Limited Investment Opportunities Research Articles

Impact of Financial Risk and Macro-Economic Variable on Stock Return: Evidence from Commercial Banks of Nepal

This paper examines the impact of financial risks and macroeconomic variables on the stock returns of commercial banks in Nepal. The study focuses on four main types of financial risks: credit risk, market risk, capital risk, and liquidity risk, alongside bank size, return on assets (ROA), and dummy variables for COVID-19 and earthquake impacts. Additional macroeconomic variables include economic growth, inflation, and interest rates. Using panel data regression on yearly data over 11 years for 20 commercial banks, the study investigates these factors' causal impacts on stock returns. The findings indicated that capital risk and liquidity risk negatively affect stock returns, suggesting that higher capital adequacy ratios limit high-risk, high-return investments, and higher liquidity risks lead to financial instability. Credit risk and market risk, however, did not impact stock returns. Larger banks faced negative stock returns, likely due to management complexities and inefficiencies. Economic growth and inflation positively impacted stock returns, reflecting economic optimism and increased activities, while higher interest rates negatively affected returns by increasing borrowing costs. The COVID-19 pandemic had a positive impact due to increased stock market activity amid limited investment opportunities, whereas the 2015 earthquake negatively affected returns as efforts focused on rebuilding. These insights underscore the need for robust risk management and consideration of broader economic conditions in investment and policy decisions.

Managerial sentiment and employment

Recent research shows that managers, much like investors, are prone to sentiment. In this paper, we study the effect of managerial sentiment on firms’ operations both theoretically and empirically. Consistent with our model’s predictions, we find that high managerial sentiment increases employment growth, especially among firms with limited investment opportunities and regardless of their cash resources. We also show that high managerial sentiment offsets the negative effect of low investor sentiment and bad governance on employment, but ultimately leads to lower labor productivity. Overall, the findings unveil a new channel through which optimistic managers affect firms’ operations.

Threat or opportunity? Unveiling the impact of population aging on corporate labor investment efficiency

This study examines the impact of population aging on labor investment efficiency in Chinese listed firms from 2009 to 2020. Our main findings reveal that aging can positively influence labor investment efficiency, particularly in firms with labor redundancies such as state-owned enterprises, those with labor unions, high labor costs, and financial constraints. The positive effect is lessened in regions with abundant human capital, within the manufacturing sector, and labor-intensive industries. The results show that improvements in labor efficiency are distinct from changes in capital investment efficiency, indicating no general rebalancing of resources due to demographic shifts. Firms with limited investment opportunities and under strict external monitoring benefit more from an aging workforce. Overall, our findings suggest that an aging population can offer opportunities for firms to enhance labor investment efficiency, challenging the conventional view of population aging as solely a threat.

Regulatory challenge of the license and permission for energy industry operation on renewable energy growth in Thailand

This research explores the implementation of streamlined licensing frameworks and consolidated procedures for promoting renewable energy generation worldwide. An in-depth analysis of the challenges faced by renewable energy developers and the corresponding solutions was identified through a series of industry interviews. The study aims to shed light on the key barriers encountered during project development and implementation, as well as the strategies employed to overcome these obstacles. By conducting interviews with professionals from the renewable energy sector, the research uncovers a range of common challenges, including complex permitting processes, regulatory uncertainties, grid integration issues, and financial barriers. These challenges often lead to project delays, increased costs, and limited investment opportunities, thereby hindering the growth of renewable energy generation. However, the interviews also reveal various solutions and best practices employed by industry stakeholders to address these challenges effectively. These solutions encompass the implementation of streamlined licensing procedures, such as single licenses and one-stop services, to simplify and expedite the permitting process. Additionally, the development of clear and stable regulatory frameworks, collaboration between public and private entities, and improved grid infrastructure were identified as key strategies to overcome regulatory and grid integration challenges. The research findings highlight the importance of collaborative efforts between policymakers, industry players, and other relevant stakeholders to create an enabling environment for renewable energy development. By incorporating the identified solutions and best practices, policymakers can streamline regulatory processes, foster public-private partnerships, and enhance grid infrastructure, thus catalyzing the growth of renewable energy projects.

The role of digitalization in agricultural cooperatives successful functioning

Relevance. The widespread use of digital opportunities by modern cooperatives in their multifunctional activities is of genuine interest to both scientists and practitioners, in connection with which there are noteworthy scientific publications and analytical (coming from the cooperators themselves) reviews. It is important that cooperative organizations, both small, important for the regional economy, and large, business-oriented, use digital solutions not only to increase their competitiveness (for purely economic purposes), but also to overcome social and environmental problems that arise in rural areas due to biological, climatic and geopolitical challenges.Methods. To achieve the goal outlined in the work (identifying the potential of digitalization in ensuring high performance of cooperatives and, through their activities, sustainable development of rural areas), review and analytical methods based on a rigorous study of the results of theoretical research and reporting materials of large cooperatives were applied. having official websites and publishing their strategic and reporting documents on them. The analysis, primarily from the standpoint of the suitability of international experience for domestic practice, was subject to the information of the International Cooperative Alliance (International Cooperative Alliance, ICA), reflecting the positive practices of digitalization of cooperative activities in various countries of the world, as well as the difficulties faced by agricultural cooperatives in the new (digital) environment. The basis for empirical research and, consequently, for the application of quantitative methods in them was the generalized materials of sociological surveys organized within the boundaries of the subjects of the Ural Federal District, mainly in the Sverdlovsk Region.Results. The main results of the study include the specification of aspects of cooperative activity obtained in its process, in which digitalization is especially important and promising, as well as those that are preferable for implementation in the previous (traditional for cooperatives) forms. Of no less importance is the designation of the main problems and difficulties that stand in the way of creating a full-fledged digital space directly for agricultural cooperatives as a result of the peculiarities of agricultural production, the specifics of the conditions of rural life, the uniqueness of rural areas (their position and characteristics). As such, they noted, firstly, the limited investment opportunities of cooperatives in the creation and development of digital infrastructure facilities in the countryside, secondly, the digital divide (different preparation of villagers for the use of digital technologies), thirdly, some contradictions between modern (digital) formats of cooperative activities and the classical principles of its organization.

Evaluating the Performance of Jordanian Islamic Banks Using SWOT

The study aimed to evaluate the performance of Jordanian Islamic banks using SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The sample included all Jordanian Islamic banks. The study adopted a descriptive and analytical approach, starting with an analysis of the internal and external banking environment, as well as the legislative environment. It also analyzed the intellectual and financial performance indicators. The study found several strengths, including uniqueness in its adherence to Islamic principles, high profitability and liquidity levels, and low risk levels. On the other hand, it identified weaknesses such as deviating from its foundational principles, limited investment diversification, weak external presence, and insufficient contribution to economic development. Furthermore, the study highlighted opportunities, such as the possibility of increasing profitability, enhancing investment diversification, exploiting national investment opportunities, and improving international presence. It also identified threats, such as limited investment opportunities, the need for developing Sharia-compliant banking products, and the importance of improving service quality. The study recommended that Islamic banks address weaknesses, enhance strengths, capitalize on available opportunities, and proactively address expected threats.

From Marxist Venture to Venture Capitalists: The Swedish Wage-Earner Funds and the Market Turn, 1983–1994

A renewed political interest in profit sharing and employee codetermination prompts an analysis of the Swedish wage-earner funds, implemented by a Social Democratic government in 1983 and dismantled by a center-right government in 1991. This article explains the funds’ financial performance and the political decisions surrounding their dismantlement. It finds that the funds underperformed slightly in relation to financial targets. Reasons include inexperienced boards, limited investment opportunities, and a hostile attitude from the business community. For the center-right parties, getting rid of the funds was an ideological decision. Transferring the assets to research foundations and public venture capital funds would improve the business climate, compensate firms for taxes paid to finance the wage-earner funds, and ensure that the Social Democrats would not be able to reinstate the funds. The intense debate surrounding the wage-earner funds, their implementation, how they functioned in practice, and their dismantlement clearly contributed to Sweden’s sharp market turn in the 1980s and 1990s.

Механизмы и инструменты управления развитием логистической инфраструктуры морских портов Каспийского региона

Development of the logistics infrastructure of the seaports in the Caspian region is conditioned by their geographical location in the south of Russia and by high transit potential on the Trans-Caspian route of the international transport corridor North-South. The lack of inter-organizational coordination, as well as the limited investment opportunities of sea terminal operators do not allow to compete with the transnational transport and logistics companies engaged in foreign trade transportation along the vectors “West-East” and “North-South”. Increasing the competitiveness of the seaport logistics operators in the Caspian region can be possible as a result of the development of a mechanism that coordinates the interaction of transport and logistics services market entities and the state based on the centralization of logistics infrastructure development management functions at the macro-, meso- and micro levels. The subjects of management are defined: a single operator at the federal level, an information and analytical center of the port special economic zone of the Astrakhan region at the regional level and a logistics coordinator as a structural subdivision of a Single operator in seaports. Management technologies and tools are presented, management objects at each level are specified. The business process “management of the centered logistics system of the seaport” has been developed to coordinate interactions with the allocation of the subprocess “management of logistics infrastructure development projects”, which allows regulating the sequence and content of subprocesses, implementation tools, incoming and outgoing information flows. The operation of the interaction mechanisms between the entities managing the development of the seaport logistics infrastructure in the Caspian region is illustrated.

MECHANISMS FOR THE DEVELOPMENT OF RESTAURANT SERVICES IN THE ODESSA REGION

Topicality. Restaurant industry is one of the activities designed to provide catering services for organizing leisure activities (if necessary). The global and Ukrainian restaurant business is developing rapidly, the competition for visitors is increasing and the mechanisms of its promotion are changing. This factor forces restaurateurs to pay more and more attention to marketing strategies, the style of the enterprise and the individual details that give the establishments uniqueness and originality. Aim and tasks - to assess the state of the restaurant industry development of the Odessa region, to identify its strengths and weaknesses, to offer marketing strategies and mechanisms for further promotion of services. Research results. The pace of the restaurant industry development always depends on the dynamics of the country's population income growth. So far, the country's population is not highly capable. The main contingent of clients are tourists and young people. Young people give preference to eating out. In the Odessa region, the number of enterprises whose activities include the provision of food and drinks in 2019 amounted to 488 units. They employed 3478 people. The volume of products sold by enterprises whose activities include the provision of food and drinks in 2019 amounted to more than one billion hrn. The main weaknesses of the region's restaurant industry are: the actual decline in the population's income; narrow specialization of some institutions; lack of funds to finance innovations; the prices for some signature dishes are too high; lack of a well-functioning system of discounts and bonuses; staff turnover of waiters. Strengths are: interesting proposals in the menu; stylish design; the ability to order food home or to the office; availability of a constant base of corporate clients. Potential abilities are spread due to: a logically built organizational structure of the company; competition as an incentive for development, expansion of the range of services; improving marketing and management, both internal and external; the emergence of new technologies; change of advertising technologies. The list of the main threats boils down to the deterioration of the economic and political situation in Ukraine; decline in the purchasing power of Ukrainians; limited investment opportunities, low reinvestment rates. Conclusion. The catering market in the Odessa region could develop even more dynamically, if not for the impact of some negative factors. The main are the high rental rates for premises and the still low solvency level of the majority of potential clients. This makes it difficult for new establishments to stay in the market, and many of them close within a year or two. The main factors influencing consumer preferences in the catering market are: taste of dishes; territorial availability of the institution; the opportunity to buy food to go; reputation of the restaurant; price. Innovative options for the promotion mechanisms for the restaurant industry in the region can be: �fast and random� format, �home cooking�, theme parties, PR-parties, bonus systems, new entertainment services.

Are zombie firms more incentivized to financialize?

This paper investigates whether zombie firms demonstrate a tendency to invest in the financial sector, a practice we term financialization strategy. Unlike those in the United States, Japan, and Europe, we find that zombie firms in China are not necessarily small and that they rely heavily on government subsidies in addition to bank loans for survival. In addition, we document that zombie firms in China experience limited investment opportunities in their core businesses. This combination of readily available funding and limited investment opportunities jointly motivate the financialization of firms with zombie status. We further find that financialization is preferred by non-state-owned firms and by those located in regions with less developed markets. Finally, we suggest that a contagion effect can occur in terms of financialization in provinces that have a high percentage of zombie firms. This research sheds light on the effects of a triangular relationship among firms, government agencies, and financial institutions on both the operations of individual firms and overall market efficiency.

Organizing a portfolio of projects to ensure the required energy efficiency

The subject of this paper is the study of the use in practice of the components of the project portfolio in optimal condition. An important issue in the study of this project is the evaluation of the effectiveness of these components. Attention is paid to the portfolio of projects where it is possible to carry out continuous restructuring in accordance with the limited investment opportunities. The authors have developed energy-efficient methods of project management and control at all stages of construction. The role of the utility function in the formation of the investment portfolio is also considered. A model for calculating the indicators of the project portfolio is developed on the example of building a network of banks in Russia. This model allows you to avoid financial losses, evaluate your activities, and improve the efficiency and effectiveness of projects.

Public investment and inclusive growth in Africa

PurposeThe increasing debate on the viability of broad-based productive employment in stimulating the participatory tendencies of growth makes it instructive to inquire how the African “Big Five” have fared in their quests to ensure growth inclusiveness through public investment-led fiscal policy.Design/methodology/approachTime varying structures and nonlinearities in the government investment series are captured through the non-linear autoregressive distributed lag, asymmetric impulse responses and variance decomposition estimation techniques.FindingsStudy findings show that positive investment shocks stimulate growth inclusiveness by enabling access to opportunities through job creation and productive employment for the populace; this result is evident for Morocco and Algeria. However, there is a non-negligible evidence that shocks due to decline in the government investment manifest in insufficient capital stocks and limited investment opportunities, impede access to opportunities by the populace, hinder labour employability and make growth less inclusive. Furthermore, all short-run findings corroborate long-run results regarding the reaction of inclusive growth to positive investment shocks with the exclusion of South Africa; which, unlike its long-run finding, shows that shocks due to increases in investment can foster growth inclusiveness. Also, in respect to short-run negative investment shocks, Nigeria is the only country that does not align its long-run findings.Practical implicationsThat public investment shocks make or mar inclusive growth effectiveness shows the need for appropriate fiscal policy consolidation and automatic stabilization guidelines to ensure buffers against shocks and to enhance government investment generation efficiency for a sustainable inclusive growth process that is more participatory in Africa.Originality/valueThis study is the first to accommodate possibilities of shocks in the inclusivity of growth analysis for the five biggest African economies which jointly account for over half of the recorded growth in the continent. As such, there is quantitative evidence that government investment is a potent determinant of growth inclusiveness and it is susceptible to structural changes and time variation of shocks.

Transaction Costs, Portfolio Characteristics, and Mutual Fund Performance

We study the interdependencies between transaction costs, portfolio characteristics, and mutual fund performance. Using a novel data set of actual mutual fund trades, we find that, controlling for investment style, larger funds realize lower percentage transaction costs than smaller funds. Larger mutual funds trade less frequently and hold bigger stocks to actively avoid incurring higher trading costs. Gross returns of larger funds are lower than those of smaller funds due, in part, to the characteristics of their holdings, which suggests that decreasing returns to scale could arise due to limited investment opportunities because of trading cost constraints. Taken together, our results highlight the trade-offs faced by mutual funds between trading costs, portfolio characteristics, and fund performance as they grow in size. This paper was accepted by Karl Diether, finance.

Impacts of land use intensification on human wellbeing: Evidence from rural Mozambique

Intensifying land use is often seen as a corollary of improving rural livelihoods in developing countries. However, land use intensification (LUI) frequently has unintended impacts on ecosystem services (ES), which may undermine the livelihoods of the same people who could benefit from intensification. Poorer households are disproportionately dependent on ES, so inequalities may also rise. A disaggregated analysis of LUI is thus fundamental to better understand how LUI can progress in an equitable manner. Using a suite of multi-scale, multidisciplinary social-ecological methods and operationalising multidimensional concepts of land use intensity and wellbeing, we examine three case studies in rural Mozambique. Drawing on interviews, focus group discussions, 1576 household surveys and geospatial data from 27 Mozambican villages, we assess how wellbeing and inequality change with three common LUI pathways: transitions to smallholder commercial crop production, charcoal production, and subsistence expansion. Wellbeing improved with intensification of smallholder commercial and subsistence agriculture, inequality did not change. Unsustainable intensification of charcoal production showed no overall effect on either wellbeing or inequality. Improvements in wellbeing amongst the poorest households were only found with intensification of commercial crop production, where villages had better access to markets. Our findings suggest that socioeconomic benefits from agricultural intensification and expansion may overcome localised environmental trade-offs, at least in the short term. However, unsustainable charcoal resource management and limited productive investment opportunities for rural households resulted in both reduced market access and limited wellbeing improvements. Sustainable and inclusive markets are therefore crucial developments alongside LUI to sustain wellbeing improvements for all households, to ensure that no one is left behind.

Challenges and Perspectives of Development of Private Pension Funds in Serbia

Following the successful implementation of the Chilean reform, the World Bank proposed a solution from three pillars of the pension system: compulsory state, compulsory private and voluntary private pension insurance. Serbia, like many other developed and undeveloped countries, has only adopted the third pillar, in addition to the already existing state. The introduction of compulsory private insurance was also considered, however, there are no market conditions or financial possibilities for achieving this idea. Voluntary pension funds in Serbia were introduced by the 2005 laws. There are seven voluntary pension funds in Serbia, managed by four management companies. So far, the funds have achieved positive yields, although due to limited investment opportunities, these rates were very modest. In addition to limited investment opportunities, one of the problems is the accumulation of funds. The problem of population savings has many sides, and it is certain that some of the causes can be sought in bad experiences from the past. The paper analyzes the limitations and possibilities for further development of private pension funds.

Multiple directorships and the value of cash holdings

This study examines the impact of multiple directorships on the value destruction associated with increases in cash holdings. We find that the marginal value of cash increases with multiple directorships. Furthermore, the positive relationship between cash value and multiple directorships is more pronounced for firms with higher managerial agency problems. Additional analyses suggest that multi-board directors limit a firm’s holdings of excess cash, and especially directors having current industry affiliations have better ability to perform their monitoring function. Firms with multi-board directors make better cash acquisitions. Multiple directorships improve subsequent operating performance associated with capital expenditures and R&D investments. When firms have limited investment opportunities, multiple directorships result in more dividend payouts of cash. Collectively, our results suggest that multiple directorships are associated with a more efficient use of cash, thereby providing direct benefits to shareholders.

Assessment of the Competitiveness of Economic Activities of the Region in Terms of Employment

In the context of limited investment opportunities, it becomes important to study the competitiveness of economic activities, which represents one of the essential components of the study of the relations at the labour market, and also serves as an important reference point for the formation of regional economic policy and the strategies of business communities. In the article the authors describe the methodology of complex statistical assessment of prospectivity and competitiveness of the economic activities of the region, based on using the method of shift-components together with the coefficient of localization. This approach allows identifying the level (district, industrial or regional) at which the factors, determining the dynamics of the regional employment structure by economic activities, and consequently the level, at which the control actions should be focused to prevent destructive changes. The application of the suggested method was carried out for the Mari El Republic. As a result, the dynamics of employment of the region was traced in comparison to the Volga Federal District, and the key causes of changes in the employment structure were determined for economic activities. The activities, which the region specializes in, were identified. The method allowed defining the areas of economic development of the Mari El Republic and formulating the probability scenarios of economic development for the activities of various competitiveness levels. The versatility of the proposed methodological tools and their correspondence to the intended function substantiate the lawfulness of their use by other regions of both the Volga Federal District and the Russian Federation. DOI: 10.5901/mjss.2015.v6n3s7p119

Anglo-American versus Asian Corporate Governance Environments

Anglo-American versus Asian Corporate Governance Environments

The Life Cycle of Hedge Funds: Fund Flows, Size, Competition, and Performance

This paper analyzes the life cycles of hedge funds. Using the Lipper TASS database it provides category and fund specific factors that affect the survival probability of hedge funds. The findings show that in general, investors chasing individual fund performance, thus increasing fund flows, decrease probabilities of hedge funds liquidating. However, if investors chase a category of hedge funds that has performed well (favorably positioned), then the probability of hedge funds liquidating in this category increases. We interpret this finding as a result of competition among hedge funds in a category. As competition increases, marginal funds are more likely to be liquidated than funds that deliver superior risk-adjusted returns. We also find that there is a concave relationship between performance and lagged assets under management. The implication of this study is that an optimal asset size can be obtained by balancing out the effects of past returns, fund flows, competition, market impact, and favorable category positioning that are modeled in the paper. Hedge funds in capacity constrained and illiquid categories are subject to high market impact, have limited investment opportunities, and are likely to exhibit an optimal size behavior.

Expanding opportunities: Strategic buying of utilities in new EU member states

During the 1990s, limited investment opportunities in Western Europe, the opening of the energy markets in Eastern Europe, and the future expansion of the European Union (EU) prompted an expansionist strategy by energy companies from the original EU member states. In this paper, the acquisition and divestiture activities and strategies of utilities from France and Germany are analyzed in the context of the 2004 and 2007 EU enlargements. Through quantitative and qualitative data analysis, including the development of two case studies, the strategy for expansion and evolution in new member states is examined. The results demonstrate a concerted effort to establish economies of scale through ownership of distribution companies. A change in strategy occurs as these privatization opportunities disappear. Generation and trading activity become the growth area for these companies as electricity supply becomes another factor that can contribute to the economies of scale. Recent EU-supported efforts towards regionalization of electricity markets, positions these companies well due to their strong regional presence. This paper will explore these issues in the context of ownership and geographic distribution.