Investment Perspective Research Articles

Political uncertainty and institutional herding

Political uncertainty represents a key determinant of corporate investment decisions. In this paper, we study the relation between political uncertainty and investment from the perspective of institutional investors. Using U.S. equity holdings data from 13F filings, we find that institutional investors herd during politically uncertain times. This trading behavior is stronger when U.S. presidents are unpopular, due to their proclivity for controversial policies, and among riskier stocks. We also find that this mechanism, despite generating some excess trading, helps incorporate a risk premium into stock prices. Overall, the findings unveil a new channel through which political uncertainty affects financial markets.

How do investors value the publication of tax information? Evidence from the European public country‐by‐country reporting

AbstractWe examine the costs associated with public disclosure, as opposed to confidential reporting, of tax country‐by‐country reporting (CbCR) information. Our study addresses a critical knowledge gap, considering the growing adoption of public tax transparency measures. We aim to illuminate this matter by examining the expected costs for firms of making previously confidential CbCR information publicly available. The fact that the information was previously confidentially reported to the tax authorities allows us to assess the cost of publication in isolation. Employing an event study methodology, we provide early evidence on the capital market reaction to this new requirement on a sample of European firms falling within its scope. We document a significantly negative cumulative average abnormal return of EUR 47 billion to 64 billion for up to 3 days following the announcement. Additional cross‐sectional results suggest that concerns about the reputational costs arising from public scrutiny and the proprietary costs from disclosing sensitive business information outweigh the potential benefits of an extended information environment from an investor perspective. Our findings highlight that the public disclosure of tax information imposes significant—and likely unintended—costs from a firm perspective. This aspect should be carefully considered when developing tax transparency measures.

Mamaearth IPO: the pricing dilemma of a startup

Learning outcomes After working through the case and assignment questions, students will be able to recognize essential considerations for the initial public offerings (IPO) decision, compare different types of fundraising options for startups, evaluate the free pricing regime for IPO pricing, examine the pricing process of IPOs, explore the issue of valuation of IPOs and assess the decision choices of the founder regarding IPO given the trade-offs and market conditions. Case overview/synopsis The case study explores the dilemma of Ghazal Alagh, the co-founder and chief innovation officer of Mamaearth, a direct-to-consumer babycare and skincare unicorn, regarding its IPO decision. Mamaearth had filed the draft offer document with SEBI in December 2022, and Ghazal was busy engaging with the investment bankers for the upcoming IPO. However, the weak market sentiments and shelving of IPO plans by many startups were forcing her to think about facing the possibility of postponing the IPO or continuing the IPO process but at lower valuations. The case study provides an opportunity to explore a startup’s financing choices. It allows for discussion of various IPO challenges from the perspectives of founders, venture investors, regulators, investment bankers and new IPO investors. Complexity academic level This case study is best suited for senior undergraduate- and graduate-level business school students in courses focusing on entrepreneurship, corporate finance, financial management, strategic management and investment banking. Subject code CSS1: Accounting and finance. Supplementary materials Teaching notes are available for educators only.

Challenges and Prospects of Establishing Accounting Treatment Standards for Digital Currency

Digital Currency have emerged as a disruptive force in the financial world, challenging traditional accounting practices and regulatory frameworks. This study examines the challenges and prospects for establishing accounting standards for Digital Currency. Initially conceived as a secure medium of exchange, Digital Currency have evolved into assets that can be exchanged for goods or services. However, their dual role as currencies and commodities presents a classification dilemma. Current accounting standards primarily classify Digital Currency as intangible assets, but their rapid appreciation renders historical cost measurement ineffective. Adopting fair value measurement emerges as an optimal solution, but practical hurdles remain. Through insights from existing literature and analysis, this study optimizes accounting approaches for Digital Currency, addressing challenges such as asset valuation, regulatory inconsistencies, diverse investor perspectives, and legal uncertainties. Establishing standardized and transparent accounting practices tailored to Digital Currency is critical to ensuring transparency, consistency, and reliability in financial reporting.

Research on the Impact of Digital Investment on Green Performance of Listed Enterprises

Based on the data of Chinese listed enterprises from 2017 to 2022, this paper examines the impact of digital investment on the green performance of listed enterprises. The study found that digital investment is negatively correlated with the green performance of listed enterprises, which is still valid after the robustness test. According to the heterogeneity analysis, digital investment has a more significant negative effect on the green performance of state-owned enterprises. The research conclusions not only reveal environmental effects of digital investment, but also broaden the research perspective of digital investment and corporate green performance, which has vital enlightening significance for the government to promote the construction of the ecological civilization and enterprises to improve green performance.

Ageless Assets: Social Investment and Active Aging Profiles in Lithuania

This article argues that the aging population significantly affects the welfare state. Social investment strategies could respond to a changed economic and social order by enhancing active aging. While the social investment perspective has been a topic of discussion for decades, certain aspects remain underexplored. This study, therefore, aims to assess the impact of social investments on active aging. The study, based on the social investment approach and active aging model, analyzes quantitative data from Wave 8 of the Survey of Health, Ageing and Retirement in Europe (SHARE). The Lithuania sample included 1437 participants. In the analytical phase, Principal Component Analysis and Cluster Analysis were utilized (SPSS ver. 26). The findings unveil four active aging profiles (low activity, moderate activity, balanced activity, and high activity). The two groups are distinguished by aging conditions, such as poor health, lack of social investment, and high reliance on social benefits. The positive impact of social investment is underscored by the improved aging conditions outlined in the last two profiles. This study enriches the social investment research domain by providing valuable insights into the influence of social investment policies on the lives of older individuals and their potential to age actively.

Financial Year and Calendar Year Effects Across Indian Sectors: A Revisit from Investors Perspective

Anomalies in stock markets have been studied with varied approaches worldwide, and mixed outcomes exist. The present study has investigated the financial year and calendar year effect for indices from Indian markets. Sectoral indices from Indian markets have been incorporated in this study on the basis of their weightage in the stock market. Data from 2011 to 2023 have been engaged with historical prices of these indices taken from the stock exchange websites. The analysis has been carried out using the ordinary least squares regression method and the independent sample t-test. Weak anomalies have been documented in the case of the financial services sector. Therefore, the findings indicate rare possibilities for investors to gauge abnormal returns with strategies related to anomalies. With increasing transparency in the online trading mechanism, such possibilities cease to exist for investors. Moreover, market dynamics have transformed on account of several shocks such as COVID-19, Omicron, Russia–Ukraine, Visa-related international issues in the world over economies and financial markets. Investors and markets have become more cautious and look out for a precautionary approach while dealing in stock market trading.

Connectedness at extremes between real estate tokens and real estate stocks

We test the interconnectedness between returns on real estate (RE) crypto tokens and on RE stocks using a quantile vector autoregression (QVAR) methodology. Our main findings show that there is a strong dependence between RE tokens and RE stocks in the distributions of returns in the top and bottom quantiles, and a rather weaker correlation in the median quantile. From an investment perspective, the findings demonstrate that, contrary to the usual focus on the center of the general distribution of returns, RE tokens and RE stocks correlate most strongly at the tails of the distributions. For this reason, diversification benefits may be limited, and careful risk management and investment strategies should be employed to navigate this strong tail connection. Considering the limited diversification benefits at the extremes, investors should exercise caution and allocate resources to mitigate potential losses when RE crypto tokens and RE stocks experience extreme market movements.

ЗАРУБІЖНИЙ ДОСВІД КОРПОРАТИВНОЇ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ

In today's dynamic business landscape, the concept of social responsibility has gained prominence, prompting enterprises to reassess their roles and responsibilities in society. This article undertakes a thorough examination of the definitions of social responsibility proposed by a multitude of authors and scholars. By synthesizing these perspectives, we aim to provide a nuanced understanding that guides enterprises in their pursuit of ethical, sustainable, and socially impactful practices.The primary objective is to comprehensively investigate the relationship between Corporate Social Responsibility (CSR) initiatives and business performance across various industries and geographic regions. Specifically, the article aims to achieve the following: Analyze the Effectiveness of CSR Practices: The article seeks to assess the effectiveness of different CSR initiatives undertaken by businesses. Measure Financial and Non-Financial Performance Metrics: The study will evaluate the impact of CSR initiatives on both financial performance indicators (e.g., revenue, profitability, stock performance) and non-financial metrics (e.g., brand reputation, customer loyalty, employee satisfaction). Assess Stakeholder Perceptions and Expectations: Understanding the perspectives of key stakeholders, including consumers, investors, employees, and regulatory bodies, is crucial in evaluating the effectiveness of CSR initiatives. Explore Industry and Regional Differences: Business environments vary significantly across industries and geographic regions, leading to diverse approaches to CSR adoption and implementation. Identify Opportunities and Challenges: examine the challenges and limitations associated with CSR implementation. This article provides actionable insights for businesses to leverage CSR initiatives effectively. By aligning CSR practices with stakeholder expectations, leveraging industry insights, and addressing associated challenges, companies can foster sustainable business practices. This not only optimizes business performance but also contributes positively to society. Integrating CSR into corporate strategies emerges as imperative for driving long-term success and societal impact, highlighting the importance of responsible business practices in today's dynamic landscape.

Islamic Perspective of Gold-Based Investment: The Case of Indonesia

Currently, there are many gold-based investment products, and investors are interested because some of them use sharia labels. Therefore, this study aims to identify and investigate gold-based investments from an Islamic perspective. It is hoped that this research can contribute new findings and enrich existing literature regarding gold investment in Indonesia, providing benefits for Muslim investors and the Muslim community in general. This study used qualitative research methods. Semi-structured interviews were conducted with parties who offer gold-based investment products on a large scale. Additional data sources include documents and manuscripts from the National Sharia Council (DSN-MUI) as well as author analysis. These findings show that not all gold-based investments in Indonesia comply with sharia principles. Only gold murabahah conducted by Islamic banking institutions meets sharia compliance.

Teachers’ perceptions of challenges in digital multimodal composing with newcomer adolescent students from refugee backgrounds

Research has shown ways in which digital multimodal composing (DMC), defined as the use of digital tools to make meaning with multiple modes (e.g. languages, visuals, sounds, gestures), including video production, can empower adolescent newcomers from refugee backgrounds in school settings. However, few studies have examined teachers’ challenges with these pedagogies, particularly involving ­refugee-background learners, some of whom may have experienced ­significantly interrupted formal education. Comprehensively understanding teachers’ perceived challenges with pedagogies involving DMC to help meet these learners’ needs is a particularly urgent objective in Canada, which is increasingly committing to refugee resettlement. This qualitative case study explored teachers’ perceived challenges in DMC with newcomer adolescent students from refugee backgrounds in a secondary school setting. Guided by a multimodal approach to literacy and an identity investment perspective on participation in learning, reflexive thematic analysis led to the identification of the following teacher challenges: navigating expectations and required scaffolding, mitigating risks associated with difficult knowledge, and students’ ‘cloak of invisibility’. The study contributes an in-depth discussion of these patterns, including possible implications, to better empower educators and teacher educators to address the needs of adolescent newcomer learners from refugee backgrounds in an increasingly complex language and literacy landscape.

Investor perspective on impact-driven startups – the prioritization of certainty

PurposeIn this study, the authors dive into the assessment process of startups by impact investors. In particular, the purpose of this study is to investigate the preferences impact investors place on different social and environmental criteria. The authors build on social learning theory to understand the underlying rationale of the investors.Design/methodology/approachWith this research, the authors simplify the impact category system by conducting a systematic literature review. The authors then validate these criteria with a survey of 69 impact investors in Europe.FindingsThe results highlight the prioritization of quantifying impact and a discrepancy between essential and desirable impact categories. Due to the clear and significant results changing with the target market and startup stage focus, the authors assume a tendency of homophily of impact investors.Originality/valueWith this empirical study, the authors offer strategic implications for investors and startups as the authors decrease the complexity of impact categories while validating their significance in the impact assessment process.

Памятные и инвестиционные монеты, посвященные Северу: исторический и экономический аспекты (обзор)

This article offers an overview of commemorative and bullion coins dedicated to the North, grouping thematic coins from the past 30 years. It analyzes various aspects, including historical, economic, and investment perspectives. The authors review noteworthy commemorative coins made of precious metals by the Bank of Russia. These coins honor the cultural heritage, landmarks, notable figures of Northern exploration, and the region's flora and fauna. Specifically, coins such as "Exploration of the Russian Arctic," "International Polar Year," and "Let's Save Our World" are examined. The article evaluates the role of monetary policy in the Russian economy, particularly its anti-inflationary objective. A brief historical overview is provided regarding the first Soviet banknotes featuring Northern views and their circulation. In addition to Russian practices, the article showcases international experiences in issuing commemorative coins dedicated to exploring the North. The relevance of this study lies in the Bank of Russia's emission activities regarding commemorative coins made of precious and base metals, as well as investment coins made of precious metals, both domestically and internationally. The study's findings set the stage for further exploration of new thematic coins, including an assessment of numismatic and investment demand prospects.

Portfolio management under capital market frictions: a grey clustering approach

International portfolio management is influenced by the existence of “frictions”, factors or events that interfere with trade, which are linked in financial literature to market-specific factors, such as available information, restrictions, investor protection, or market liquidity. Given the wide variety of factors that can be included in these categories, scientific studies typically focus on a reduced number of indicators at a time in order to offer an in depth analysis of their impact. We offer a consolidated view of the perspectives observed in financial literature by proposing a novel index for market frictions that includes all these four components and rank fifteen post-communist East European capital markets based on their index values. We then constructed various scenarios by assuming different levels of importance for the criteria used in index construction. By employing grey clustering analysis, we cluster these capital markets into three categories—strongly recommended, recommended with some reserve, and not recommended—based on the importance given by the decision maker to these factors. The results show that some of the studied markets are in the same cluster, irrespective of the chosen scenario. The only market always included in the “strongly recommended” category is Hungary, indicating that it is a good investment option for international participants. Bulgaria and Slovakia are always regarded as “recommended with reserve” markets, whereas the Republic of Moldova is part of the “not recommended” category. The other markets show a degree of variability that can be explained by different investor perspectives. This study contributes to the existing literature by combining the advantages of grey clustering and portfolio analysis. Investors can use this approach during the decision-making process related to their investments.

The Impact of Relationship Marketing Dimensions on Financial Indicators of Stock Exchange Market Companies

Successful businesses use a variety of tactics to accomplish their objectives, one of which is relationship management with investors and shareholders. Their best application in today’s business world is a long-term competitive advantage. One of the ways to create and retain this relationship is to use relationship marketing (RM). Various dimensions shape RM, which can be different in industries and markets. This paper aims to identify the effective RM dimensions in the capital market and examine the impact of these dimensions on the financial indicators of the capital market, which are important from both the perspectives of companies and investors, including stock liquidity, stock return, and capital cost. To identify the key dimensions, ranking based on their importance has been done using the analytic hierarchy process (AHP) method. A multivariable linear regression model has been employed to test the research hypotheses. Stock companies have been selected based on the screening method from the companies admitted to the Tehran Stock Exchange from 2019 to 2022. Based on the findings, it can be concluded that the coordinated management of various aspects of RM has the potential to enhance liquidity and stock returns while simultaneously reducing the cost of capital. Given the significance of these indicators, particularly in developing economies like the Iranian capital market, companies can leverage RM strategies in their interactions with shareholders to improve market conditions.

Long-Term Stock Market Risks and Returns: Insights from the Perspective of a Global EUR Investor

Long-Term Stock Market Risks and Returns: Insights from the Perspective of a Global EUR Investor

RETHINKING CORPORATE PRIORITIES: THE SURGE OF ESG INVESTING AND GREENWASHING RISKS

ESG investing, centered on a company's environmental, social, and governance practices, has surged in popularity as businesses recognize the imperative of catering to a wider array of stakeholders beyond shareholders. Investors have transitioned from a profit-centric ethos to one that prioritizes broader societal impact. Evaluation criteria now encompass a company's commitment to ESG principles and responsible business conduct. This transformative investor perspective encourages companies to openly embrace ESG integration, particularly emphasizing environmental considerations. Nevertheless, the specter of greenwashing, where companies engage in deceptive practices to feign environmental responsibility, persists as a contentious issue in the ongoing dialogue surrounding ESG investing.

FACTORS INFLUENCING FOLLOW-ON PUBLIC OFFERING OF SHIPPNG COMPANIES FROM INVESTOR PERSPECTIVE – A HYBRID MULTIPLE-CRITERIA DECISION-MAKING APPROACH

The shipping industry transports nearly 80% of the goods worldwide and requires large funding. The shipping industry shifted from debt to equity as the source of funding in the last decade. Because most shipping companies already had their initial public offering before 2013, these companies tend to engage in follow-on equity offerings (FPO). However, the challenge faced by the shipping companies is the lack of knowledge on successful FPO. The purpose of this study is to identify the most influential factors affecting shipping companies’ FPO from the investor perspective. This research applies a hybrid multiple-criteria decision-making model integrating the fuzzy-Delphi method and Decision-Making Trial and Evaluation Laboratory, processing survey responses covering four dimensions and 16 criteria from 33 investment experts. The results show that financial indicator is the primary cause affecting offering condition, technical indicators. An increase in earnings per share would help the financial performance of the shipping companies to appear most attractive to investors.

Investments in Electricity Distribution Grids: Strategic versus Incremental Planning

The ongoing electrification of the transport sector is expected to cause an increase in electricity demand and, therefore, trigger significant network investments to accommodate it. This paper focuses on investment decision-making for electricity distribution grids and specifically on the strategic and incremental investment network planning approaches. In particular, the former involves network planning with the consideration of a long-term multi-stage study horizon, as opposed to a shorter–term view of the future that applies to the latter case. An investment analysis that is carried out underlines the economic savings generated from adopting a strategic investment perspective over an incremental one. These economic savings are achieved from the fact that the associated fixed investment costs are incurred only once in the horizon under strategic planning. On the other hand, incremental planning involves a series of network reinforcement decisions, thereby incurring the fixed cost multiple times. In addition, sensitivity analyses that are carried out capture the effect of key parameters, such as investment cost, discount rate and investment delay, on the generated economic savings.

The Golden Passport: Global Mobility for Millionaires

Dominika Langenmayr of KU Eichstatt-Ingolstadt, WU Vienna, and CESifo reviews “The Golden Passport: Global Mobility for Millionaires” by Kristin Surak. The EconLit abstract of this book begins: “Examines the global citizenship market, chronicling the emergence of golden passport schemes, investigating the countries, brokers, and wealthy investors that make up the citizenship by investment (CBI) market, and offering the perspectives of locals and investors in golden passport countries.”