhance the financial barrier and increase more promising investment opportunities to boost the firms’ financial outcomes.

Real Option, Debt Agency Conflicts and Corporate Investment Decisions

This paper studies enterprise investment decisions under debt agency conflicts by the method of real option. It is different from the existed literatures that this paper considers not only the influence of investment goals alienation on investment decisions without bankruptcy agency, but also analyzes the investment decisions distortion under bankruptcy agency conflicts. The study result shows that enterprises with debt usually exist overinvestment; on the one hand, the overinvestment comes from excessive pursuing of the tax benefits under the investment goals alienation, on the other hand, it comes from the protection for shareholders’ investment risk under strategic default bankruptcy. What’s more, under the lower debt level, the former is the dominant mechanism for investment decisions distortion; while under the higher debt level, the influence of the later is prominent.

Simulating the impact of investment preference on low-carbon transition in power sector

With the deepening marketization of the electric power industry in China, its low-carbon transition relies increasingly on enterprise investment decisions. These decisions can be influenced by the risk preferences and technical preferences of the enterprises, thus deviating traditional estimation with respect to both economic optimization and uncertainty. To evaluate the impacts of investment preferences on the development path of the power sector, we developed an agent-based model combined with Monte Carlo simulation to quantitatively capture the risk preferences and adaptive technical preferences of power enterprises in their decision-making process. Two scenarios were established with and without risk preferences and adaptive technical preferences, respectively. The results indicate that both the risk aversion and the adaptive technical preference of power generation enterprises play significant roles in promoting the low-carbon transition of the power sector and that they exhibit a synergistic effect. In addition, the risk aversion of power generation enterprises increases the stability of transition in the power sector. However, these two preferences lead to income loss and additional subsidy burden in the power sector. The preferences of power generation enterprises should be recognized and considered in the design and evaluation of low-carbon policies in China’s power sector.

Factors Affects Investment Decisions of Enterprises into Vietnam's Economic Zones

Vietnam has 16 coastal economic zones (EZs) in operation. These economic zones have attracted more than 300 FDI projects with a total investment of over US $ 39 billion and 840 domestic investment projects with a total investment of nearly 566 trillion dong. However, the development of Vietnam's economic zones has not had the breakthrough as set out. Therefore, it is necessary to seek solutions to attract investment for the development of EZs. This paper uses a probit regression model to quantify the factors affecting the investment decision of the enterprise in the economic zone. The results of the study have described the characteristics of target customers who have a higher probability of investing in EZs than those of other firms. The results also show the factors that influence the initial decision. Private firms in order are (i) Competitive input costs; (Ii) Incentives (iii) local institutions; (Iv) Geographic location. Infrastructure and human resources inside and outside the EZ are not different enough so there is no basis for concluding the impact on the investment decision. Factors that have the opposite effect are communication and habitat. Based on the results of this study, the author proposes measures to attract enterprises to invest in EZ

Cigarette Sales Prediction in China Based on Markov Model

Based on the analysis of the cigarette sales in past years, this paper introduced an effective and relatively precise method to predict the cigarette sales in China. The latest cigarette data published by government was collected to apply Markov Model. A novel way of processing sales data by sales ratio was adopted in classifying the states. In the prediction table constructed by the transition probability matrix, weighted average method was utilized to quantitatively and accurately simulate the sales prediction. Finally, the relative error between predicted and real national cigarette sales for 2012 to 2015 are -0.56%, -0.84%, 3.11% and 4.39% respectively. The research results offer the reference directly to enterprise investment decision and the industry development strategy.