Investment Perspective Research Articles

Impact of Hedge on the Firm Value of Consumer Cyclicals Companies Listed in the Indonesian Stock Exchange

One indicator that shows how effective and efficient a company is in achieving its goals is its financial performance. Maintaining and improving financial performance is mandatory for a company to continue to exist and attract investors. This financial information functions as a means of information, a tool for management accountability to business owners, a representation of company success indicators, and consideration for decision making. Tobin's Q is an indicator that can be used to measure a company's financial performance from an investment perspective. The aim of this research is to find out the conditions and determinant factors in analyzing financial performance in consumer cyclical companies for the 2015-2022 period. The research method uses dynamic panel data regression with the Arellano-Bond Generalized Method of Moment (GMM) approach on 24 consumer cyclical sector companies from 2015 to 2022 listed on the BEI. The research results show that partially the company value in the previous period (Tobin’s Q(-1)) has a significant positive effect and can be backward looking towards achieving high and sustainable company value (Tobin’s Q) in the next period. Profitability (ROA) has a significant positive effect on company value (Tobin’s Q). This shows the company's prospects for sustainability in the future.

Reforestation and sylvopastoral systems in Sahelian drylands: evaluating return on investment from provisioning ecosystem services, Senegal

Since the 1960s, droughts have caused significant degradation of Sahelian ecosystems, particularly resulting in a reduction in tree cover. Despite the challenges posed by climate change, the rural Sahelian population continues to depend on natural resources for pastoral livestock farming, which remains a critical source of livelihood. To address this issue of land degradation, Sahelian states and international coalitions are prioritizing efforts to restore pastoral land through reforestation programs. These initiatives aim to enhance ecosystem services, generate new income for the population, and safeguard biodiversity.In practice, however, reforestation has often led to a depletion of resources for communities due to enclosure policies. This paper explores various land management models for reforestation within a pastoral context through provisioning ecosystem services (PES) modeling.This study quantifies the economic potential of PES offered by reforestation programs in Senegal. It employs a quantitative methodology to assess the profitability of these operations from the perspective of pastoral economies. The analysis reveals that the PES benefits of reforestation can significantly enhance the economic potential of sylvo-pastoral productions if resource access is negotiated collaboratively between pastoralists and forestry extension services during reforestation activities and after. From an investment perspective, the economic viability of reforestation operations in drylands is questionable. The findings suggest that when evaluated solely in terms of PES profitability, these programs may not be financially sustainable. The sustainability of these investments would require taking into account supporting and regulating ecosystem services.

The contagion effect of heterogeneous investor groups.

This paper suggests an alternative approach to measuring systemic risk in financial markets by examining the interconnectedness among heterogeneous investors. Utilizing variance decomposition and a trading database from the Korea Stock Exchange spanning 2002-2018, we find that systemic risk, as quantified by total connectedness based on microlevel investor activity, intensifies during both domestic and global financial crises. In addition, our analysis indicates that retail investors, often termed noise traders, are pivotal contributors to the propagation of financial shocks. We also find that portfolios constructed by the sensitivity of total connectedness yield additional returns. This study could enhance our understanding of the contagion effect by incorporating the investor perspective, and the findings could offer valuable insights for policy-makers and regulators.

Risk Management Case Analysis of ICBC's "Crude Oil Treasure" Incident

Driven by the marketization of interest rates and technological innovation, commercial banks in China continue to innovate various financial services businesses and devote more attention to attracting customers to purchase various investment and wealth management products in order to expand sources of bank performance and gain more benefits. In 2018, paper crude oil-linked wealth management products emerged. Paper crude oil products are linked to the prices of international crude oil futures contracts. The products feature controllable risks and relatively high returns, which are very popular among large numbers of customers. However, despite the continuous expansion of China's financial derivatives trading volume, the categories of derivative products and regulation still have many limitations. The development of innovative paper crude oil-linked products is not perfect and has many potential risks, which are highly susceptible to market fluctuations. Taking China Bank's "Crude Oil Treasure" product as the research focus, this paper analyzes the massive loss incident that occurred in late April 2020 through case study analysis and qualitative analysis methods. It is divided into four parts. The introduction part explains the research background, significance, content, methods and innovations and inadequacies of this paper. The first part sorts out the background and process of the "Crude Oil Treasure" case at China Bank and elaborates on the operating principles of this product. The second part analyzes the "Crude Oil Treasure" case in detail. It first focuses on the problems in the product's trading liquidity, domestic and international time differences and product promotion. Then it focuses on the internal and external causes of the case, discussing external factors such as international crude oil market turmoil and futures trading characteristics, and internal factors such as product design, risk control and lack of experience. It also evaluates the hedging strategy, contract design and compliance of the "Crude Oil Treasure" product. The third part mainly analyzes the impacts of the "Crude Oil Treasure" rollover incident and China Bank's subsequent response measures. The fourth part puts forward certain countermeasures and suggestions from the perspectives of bank management, investors and regulatory agencies to prevent such incidents from recurring based on the case analysis.

Foreign Ownership and Corporate ESG Performance

Foreign shareholders are important participants in China's capital market. This article explores the relationship between foreign shareholders and corporate ESG performance, aiming to explore how to guide foreign shareholders to play a positive role in Chinese listed companies. The study reveals the following findings: There is a significant positive correlation between foreign shareholding and corporate ESG performance, indicating that foreign shareholders can promote the improvement of ESG performance. Foreign shareholding enhances ESG performance through two channels: constraining short-termism by managers and improving information transparency.Media attention significantly strengthens the positive relationship between foreign shareholding and corporate ESG performance.The research in this article provides empirical evidence for the government's gradual relaxation of the foreign shareholding ratio and encourages foreign shareholders to have a long-term investment perspective. It also helps listed companies formulate appropriate policies to effectively utilize foreign resources.

Temperature anomalies and foreign direct investment: City-level evidence from China

We use temperature anomalies, calculated as temperatures deviating from historical average temperatures, as proxies of climate change, and investigate the impact of climate change on foreign direct investment (FDI) in Chinese prefecture-level cities. The empirical results indicate that increases in temperature anomalies have a significant and negative cumulative effect on FDI, and that the impact lasts for only two years. Although the impact is not heterogeneous between rich and poor cities, FDI in rich cities responds more quickly to temperature anomalies, and the impact lasts longer in rich cities. We provide the following two possible channels through which temperature anomalies affect FDI: economic development and demographics. Our results are robust to a series of tests. We provide evidence of the relationship between climate change and economic activities from a new perspective of foreign investment, highlight the influential channels and confirm the role of climate change in determining FDI locations.

Fiscal policy and stock markets at the effective lower bound

We study the impact of fiscal policy at the effective lower bound (ELB) in the stocks markets of the Euro Area, by specifically looking at a government spending shock. To uncover the impact of this shock, we estimate a factor-augmented interacted panel vector-autoregressive (FAIPVAR) model. We find statistically different impacts of the government spending shock across the ELB and non-ELB periods, with relatively stronger positive impact on stock returns under the former. Conversely, the differences are not statistically significant for the United States using a time series data-based FAIVAR. Our findings have important implications from the perspectives of both policymaking and investors.

Does government investment push up manufacturing labor costs? Evidence from China

China’s labor costs have risen rapidly compared with other emerging market countries in recent years. Government investment is an essential factor pushing labor costs, a unique and exciting phenomenon in China. This paper explains why labor costs in China’s industrial manufacturing industry have rapidly increased from the local government investment perspective. First, the government’s preference for investment in infrastructure construction creates labor demand and drives up labor costs. Second, the improvement of infrastructure lowers the transaction costs of the enterprise sector, thus expanding the scale of production and triggering a rise in labor costs. The empirical results show that for every 1% increase in government investment, the unit labor cost increases by 0.0013 units, and the nominal labor cost increases by 1.443 units. A series of robustness tests support the results. China should rationally control the scale of government investment so that labor costs are in a moderate growth range and then promote the sustainable development of enterprises.

Does commodity exposure benefit traditional portfolios? Evidence from India

Commodities and commodity futures are expected to benefit stock and bond portfolio diversification because traditional asset types like equities and bonds have low correlations with commodities. During periods when stocks and bonds may underperform, commodities may provide a hedge against inflation and other economic uncertainties. This study investigates the diversification benefits of adding commodities to a traditional portfolio of stock and bonds from the perspective of an Indian investor. It employs several commonly used asset allocation strategies such as mean-variance, equal risk contribution, most diversified portfolio, and equal weight portfolio on different commodity derivative groups. The performance of various portfolios indicates that not all commodity groups provide substantial diversification benefits to a traditional portfolio. Agricultural commodities enhance performance (with an Omega ratio of 1.654), whereas metal and energy-related commodities do not diversify the traditional portfolio significantly (Omega ratio of 1.087 and 0.945, respectively). Gold and different equity sectors also provide some diversification benefits. This study also supports the hypothesis that the behavior of different commodity groups is quite different. AcknowledgmentThe infrastructural support provided by the FORE School of Management, New Delhi, in completing this paper is gratefully acknowledged.

Market momentum amplifies market volatility risk: Evidence from China’s equity market

We examine the role of a belief-based momentum indicator, measured by conditional past returns (CPR), in the realized volatility (RV) predictability of equity markets. Based on the week- and month-horizon CPR, we construct the HAR-CPR and HAR-LCPR models on the basis HAR-RV model. Here, the HAR-LCPR model additionally includes the daily leverage factor in the absence of daily CPR. In China, we find that: 1) week- and month-horizon CPR have significantly positive impacts on one-, five-, and 22-days-ahead RVs; 2) our out-of-sample results further indicate that the HAR-LCPR model performs best in forecasting one- and five-days-ahead RVs, whereas the HAR-CPR model is a more reliable forecasting model for 22-days-ahead volatility; 3) the performance also passes various robustness tests, including sub-period performance testing, alternative training rolling window, and alternative RV estimation. We show the economic mechanism underlying the predictive role of CPR from the perspective of investors’ trading activities.

소셜벤처 비즈니스 모델 유형별 투자선호도가 투자의도에 미치는 영향

The purpose of this study is to analyze the effect of preferences for each of the three types of social venture business models, a hybrid organization, on investment intention. In addition, it is intended to verify the mediating role of positive emotions in the relationship between preferences by type and investment intention. In order to conduct this study, a survey was conducted on 101 investors.
 The results of the study are as follows. First, based on the hybrid characteristics of social ventures, the types of business models were classified into 'Embedded', 'Integrated', and 'External', and the relationship between type preference and investment intention was analyzed. Second, positive emotions have been shown to play a mediating role in the relationship between preferences for social venture business models and investment intentions.
 Based on the results of this study, the following implications were presented. First, the higher the preference for embedded, integrated, and external business model types, the higher the investment intention, so it is necessary to analyze investment cases by business type in detail to find ways to reduce investor uncertainty. Second, social venture managers should consider what business activities to include social missions in and include them as sustainable programs so that they can lead to investment intentions. Third, from the perspective of investors, it was confirmed what factors are needed and affect in investing in social venture business. Through this, social venture managers will be able to establish specific strategies that can be presented to investors. Finally, through this study, various follow-up studies by domestic investors, social venture companies, and related parties can be expected by verifying the relationship between investors' positive emotions and investment intention variables according to the type of social venture business model.

Asymmetric Information, Earnings Management and Cost of Equity

The purpose of this study was to determine whether there is an influence of asymmetric information and earnings management on cost of equity. The total samples on this research are 241 that are determined using the purposive sampling method at manufacturing companies listed on the Indonesia stock exchange in 2015 to 2017. The analysis used is panel data regression. The findings indicate that asymmetric information affected the cost of equity, whereas earnings management had no effect on the cost of equity. The lack of impact from earnings management is due to the bias in investor perspectives on financial statements, where they believe the reported numbers are genuine and unaltered, without verifying whether a company employs earnings management practices or not.

Trade-off efficiency: Linking urban socioecological quality with land use efficiency from return on investment perspective

Effectively coordinating urban development and urban socioecology is crucial for achieving sustainable development goals. However, efficacious measurements and assessment frameworks in this field are still insufficient. This study proposes a novel metrics, termed trade-off efficiency, which measures the relationship between urban development and urban socioecology from a return on investment perspective. Using three major Chinese cities, Zhengzhou, Nanchang and Changsha as a case study, we initially quantified regional socioecological states, including urban heat island effect, air quality, habitat quality, and green space accessibility, at a 1 km2 grid level. We also measured regional land use efficiency at the same resolution. The super-slack-based measure model was employed to examine the trade-off efficiency. The results revealed that the regional socioecological quality, in general, exhibits an opposite spatial pattern to the land use efficiency, underscoring the practicality of quantifying the trade-off efficiency from a return on investment perspective. The trade-off efficiency, which decreases from the inside to the outside, demonstrates a similar spatial pattern as the land use efficiency, implying that urban development and urban socioecology may conform to the Environmental Kuznets Curve. The proposed framework, with its fine resolution, holds the potential to serve specific urban planning and assist decision-makers in targeting low-efficiency areas.

Research impact seen from the user side

Abstract Impact assessment research has developed theory-based approaches to trace the societal impact of scientific research. Impact assessment typically starts from the perspective of a research investment, organization, or project. Research users, non-academic actors involved in knowledge production, translation, and application, are well represented in many of these approaches. Researcher users are usually positioned as contributors to research, recipients of research outputs, or beneficiaries of research-driven outcomes. This paper argues that impact assessment would benefit from a more comprehensive understanding and analysis of research valorization processes from the user perspective. The first half of the paper reviews key impact assessment literature to identify how research users are positioned and portrayed in relation to valorization processes. In the second half of the paper, we use the results of this review to propose a set of principles to guide a systematic approach to constructing user perspectives on research impact. We suggest four concepts for operationalization of this approach. The paper concludes that the addition of a more comprehensive research user perspective on research valorization would complement and enhance existing impact assessment approaches.

The Lack of Short-term Financial Products in Hong Kong: An Empirical Analysis of Questionnaire

In Hong Kong, which is rich in financial products, short-term financial products are rare, so there are many reasons behind it that are worth exploring and verifying. The objective of this study is to examine and validate the factors contributing to this phenomenon and to make recommendations for the future of short-term financial products in Hong Kong. This study sorted out the existing opinions and completed the questionnaire by sorting out the literature, and then empirically analyzed the reasons for the lack of short-term financial products in Hong Kong by using quantitative analysis methods. The results of the study revealed that, from the perspective of investors, Hong Kong's high salary, complex operation of short-term financial products, low security of short-term financial products, high risk, and difficult to match energy costs are all important reasons for investors to choose less short-term financial products. At the same time, the low interest rate environment of Hong Kong has led investors to save less and focus more on other high-yielding financial products.

Human Capital Disclosure: A Review Article

This article aims to provide deep insight towards the basic understanding of intellectual capital disclosure specifically from the perspective of human capital disclosure. This study reviews the article and primarily focuses on a systematic review of past studies on human capital disclosure. There is a perception among potential investors that intellectual capital information shared by corporate companies is diverse in characteristics. In many developing economies, the government heavily influences corporate culture companies to abide by accounting and corporate practices in the modern world. However, from the investor perspective, the intellectual capital information tends to be net investee; therefore, their emphasis is mostly on corporate information supply. This article summarizes corporate information disclosure and provides the connection between the social, corporate and accounting practices in developing economies.

Research on the Influence of Fund Holding on Enterprise Green Innovation

Under the background of global environmental problems and the concept of green development put forward by the government, green innovation of enterprises has become an important path to achieve environmental sustainability. Based on the data of listed companies in Shanghai and Shenzhen from 2010 to 2020, this paper selects the largest fund among institutional investors to study, and explores the influence and mechanism of fund shareholding and enterprise green innovation. Through research, it is found that fund holding shares is helpful to improve the level of green innovation of enterprises. The moderating effect shows that whether there are defects in internal control have moderating effects on green innovation of enterprises. The influence mechanism shows that corporate social responsibility information disclosure can have an intermediary effect on the influence of fund ownership on corporate green innovation. This paper discusses the influence of fund ownership on enterprise green innovation from the perspective of the largest institutional investor, which supplements the literature of institutional investors and green field, and has practical significance for promoting enterprises to realize green transformation, practicing ESG concept and realizing environmental sustainable development.

Factors influencing the individual investors of Bangladesh to opt for investment in ṣukūk

PurposeThis study aims to identify the factors that influence the willingness of Bangladeshi retail investors to invest in ṣukūk.Design/methodology/approachThe authors surveyed Bangladeshi retail investors using a structured questionnaire to understand their perspectives on potential investment in ṣukūk. The authors considered the behavioral aspects of retail investors and the desired ṣukūk features to analyze the demand side. Factors and regression analyses were performed to identify the persuading factors.FindingsThe results indicate that investor awareness is a fundamental factor in potential investments in ṣukūk. Investors perceive the security represented by government and third-party guarantees as a persuasive feature of ṣukūk. The tradability and tenor of ṣukūk also affect the investment intention. Sharīʿah consciousness of the investors also plays a significant role in their investment decisions.Research limitations/implicationsOne limitation of this study is that it incorporates potential individual investors only, and precludes institutional investors. In the future, there is scope for research to explore the demand factors impacting institutional investors of ṣukūk in Bangladesh.Practical implicationsThe authors expect that the study will aid policymakers and ṣukūk issuers in crafting strategies to cater to the needs of Bangladeshi retail investors.Originality/valueThis study is the earliest research conducted in Bangladesh to determine the factors impacting the willingness of individual investors to make their potential investments in ṣukūk. To the best of the authors' knowledge, no study has analyzed the desired ṣukūk features from the perspective of Bangladeshi retail investors.

How intuition works in venture investment: the holistic effect on decision making

ABSTRACT To investigate into the cognitive perspective of venture investment, we performed a field experiment to explore the features and the effectiveness of the intuitive and analytic cognitive modes in the investment decision process. The results showed that intuitive investors care more about the business plan and benefit from the balanced and integrated consideration of both business plan and the entrepreneurial team to make more effective investment decision. The study’s contributions to multiple topics and future directions are discussed.

Predictive power of economic-based performance indicators on shareholder value: Evidence from South African listed firms

Financial statements are often number intensive, and determining the importance and relevance of these numbers from the perspective of investors and equity holders is paramount. However, empirical studies concerning the correlation between several accounting and economic-based indicators with shareholder returns have yielded contradictory results. Additionally, considering the relatively limited studies on economic-based indicators such as refined economic value-added and economic value-added momentum, this study evaluated the predictive power of refined economic value added, economic value-added momentum, and economic value added (economic-based indicators), along with traditional accounting-based indicators such as return on equity and earnings per share on the shareholders' returns. The study employed fixed-effect instrumental variable regression and panel quantile regression techniques to examine 49 non-financial companies listed on the Johannesburg Stock Exchange from 2007 to 2021. Overall, the results showed that economic value added is a significant negative predictor of shareholder returns, while refined economic value-added is a positive determinant. In addition, the refined economic value-added coefficient remains positive, with the impact increasing across the conditional quantiles. This study concludes that refined economic value-added provides a superior and realistic determinant of shareholder value on the Johannesburg Stock Exchange compared to other measures.