Enterprise Investment Research Articles

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.

Investment and financing maturity mismatch: Moderating role of financialization in regulatory context for A-share listed Chinese companies

As the financialization issue is getting more and more attention, the behavioral motives and effects behind this appearance should not be ignored, and it is of great practical significance for the high-quality development of China's real economy to explore the impact and mechanism of the financialization trend on the investment and financing maturity mismatch of China's real enterprises. Using sample data of Chinese A-share listed companies from 2013 to 2020, this article empirically examines the impact of financialization on the investment and financing maturity structure from a new perspective of asset classification by using a fixed-effect model, and explores the mechanism of the financial regulatory environment's moderating effect on the relationship between the two mentioned above. The study shows that: there is an inverted U-shaped nonlinear relationship between the financialization of investment income and fixed income and “maturity mismatch “. The term mismatch of investment and financing increases with the degree of financialization, after reaching the critical point, it eases with the deepening of financialization. However, the specific point of view is different. In the sample interval, the investment income financialization exacerbates the investment and financing maturity mismatch more obviously; the fixed income financialization inhibits the investment and financing maturity mismatch more obviously. Under the different perspectives of the firms' ownership nature, financing constraints, and principal-agent problems, there are differences in the impact of firms' allocation of different types of financial assets on the investment and financing term structure. In addition, the regulatory effect of financial supervision weakens the inverted U-shaped relationship of investment income financialization with investment and financing maturity mismatch; it enhances the inverted U-shaped relationship between fixed income financialization and investment and financing maturity mismatch. In general, financial supervision has had a significant positive effect on investment and financing maturity mismatches. The findings have important policy implications in terms of corporate real investment, financial market development, and financial regulation, which can help promote China's economic development and stability.

Chinese SOEs’ technological upgrading through OFDI: The impact of political ties and subnational institutions. A survey of literature

This paper presents a systematic literature review on the relationship between outward foreign direct investment (OFDI) and technological upgrading in Chinese state-owned enterprises (SOEs), emphasizing the moderating role of political ties and subnational institutions. Analyzing 51 core papers from 2011 to 2022, the study synthesizes key theories on how political ties influence Chinese SOEs’ technological upgrading through OFDI. It also finds that political ties affect motivations and resources of SOEs with various types of state ownership and thus affect their OFDI strategies and innovation capabilities. This research further explores the impact of subnational institutions and their interactions with political ties. The findings underscore the perspective that subnational institutions shape a firm’s learning capability, and their impact is moderated by SOEs’ political ties. Finally, the study identifies key issues in SOEs’ technological upgrading through OFDI and offers valuable insights for policymakers and SOE managers. Future research directions are outlined to understand the impact of OFDI on the technological upgrading of Chinese SOEs.

Evaluation of the value of Internet platform Enterprises in the digital economy by the big data cooperation asset valuation model

With the innovation of information technology, the national industry has been adjusted and upgraded, and the development of the Internet industry has had a huge impact on economic development. The investment and financing of network enterprises and the merger and acquisition of network companies need to evaluate the value of network companies. In this regard, this paper evaluated the value of Internet platform enterprises under the digital economy based on the Big Data (BD) cooperation asset valuation model. This paper analyzed the factors affecting the value evaluation of Internet enterprises and discussed the advantages of BD cooperative asset valuation model in the value evaluation of Internet enterprises in the digital economy. The BD cooperation asset valuation model was constructed, and the value evaluation experiment of Internet platform enterprises under the digital economy was carried out. The experimental results of this paper showed that in the evaluation of the profitability value of Internet enterprises, the difference between the net sales interest rate was 0.14%–0.51 %. The difference between the net interest rate of equity was 0.09%–0.67 %, and the difference between the net interest rate of total assets was 0.19%–0.92 %; in terms of the evaluation of the operating capacity of Internet enterprises, the difference between the current asset turnover rate was 0.05–0.16. The difference of non-current asset turnover rate was 0.02–0.15, and the difference of total asset turnover rate was 0.01–0.16. The evaluation value based on the BD cooperation asset valuation model was not different from the actual enterprise value, which showed that the BD cooperation asset valuation model had good advantages in the evaluation of the value of Internet enterprises.

Information-analytical support to business processes for making investment decisions

The object of this study is the business processes of making an investment decision based on determining the state of the investment attractiveness of the enterprise. To support the adoption of investment decisions under the conditions of a fast-moving and dynamic environment, information-analytical support to the algorithm using intelligent information systems has been developed. The relevance of the study is justified by the continuous development of digitization processes, in particular in the financial realm. The traditional approach to the reproduction of management decision-making technology is complemented by the tools and methods of intelligent information systems. In particular, the modeling of the target subject area using UML made it possible to determine the main requirements for the projected information-analytical support (user roles, available options, types of connections and the logic of interaction between them). SQL queries to the information database speed up the process of processing and obtaining the necessary data samples. Business intelligence (BI) tools are used to create interactive reports that provide access to operational financial data. At the stage of making investment decisions, these tools make it possible to study a wide range of analytical data based on the results of the assessment of the investment attractiveness of the enterprise obtained at the previous stage of the developed algorithm. Monitoring of the main indicators of the enterprise's investment attractiveness is carried out on the basis of a dashboard, an information panel (display) with graphs, tables, and figures that clearly reflect the dynamics and rates of change of the investigated indicators. The results of the use of algorithmic information-analytical support make it possible to quickly prepare and make investment decisions. A visual description of the projected information-analytical support, visual content of the results of investment analysis, the validity of decisions due to the use of reliable retrospective information from an aggregated database

Development of a mechanism for managing the level of investment in R&D of city-forming enterprises (by the example of the metallurgical industry)

The object of the study is investment in R&D of enterprises. The problem of developing a mechanism for managing the level of R&D investment at industrial enterprises has been solved. The results are obtained: – gradation of R&D investment levels at enterprises based on the application of the beta coefficient calculation methodology adapted to the R&D sphere; – distribution of city-forming enterprises of the metallurgical industry by R&D investment levels: high level – 27 % of surveyed enterprises, average – 18 %, low – 55 %, critical – 0 %; – development of a matrix based on the comparison of the level of R&D investment and the level of sales volumes of the enterprise's products calculated according to one algorithm. For each cell of the matrix, management decisions of strategic nature are proposed to increase the level of R&D investment. The results obtained are explained by the assumption of a linear relationship between the size of R&D investment of a particular enterprise over time and aggregate industry R&D investment (as a benchmark). The tendency of R&D investment growth in the industry, regularity of R&D investments of the surveyed enterprises were confirmed, time series of R&D investment both at the evaluated enterprise and in the industry as a whole were processed using trend smoothing. The features of the obtained results lie in the application of comparable coefficients (investments in R&D), as well as in the application of the developed assessment in the management of the enterprise. The practical significance of this study results is the possibility of applying the obtained conclusions and recommendations to increase the level of R&D investment of large industrial enterprises in the volume, scope and conditions corresponding to the developing economy

Методологические проблемы оценки капиталовложений электросетевых компаний

In the article the author reveals the most significant methodological problems in this most important area, which is the basis for the reproduction of economic systems, on the basis of considering the most widely used methods of capital investment assessment. The article also provides a brief theoretical characterization of capital investments. It is concluded that the reason for methodological problems in the assessment of capital investments is the issue of the nature of capital, which has not been fully resolved in the field of fundamental economic theory. The author draws attention to the fact that the detailed methods of capital investment assessment for specific conditions of management of individual sectoral economic systems, elaborated in scientific articles, dissertations and other works, do not receive scientific generalization and balanced assessment of the community. In fact, it means that there are no methods proven and used by many researchers and practitioners. It is shown that it is inappropriate to completely identify the investment process, project appraisal and capital investments of enterprises. The author points out the gap between financial and technological efficiency existing in the theory and practice of work with investments. Further, using the example of the Russian electric power transmission industry, the author shows how general methods of capital investment assessment may not be applicable depending on specific industry conditions, and how theoretical and methodological problems in practice turn into a lack of tools for decision-making. In conclusion, based on the consideration of disproportions in the mechanism of capital investment assessment, implementation and regulation, another fundamental issue of the theory arises – the need to change approaches to the conflict of interests and regulation of natural monopolies as a non-cooperative game.

Research on Factors Affecting Digital Marketing Investment Activities in Small and Medium Enterprises in Hanoi City

In the ever-evolving technology landscape, digital marketing has been thriving globally. Investing in digital marketing activities is crucial for businesses in general and SMEs in particular. The study selects the scope of small and medium enterprises (SMEs) in Hanoi city to evaluate factors affecting digital marketing investment activities in small and medium enterprises. The study uses both qualitative and quantitative methods. The research results identify five factors affecting digital marketing investment in small and medium enterprises (including leadership capacity, quality of human resources, financial ability, corporate culture and scientific and technological capacity). The research results can serve as a basis for solutions to improve digital marketing investment activities in small and medium enterprises, as well as valuable information for reference for small and medium enterprises in Hanoi in making investment decisions.

Research on the Synergy between Economic Returns and Safety Investments in Enterprises

Coal, as a key input factor to ensure China's economic growth, plays an important role in the orderly development of its industry. The safety guarantee of production link is the only way to ensure the stable development of the industry, so it is in urgent need of the investment of safety funds and effective implementation to protect it. As a high-risk industry, the coal industry has a poor working environment, difficult working conditions, backward safety technology, and endless hidden dangers. In the process of development, the coal industry blindly pursues benefits while ignoring safety investment, which is exactly a common problem in China's coal enterprises and also the deep cause of coal mine safety accidents. This paper uses relevant theories to analyze the effect of coal enterprises' safety investment on economic benefit and determine its equilibrium point of safety and economic benefit. From micro level of building model, neural network model for coal enterprise economic benefit is explained variable, safety input as explanatory variables, core number of coal production, labor, labor productivity, and fixed assets and intangible assets investment as a intervening variable, such as inspection cause nonlinear relationship between safety investment and economic benefit are intermediary variables, measure the influence of different variables on economic benefit enterprise security mechanism, which integrated the result of theoretical analysis and empirical research, puts forward coal enterprises safety investment economic efficiency maximization of promotion strategy.

Foreign Direct Investment and New Quality Productivity of Enterprises

Now China is opening up to the outside world at a high level. In the process of utilising foreign investment, it is significant to study how foreign direct investment (FDI) affects the formation of new quality productivity of enterprises in China. This paper examines the impact of FDI on new quality productivity of enterprises. Results using financial statement data of A-share listed companies and FDI level data of the cities where the companies are located from 2011 to 2020 show that FDI has a significant promotion effect on the enhancement of new quality productivity of enterprises. Further analysis reveals that the positive effect is generated through the channels of improving enterprise innovation ability and easing enterprise financing constraints, predominantly observed in non-state-owned enterprises. The test for moderating effect shows that a high degree of capital market openness has a significant positive effect on the formation of new quality productivity of enterprises influenced by FDI. The results of this paper provide a theoretical perspective of FDI for further research on the new quality productivity of enterprises.

ESG performance and corporate technology innovation: Evidence from China

With the concept of sustainable development and innovation-driven development strategy proposed in China, as well as the promotion of the concept of ESG, which takes into account both economic and social benefits, it is of great theoretical and practical significance to study how ESG empowers both internal management and external investors, and ultimately enhances corporate technological innovation (CTI). This paper takes Chinese A-share listed companies from 2010 to 2021 as the research object, and tries to study the impact of ESG performance on CTI and its mechanism based on the perspective of innovation process. It is found that: (1) ESG performance can effectively promote the intensity of R&D investment, innovation output and quality of enterprises, and this conclusion still holds after a series of robustness tests. (2) The innovation incentive effect of ESG performance is more obvious in enterprises in traditional industries, manufacturing industries and heavy pollution industries; (3) ESG performance mainly affects CTI through alleviating enterprise financing constraints, improving enterprise market expectations and gathering high-end research talents. The above findings have important implications for optimizing corporate ESG disclosure mechanisms and promoting CTI through process optimization.

Digital economy development and enterprise investment – a quasi-natural experiment from the pilot strategy of “broadband China”

This article analyzes the impact of digital economy development on enterprise investment by using the “Broadband China” strategy as an exogenous shock and applying a multi-period difference-in-differences (DID) model to panel data from 2010 to 2020. The results indicate that the digital economy significantly promotes enterprise investment by improving R&D, obtaining more financing from banks, and enhancing internal control. Furthermore, the impact of the digital economy on enterprise investment varies significantly among enterprises that have a high R&D expenditure, are state-owned, large-scale, lower financially constrained, or capital-intensive. The conclusion is supported by a series of robustness tests. This study clarifies the role and influence of government-led digital economy infrastructure construction on micro-enterprise investment decisions and provides recommendations for boosting the development of the digital economy and China’s enterprise investment development.

Analysis on the motivation of financial investment and the influence of financial risk of listed enterprises: A case study of A-share manufacturing industry

With the deepening of enterprise financialization, the trend of “moving away from reality to emptiness” has increased the difficulty of financial management in the manufacturing industry. This paper selects the data of A-share main board listed companies from 2012 to 2021 to study the motivation of financial investment in the manufacturing industry and its impact on financial risk. The research results show that the main motivation of listed companies’ financial investment in the manufacturing industry is “substitution” motivation. With the purpose of maximizing profits, the excessive allocation of monetary assets, especially long-term financial assets, increases financial risks of enterprises. Furthermore, the financial risk caused by the financial investment of state-owned enterprises is greater.

Comparative Analysis of Shandong Free Trade Zone and Liaoning Free Trade Zone

Free trade zone is a trade-oriented reform based on its functions and positioning by regional characteristics. To build free trade zones, China began to promote the reform of free trade zones, and since then various free trade zones have been established in succession. This paper is based on the effectiveness of the Liaoning Provincial Free Trade Zone and Shandong Provincial Free Trade Zone, from the three aspects of the Regional Comprehensive Economic Partnership’s national trade initiatives, cross-border funds facilitation of financial policies, and the East and West Avenue Golden Hub. According to analyzing and comparing the policy initiatives and the case effectiveness of the free trade zones in the two provinces which have similar target positioning and concerning the problems in the above three aspects, it is important to give three suggestions as follows. First, put forward a proposal to solve the problem of foreign investment enterprise. Second, expanding the trade scope of the Belt and Road. Third, opening up cross-border funds. And last, there are also some corresponding prospects about the above three problems.

Coupling Coordination Analysis of Green Tourism - Regional Economy - Regional Logistics

By using the panel data of 30 provinces and cities in China from 2011 to 2021, the entropy weight method, coupled coordination model and obstacle degree model are used to construct the coupled coordination index system of green tourism, regional economy and regional logistics, and explore the spatio-temporal evolution, coupled coordination evolution characteristics and impact factors of different regions. The results showed that: (1) Green tourism and regional economic system showed an overall upward trend, while regional logistics system showed a trend of first increase and then decrease. (2) The coupling coordination degree showed an upward trend, from moderate imbalance to mild imbalance, but the overall coupling coordination degree in the country was not high enough. (3) Total investment of foreign-invested enterprises, express delivery volume, total import and export volume of business units, and total postal business are the main obstacle factors. They are the main obstacle factors of economic development module, regional logistics scale module, economic development scale and logistics infrastructure module respectively.

Customer structure and R&D investment: Based on innovative trait

This paper selects China's A-share listed companies in the manufacturing industry from 2017 to 2022 as a research sample to explore the relationship between customer structure and enterprise R&D investment. It is found that customer concentration has a significant negative impact on the R&D investment of manufacturing enterprises, and the mediating effect of enterprise financing constraints is significant; the main customers of enterprises with innovative traits can promote the R&D investment of enterprises, and the moderating effect of customer innovative traits is significant.

Impact of online communication on the ambidextrous innovation investment of enterprises

With the rapid progress of China's information technology and digital economy, investors, especially retail investors, can communicate directly with enterprises on online platforms of stock exchanges. In this paper, using crawler means to collect all the question-and-answer (Q&A) logs on online platforms and taking A-share listed firms in 2010∼2020 as samples, we explore the effect of online communication between investors and enterprises on corporate ambidextrous innovation investment. The results show that such online interaction can greatly encourage developmental and exploratory innovation investment and play a more significant effect in the latter; the quality of communication is positively related to ambidextrous innovation investment, but excessive attention to investor returns in the interaction process restrains ambidextrous innovation investment. We take various approaches, such as the entropy balancing test, the instrumental variable method, and the Heckman two-stage method, to confirm the validity of the results. The mechanism test shows that interaction can increase ambidextrous innovation investment mainly by alleviating corporate financing constraints and improving corporate governance. Furthermore, we find that this effect is more evident in state-owned firms than in non-state-owned firms and that the promotion effect of interaction on ambidextrous innovation investment eventually helps improve firm value.

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.

ESG Studies the Impact on Enterprise Investment and Financing Decisions

ESG Studies the Impact on Enterprise Investment and Financing Decisions

The Impact of Sharia Working Capital Financing and SME Investments on Economic Growth in South Sulawesi

This research aims to: (1) examine the effect of Islamic working capital financing on economic growth in South Sulawesi; (2) explain the effect of Micro, Small, and Medium Enterprises (MSMEs) investment on economic growth in the region; and (3) describe how the combination of Islamic working capital financing and MSME investment from Islamic Commercial Banks (BUS) and Islamic Business Units (UUS) affects economic growth in South Sulawesi. This research was conducted from August to September 2023 using quantitative descriptive methodology. Data on the level of economic growth was obtained from the South Sulawesi Central Statistics Agency (BPS). A non-probability sample of 32 was taken using saturated sampling technique from quarterly financial reports. The data collection methods used were documentation and observation. Data analysis was performed using multiple linear regression analysis on SPSS 20 by IBM. The research findings show that: (1) partially, Islamic working capital financing has a negative and significant impact on economic growth in South Sulawesi; (2) partially, MSME investment has a positive but insignificant impact on economic growth in South Sulawesi; and (3) simultaneously, Islamic working capital financing and MSME investment have a positive and significant impact on economic growth in South Sulawesi.