Investment Decisions Research Articles

Effect of Firm Attributes on Financial Reporting Timeliness of Quoted Oil and Gas Companies in Nigeria

Published information may lose its relevance if there is undue delay in it being reported. However, around the world, delay in the auditing of financial statements have been identified as leading to an overall delay in their publication. The study investigates the effect of firm attributes on financial reporting timeliness of the eleven (11) listed oil and gas firms on the Nigerian Stock Exchange for the period 2011 to 2020. Sample of eight (8) companies were selected using purposive sampling technique after applying a single filter. The study used Ex-post facto research design. The variables considered were firm age, firm size, leverage and profitability. Financial Reporting timeliness was measured using audit report lag. Panel data were collected from the annual reports and accounts of the selected firms. The multiple regression analysis technique was used to analyse the data. The result of the study indicates that firm age, firm size and profitability significantly affect financial reporting timeliness while leverage does not influence financial reporting timeliness. Therefore, the study concludes that firm attributes especially firm age and profitability are good predictors of financial reporting timeliness. The study recommends that firms should grow their assets, strive to make profit and incur less debt as these factors are very important for investment and other decision purposes by the users of the information.

Theoretical Frameworks for Integrating Sustainability Factors into Institutional Investment Decision-Making

This paper explores key theoretical frameworks instrumental in understanding the relationship between sustainability and institutional investment decisions. The study identifies and analyzes various theories, including Behavioral Finance Theory, Modern Portfolio Theory, Risk Management Theory, and others, to explain how sustainability considerations increasingly influence investment choices. By examining these frameworks, the paper highlights how investors integrate Environmental, Social, and Governance (ESG) factors to optimize financial outcomes and align with broader societal goals.

Impact of Select Variables on Tangible Book Value Multiple of U.S. Regional Banks

Aims: This study explores the relationship between regional banks' Price-to-Tangible Book Value (P/TBV) multiple and metrics such as profitability, liquidity, capital adequacy, asset quality, leverage, and operational efficiency. Study Design: A longitudinal panel data analysis of 101 regional U.S. banks, covering the financial years from 2003 to 2023. It employs fixed effects, random effects, and pooled OLS regression models to determine the drivers of P/TBV multiple. The analysis controls for time-specific factors such as pre – and post – financial crisis periods, enabling a more comprehensive evaluation of valuation trends over different economic cycles. Results: All three models were statistically significant in identifying the determinants of P/TBV. However, the fixed effects model was deemed the most appropriate, as confirmed by the Hausman test (p < 0.001), which demonstrated its consistency over the random effects model. Additionally, the F-test (p < 0.001) indicated the relevance of the fixed effects model over the pooled OLS model by highlighting the significance of individual effects. The fixed effects model and the fixed effects model with robust standard errors revealed that return on equity and bank efficiency positively influenced P/TBV, while asset size, non-performing loans, leverage, and dividend yield had significant negative effect. The model also showed higher valuations for regional banks in the pre-2008 financial crisis period compared to the post-crisis era. Additionally, upon accounting for the impact of heteroscedasticity, the statistical significance of loan-to-deposit ratio variable noted in the fixed effects model turns out to be insignificant. Conclusion: Financial stability, profitability, capital, and asset quality are crucial in determining regional bank valuations. The insights from this study will help bank managers identify key focus areas to optimize valuation and pricing strategies, ensuring that banks can align internal financial health with broader market dynamics for sustainable growth. Additionally, the findings will benefit investors by providing a deeper understanding of the financial factors driving bank valuations, enabling more informed investment decisions. While this research does not directly address the impact of macroeconomic variables on regional banks' valuations, it highlights an area that merits further investigation in future research.

Testing the Goodwin Model: Can Distribution Battles Trigger Business Cycles? Evidence from a Behavioral Experiment

AbstractThe Goodwin model provides an important explanation for business cycles with its investment decisions based on pro-cyclical wage fluctuations. The purpose of this paper is to test the central hypothesis of the Goodwin model, namely that wage developments influence investments, which creates business cycles. The model used to test this hypothesis was that of a simplified company, where labor demand is related to investments. Thus, more investments lead to higher wages and vice versa. In the behavioral experiment the test subjects played the manager of a company who maximizes their profits through investments. The central assumptions and conclusions of the Goodwin model are supported by behavioral science.

Investment Pattern and Behaviour of Rural Households on Investment Avenues with Special Reference to Ernakulam District

Two-thirds (67.63% of the total population) of the people in rural India live there and contribute one-third of the country's GDP1. One of the most significant areas that increases gross domestic savings is the household sector. The main objective of the study is to understand rural household savings and investment behaviour that is influenced by a number of factors including years of age, schooling, financial status, and occupation. According to the study, the majority of respondents have lower earning potential, and even those who did earn more only set aside a little fraction of their income for savings. In India, there are numerous investment opportunities and there are advantages and disadvantages to any investment strategy. Making the best investment decisions will meet the various demands of different people requires having a thorough understanding of these investing options. This paper projects various investment options and the level of household awareness in rural areas areas. The study utilized a meticulously designed questionnaire to explore the investment preferences and awareness levels of rural investors. The primary aim was to gain insights into their preferred investment avenues and their level of understanding regarding various investment options. For data analysis, simple percentages were employed to summarize the findings, and the chi-square test was used to assess relationships between categorical variables. 300 rural households selected as sample size from Ernakulam District through convenience sampling method.

Does the green finance policy affect the efficiency of corporate investment? Evidence from China's green finance reform and innovation pilot zones.

In the context of promoting the orderly expansion of capital investment and rational allocation of resources to achieve green and circular economic development. Green finance, as a new engine to promote the sustainability of enterprises, holds significant importance in exploring the positive effect of green finance policies on optimizing the investment decisions of enterprises and guiding them to efficiently utilize their resources to maximize value creation. Using A-share listed companies in Shanghai and Shenzhen from 2012 to 2022 as the research sample, we apply the Difference-in-Differences (DID) method to test the impact of the green finance reform and innovation pilot zones (2017) on the investment efficiency of enterprises in the pilot regions. We also adopt a two-step method to test the mechanisms of financial resource misallocation and agency costs. The study reveals that the green finance policy significantly enhances the investment efficiency of enterprises in the pilot areas. Financial resource misallocation and agency costs are important influence mechanisms. Drawing on resource allocation theory and agency theory, the study concludes that the green finance policy alleviates financial resource misallocation by directing financial resources toward high-efficiency enterprises. Moreover, the policy effectively reduces agency conflicts caused by power separation and information asymmetry, ensuring that enterprises can maximize the benefits of their investments. Heterogeneity analysis shows that non-state-owned enterprises and low-tech innovative enterprises in the pilot areas have disadvantages in terms of capital stock and loan credit, so the policy can improve their investment efficiency effectively. Based on these findings, we recommend that to leverage the positive effects of the green finance policy, it is essential to enhance the guiding role of the government, strengthen market mechanisms, and bolster corporate initiatives. This study complements the research on the economic effects of location-orientated comprehensive green finance policies on enterprises, considering the dual aspects of resource allocation efficiency and corporate governance, and makes up for the shortcomings of the existing literature. The study's conclusions offer valuable insights for enhancing green finance to support enterprises in achieving efficient production.

ESG risk analysis and preparedness of companies in the Czech Republic

This study examines the integration of Environmental, Social, and Governance (ESG) principles into the strategies of companies in the Czech Republic, a region where ESG considerations are increasingly influencing investment decisions and corporate governance. As global sustainability concerns gain momentum, Czech companies face growing scrutiny from investors, regulators, and stakeholders. This research aims to assess the current state of ESG risk analysis and evaluate the readiness of these companies to address the challenges posed by environmental stewardship, social responsibility, and governance effectiveness. To achieve this, the study employs a mixed-methods approach, combining qualitative data from semi-structured interviews with industry experts, corporate leaders, and regulatory authorities, and quantitative data from a survey distributed to a representative sample of companies across various sectors in the Czech Republic. The qualitative interviews provide in-depth insights into the challenges and strategies surrounding ESG integration, while the quantitative survey assesses the extent of ESG adoption, identifies key risk areas, and evaluates companies’ preparedness to tackle these issues. Data analysis includes thematic analysis of interview transcripts and statistical analysis of survey responses, offering a comprehensive view of ESG practices in the Czech business landscape. The findings reveal both best practices and areas needing improvement, providing valuable insights for stakeholders committed to enhancing corporate sustainability. This study contributes to the broader discourse on ESG by highlighting the evolving role of these factors in shaping corporate resilience, innovation, and long-term value creation in the Czech Republic, ultimately promoting a more sustainable and responsible business environment.

Corporate risk-taking, financial constraints and cash holdings: evidence from Saudi Arabia

Purpose This study aims to investigate the association between corporate risk-taking and cash holdings, and whether financial constraints moderate this association. Design/methodology/approach Regression analyses were applied to 606 firm-year observations from Saudi Arabia from 2011 to 2020. Findings Firms with higher risk-taking exhibit higher cash holdings, whereas financially constrained firms have lower cash holdings. The positive association between corporate risk-taking and cash holdings is weaker for financially constrained firms than for nonconstrained firms. Practical implications For investors, investment decisions that include the cash holding assessment would also consider the firm-level uncertainty surrounding the firms. Originality/value This study explores the joint effect of corporate risk-taking and financial constraints on cash holding, and hence considers the strategic adaptations to navigate uncertainty in strategies related to cash holdings in Saudi Arabia.

Impact of trust-building strategies on investment decisions: Mediating role of the financial advisor-client relationship

Trust is a fundamental element in financial interactions, particularly in the advisory sector, influencing investment decisions and overall client satisfaction. This study aims to explore the impact of trust-building strategies on investment decisions through the financial advisor-client relationship. The research employs a structured questionnaire to gather data on trust-building strategies, the advisor-client relationship, and investment decisions. The study found that trust-building strategies, such as transparency and competence demonstration, positively influenced investor decisions. Specifically, 78% of investors reported increased confidence in their investment choices after engaging with advisors who prioritized transparency and expertise. Moreover, 85% of investors indicated a preference for advisors who demonstrated reliability and ethical conduct, leading to a stronger advisor-client relationship. The findings underscore the importance of trust in financial advisory services and suggest that enhancing trust through transparent practices can lead to more informed and collaborative decision-making processes. The study emphasizes the evolving nature of investment decision-making and proposes integrating technological innovations like AI and robo-advisors. The study provides valuable insights for financial institutions to invest in advisor training and guidance, benefiting all stakeholders involved.

Assessing corporate climate action: Corporate climate policies and company-level emission reductions

Private investment decisions are expected to play a decisive role in redirecting capital flows in line with the Paris Agreement. The financial sector and policymakers have emphasized the role of corporate climate action and climate-related disclosure, including backward-looking emissions figures and forward-looking information on corporate climate policies to enable investors to reallocate capital to firms with promising emission reduction pathways. However, there is at best inconclusive evidence on the relationship between corporate climate policies and subsequent company-level emission reductions. Previous research was limited by small sample sizes and short observation periods, impeding the analysis of time-lagged effects or the inclusion of company-level fixed effects. To overcome these shortcomings, we draw on a new dataset with 17,198 observations from 1,749 companies that disclosed their corporate climate policies between 2010 and 2022. While our results show only a weak link between individual policies and company-level emissions, we find some evidence for an improved climate performance for absolute emissions for companies that introduced a comprehensive corporate climate policy mix. This is in line with public policy research that has found comprehensiveness to be an important dimension for public policy mixes and emphasizes the role of a mix of corporate climate policies rather than relying on individual measures.

The Influence of Financial Literacy and Islamic Business Ethics on Investment in Islamic Financial Instruments: The Mediating Role of Risk Attitude and the Moderating Role of Religious Knowledge

Current challenges in the Islamic banking sector highlight the urgent need to understand the factors influencing ethical and informed investment decisions. This study aims to analyze the impact of financial literacy and Islamic business ethics on investment in Islamic financial instruments, focusing on the mediating role of risk attitude and the moderating role of religious knowledge. Data were collected through a primary method by distributing questionnaires to 300 bank customers and students in Aceh, Indonesia. The model employed is Structural Equation Modeling-Partial Least Squares (SEM-PLS) using Smart PLS software. The findings reveal that financial literacy significantly positively impacts investment decisions and risk attitudes. Islamic business ethics also significantly influence both investment decisions and risk attitudes. Religious knowledge positively affects investment decisions, while risk attitude has a positive impact on investments. However, the moderating effects of risk attitude and religious knowledge on investment are not significant. Risk attitude serves as a crucial mediator in the relationship between financial literacy and investment, as well as between Islamic business ethics and investment. The study underscores the importance of financial literacy, Islamic business ethics, religious knowledge, and risk attitude in shaping investment behavior in the Islamic finance sector, and highlights the need for integrating ethical practices to enhance investment outcomes.

FACTORS INFLUENCING INVESTMENT DECISION-MAKING IN GENERATION Z

This study aims to provide empirical evidence about the factors that affect investment decision-making in generation Z. The sampling method used is a non-probability purposive sampling method with generation Z students as a research sample. The age range included in the category of generation Z students is those aged 18-26 years. The analysis method used is Partial Least Square (PLS). The results of the study show that financial literacy, attitude towards investment, and risk perception have a significant influence on investment decision-making among Generation Z students. Financial literacy and attitude towards investment have a positive effect, while risk perception has a negative effect on investment decisions. Although herding does not have a direct effect on investment decision-making, it does affect attitudes towards investment, which then influences investment decisions. This shows that the investment trends and investment decisions of others can shape students' investment attitudes, which ultimately influences their decision to invest. Technological advances and broad access to information, particularly through social media, seem to reduce the direct influence of herding but increase the role of influencers in shaping investment attitudes.

Investment Potential in Latin America under the Belt and Road Initiative

This study analyzes the current state, influencing factors, and potential of China's investments in Latin America under the Belt and Road Initiative (BRI). Through a systematic review of China's investments in sectors such as mining, energy, agriculture, infrastructure, and manufacturing in Latin America, the research explores the impact of geographical distance, institutional quality, infrastructure level, and cultural differences on Chinese enterprises' investments. The findings suggest that despite the vast geographical distance between China and Latin America, economic ties are strengthening through overseas infrastructure investments and financial cooperation. The study proposes policy recommendations to further promote bilateral investments through institutional reforms and localized strategies. The research provides theoretical support for Chinese enterprises' investment decisions in Latin America and serves as a valuable reference for policymakers.

Are crypto-investors overconfident? The role of risk propensity and demographics. Evidence from Brazil and Portugal

PurposeThe crypto market is growing quickly, marked by a lack of fundamentals, and the risks are not yet fully comprehended by participants. Our goal is to investigate overconfidence in this market and analyze the role that risk propensity and certain demographics play.Design/methodology/approachWe conducted a survey in Brazil and Portugal, leveraging an online questionnaire disseminated via social media channels to engage a diverse adult population. We collected a total of 826 responses, addressing ethical considerations throughout the process. The data analysis was conducted using SPSS statistical software and logit regression modeling.FindingsOur study reveals that overconfidence is a notable bias that distinguishes individuals who invest in cryptocurrencies from those who do not. Although overconfidence and risk propensity are closely linked, they originate from distinct personal characteristics. Furthermore, our findings indicate that age and market experience positively correlate with overconfidence and negatively correlate with risk propensity. Financial knowledge, interestingly, did not prove to be a significant factor for cryptocurrency investment.Originality/valueOur research augments the existing literature on overconfidence, delving into this phenomenon in a new subdomain, and in doing so, it enriches our comprehension of the unique and still relatively under-researched cryptomarket. Moreover, we illuminate individual factors that sway the decision to invest in cryptocurrencies and should be considered by market participants.Highlights(1)Pioneering work examining the presence of overconfidence bias among crypto-investors, using a robust data set collected from a binational survey.(2)Verifies the relations among overconfidence, risk propensity, and demographics.(3)Examines the influence of age and experience on investment decisions, revealing a positive relationship with overconfidence and a negative correlation with risk propensity.(4)Logistic regression is used to determine the combined effect of overconfidence, risk propensity, and demographics on the decision to invest in cryptocurrencies.

Sizing large-scale industrial heat pump for heat recovery from treated municipal sewage in coal-fired district heating system

Electrification of district heating and deep integration of sectors of national economies are fundamental elements of the future smart energy systems. This paper discusses the problem of optimal sizing of large-scale high-temperature heat pumps using treated sewage water as a heat source in a coal-fired district heating system. The study presents an approach to modelling of heat pump system that enables techno-economic analysis for investment decision making. Such analysis is enabled by a black-box-type identification model of the selected industrial heat pump. The model was developed based on the data generated by physical modelling of the heat pump using Ebsilon Professional software. In addition, it is proposed that the heat pump system is integrated with a dedicated photovoltaic power plant. The case study takes into consideration site-specific technical, economic, ecological, and legal constraints, weather conditions, hydraulic performance of the heat-ing network, and variability of loads within the sewage and the district heating systems. The results revealed that the proposed modelling approach is effective regarding multiple simulations and system optimisation. In addition, it was found that large-scale heat pump projects can be technically feasible and profitable if the heat pump is appropriately sized and operated. In the given case, the optimum size of the heat pump for a city of around 180 000 inhabitants is around 12 MW under maximum winter load.

Credit Scoring Model Weighted by Investment and Financing Decisions: Case Study in a Building Supply Store

Current literature provides various models for credit risk analysis, called Credit Scoring Models (CSMs). However, these models are not suited to the majority of Micro and Small Enterprises (MSEs). This is compounded by a lack of technical knowledge of microentrepreneurs linked to the high costs and complexity of the CSMs. These issues are significant as 99% of Brazilian companies are MSEs. Therefore, this paper aims to propose a CSM for an MSE that commercializes construction materials in São Paulo, Brazil. This research is quantitative and characterized as a case study whose CSM is based on the Naive Bayes algorithm implemented in Microsoft Office Excel 2016. This model calculates the probability of default and adherence by weighting the results based on the Modern Finance Theory with the Cost of Denying and the Cost of Granting. The application of the model demonstrates that the successes in approvals (70%) and disapprovals (66%) of Credit Sales were significant with a result of R$ 32.20 thousand and an increase in net profit by 124.2%. We have evidenced that the proposed CSM is able to weigh the risk in investment and financing decisions for the Credit Sales of an MSE. This paper provides a low-cost CSM, adapted to reality and easy to handle and implement in MSEs. This research is a reference to the development of CSMs focused on the credit concessions conducted by MSEs.

The Effect of Trading Volume Activity, Profitability and Solvability on Stock Returns

This study aims to obtain empirical evidence regarding the effect of trading volume activity, profitability and solvency on stock returns. This study analyzed 122 samples of banking companies listed on the Indonesia Stock Exchange for the 2019-2022 period. The samples were selected through purposive sampling method and analyzed using multiple linear regression. The results of the study indicate that trading volume activity has no effect on stock returns, profitability has a positive effect on stock returns and solvency has a negative effect on stock returns. The theoretical implications of this study are able to confirm the signal theory based on the hypothesis tests conducted. The practical implications of this study provide knowledge and can be used as consideration for companies regarding financial management policies and as considerations for investors regarding investment decision making

Real Options Analysis of Constructed Wetlands as Nature-Based Solutions to Wastewater Treatment Under Multiple Uncertainties: A Case Study in the Philippines

Constructed wetlands (CWs) are man-made ecosystems that mimic the properties of natural wetlands. They are being utilized to treat various types of wastewater, from domestic to agricultural, municipal, commercial, and industrial effluents. Despite their economic viability and environmental benefits, their widespread adoption is challenged with several uncertainties, including public support, technology learning, and the impacts of climate change. This study proposes a valuation framework that considers these uncertainties to analyze the feasibility of CWs. Using existing CWs in the Philippines as a case, this study employs the real options approach to (1) evaluate the feasibility of CW projects using cost–benefit analysis, (2) calculate the value of postponing decisions to implement CWs projects using real options analysis, and (3) identify the optimal investment decisions for CWs considering the opportunity costs of waiting and uncertainties in public support and the impacts of climate change. Results found that the project is feasible with a net present value of USD 88,968. Yet, the real options value at USD 208,865 indicates that postponing the project may be a more optimal decision. Considering the cost of waiting, the valuation identified the threshold at 5.56% to immediately implement the project. The calculated values increase with uncertainty in public support but decrease with uncertainty in climate change’s impacts. Yet, these uncertainties prolong the decision to implement CW projects until they are resolved. The findings from this case study provide a basis for recommendations to support the adoption of CWs as nature-based water treatment for a more sustainable future.

A Study on Stock Analysis of Automobile Industries

This study investigates the stock movement of automobile companies listed on the NIFTY50 index, focusing on five major firms: TVS Motor, MRF, Ashok Leyland, Maruti Suzuki, and Tata Motors. Using quarterly and annual data from January 2021 to December 2021, the analysis identifies key trends and volatility factors impacting stock prices in the automotive sector. Key findings suggest that fluctuations in stock prices are influenced by quarterly performance, industry trends, and macroeconomic conditions. Additionally, the report highlights the impact of the COVID-19 pandemic on the sector, with companies facing challenges such as reduced demand, increased costs, and supply chain disruptions. The study concludes that stock movements in this industry are volatile, urging investors to monitor these fluctuations closely before making investment decisions.

Integrating the SDGs into capital investments: an interventionist research study informed by a serendipitous approach

ABSTRACT This research explores how and to what extent companies can integrate sustainable development goals (SDGs) into their capital investment decisions. For a company that wants to become sustainable, evaluating where best to invest one's capital presents a practical problem because most tools for assessing returns on investment rely solely on financial indicators, not on broader measures of worth, such as environmental or social impacts. Additionally, existing frameworks that incorporate non-financial indicators tend to be targeted at shareholders looking to invest in entire companies, not at companies looking for ways to embed the SDGs into their capital outlays. To solve this problem, we undertook interventionist research devised around serendipity theory where we worked with a group of companies to develop a tool for helping companies to align their capital investments with specific SDG indicators. The result was a co-developed framework for supporting decisions about a company's capital investments informed by the SDGs. The research lasted for 17 months and evolved through five phases: identifying the problem; selecting a pilot investment and identifying the SDG targets; identifying key performance indicators (KPIs); critically assessing the KPIs and finalising the KPIs. This research contributes to accounting theory and practice in two ways. First, it outlines serendipity theory as an effective framework for guiding interventionist research towards finding helpful solutions to practical accounting problems. Second, it offers a 4-step method for integrating the SDGs into capital investment decisions. This answers the call for accounting research to engage with companies in the SDGs' pursuit.