Main Shareholder Research Articles

Modelling of Dividend Payout Policy for Polish Public Companies

Purpose: The purpose of this research is to identify drivers of dividend payouts in energy companies listed on the Warsaw Stock Exchange (WSE) in the pre-COVID-19 pandemic decade, taking into account potential determinants such as general economic situation, company’s financial efficiency, value of assets, lagged dividend payout, earnings, ownership of the company – main shareholders and structure of statutory bodies including women presence. Design/methodology/approach: Correlation analysis and pooled regression models to determine the potential determinants of payouts are used. Firms' financial performance is reflected by selected individual financial ratios and a specially constructed vector synthetic measure VSMD. Findings: Findings reveal that dividend payouts of energy companies in Poland are irregular. Dividend payments significantly depend on firms’ financial efficiency, the size of their assets, lagged dividend payouts and ownership model, while the gender structure of statutory bodies has no impact on dividend payouts. The dividend payment decisions are implied by the current economic situation. Research limitations/implications: Limitations arise from the longitudinal sample design and data selection. Only Poland is considering with rather small WSE market, and the study concerns 9 companies described by 14 financial ratios (already selected) and set of variables for each year in 10 years timespan. Our VSMD measure needs pattern and anti-pattern which requires data from the entire market to be determined. Thus, the list of diagnostic variables cannot be simply copied for different “national” markets. Originality/value: This study contributes to research on the determinants of dividend policy. It introduces to the investigation the author's synthetic measure of firm financial efficiency. Explains dividend payments in Polish energy companies in the period 2010-2019 proposes a consistent baseline for research after the pandemic and after the war in Ukraine.

Prediction of Financial Distress and the Impact of the Covid-19 Pandemic on PT Garuda Indonesia for the period 2016-2021

This study aims to analyse the potential financial distress of PT Garuda Indonesia. This research uses the modified Altman Z-Score model approach. This study used quantitative descriptive methods with a case study approach at PT Garuda Indonesia. Measurement of financial health level is done using the Altman ratio model. The data source uses secondary data obtained directly from the company's website. This study used annual report data from 2016 to 2021. Based on the analysis of financial ratios, during the 2016-2021 period, the financial performance of PT Garuda Indonesia continued to decline. The results of the Altman-Z score calculation show that PT Garuda Indonesia is experiencing financial distress. This result is an early warning for PT Garuda Indonesia to improve its financial performance. Suggestions to the Government of Indonesia, through the Ministry of SOEs as the main shareholder in order to give full attention and support to PT Garuda Indonesia to avoid future bankruptcy risks.

Can Fintech development improve the financial inclusion of village and township banks? Evidence from China

Enhancing the financial inclusion of financial institutions enables more vulnerable groups to obtain opportunities to access loans—an essential prerequisite for achieving the United Nations' Sustainable Development Goals. The main purpose of this study is to explore whether the development of Fintech impacts the financial inclusion of village and township banks (VTBs). Using the micro survey data of 900 VTBs, this paper empirically analyzes the impact of financial technology on the financial inclusion of VTBs and explores the mediating role of mobile banking adoption. The results demonstrate that the development of Fintech can improve the financial inclusion of VTBs through the application of mobile banking. Notably, VTBs can significantly contribute to financial inclusion by adopting an online and offline service model, though mobile banking is substituting physical branches with the rapid development of financial technology. Further analysis finds that the development of Fintech has prompted VTBs to increase the inclusiveness of loans to rural households, loans to poor households, and loans to small and micro enterprises. Furthermore, rural credit institutions and city commercial banks as the main shareholders are conducive to strengthening the role of Fintech in promoting the financial inclusion of VTBs. Finally, the development of Fintech has a stronger competitive incentive for VTBs located in the eastern regions.

Antenatal Care Services in Sudan Before and During the 2023 War: A Review Article.

Antenatal care (ANC) is provided by skilled healthcare professionals to pregnant women to ensure the best health conditions for both mother and baby during pregnancy. It includes risk identification, prevention, management of pregnancy-related diseases, health education, and health promotion. Antenatal care has a great effect on vital health indicators such as maternal and neonatal mortality by identifying and treating pregnancy-related complications. Political instability and armed conflict have seriously affected the health system, which has catastrophic implications for pregnant women's health. This review aimed to summarize the literature on ANC in Sudan before and during political instability and war by highlighting its effect on maternal mortality, coverage, care providers, quality of care, accessibility, and utilization. Other aspects of this review are the ANC components and service provision during the war. In addition, the author tried to identify the gaps and point out the future research needs in Sudan. A total of 58 articles about ANC in Sudan have been reviewed through PubMed, Google Scholar, ResearchGate databases, and other search tools. The keywords used were "antenatal care", "coverage", "service providers", "service quality", "accessibility and utilization", "components", and "ANC during the war". All the keywords were followed by "Sudan" to confine the search. According to the reviewed data, ANC services in Sudan, even during normal political situations, were not sufficient and of poor quality in most of the reviewed regions. The political instability and armed conflicts worsened the situation, and it became catastrophic. To improve the accessibility and quality of ANC services, we will need the collaboration of all stakeholders to address the health needs of vulnerable groups, people in remote rural areas, and nomadic communities towards providing the required health services in general and ANC in particular. On the other hand, an important aspect of this development is the availability of skilled healthcare providers and the adoption, revision, and updating of working procedure guidelines to match the needs of the local communities. The main shareholders are the local communities; they must be empowered and involved by raising their awareness. Then, effective, punctual, and applicable contingency plans should be ready for any unfortunate crises.

TOPLIČKA PRIVREDNA BANKA ‒ PROKUPLjE

The lack of capital for crediting the economy and the population in the Kingdom og SHS in 1923 led to the establishment of new financial institutions during the following year. Among them was the Commercial bank of Toplica in Prokuplje. The main founders of this institution were People’s deputies of the Radical Party. Even before the Great War, ther were a lot of banks in Serbia whose founders and main shareholders were from the world of politics. It was known which political party belonged to which bank, and they were places used by the parties to win over voters.In the period from its foundation to 1930, Commercial bank of Toplica operated successfully and brought regular dividends to its sharegolders. At the end of the third decade of the 20th century, there was a noticeable decline in the volume of bussiness, and with the outbreak of the banking crisis in the Kingdom of Yugoslavija in 1931, the bussiness of this institution is unknown. Most likely, its was formally engaged in business, but since its did not request protection, its had no problems with the payment of savings deposits. With the cange in the social system after WWII, Commercial bank of Toplica officially ceased to exist because its liquidation was started.

The relationship between dividend payout and economic policy uncertainty (EPU), ownership concentration and free cash flow in Chile

This study examines how the dividend payout of Chilean firms is associated with economic policy uncertainty (EPU), while controlling for ownership concentration and free cash flow, to consider agency problems. Its contribution is twofold. First, it detects a non-linear, U-shaped relation between EPU and dividend payout, which is a novel finding. Second, this result holds only in cases of high EPU. No significant relationship in cases of low EPU was detected. The sample comprises an unbalanced panel data of 1034 observations from 2005 to 2016. Including ownership concentration as an independent variable leads to a negative association between it and dividend payout, showing a potential agency problem between the main shareholder and the minorities. If free cash flow is considered in the model, then the results show a positive relation between free cash flow and dividend payout, which implies the mitigation of the agency problem. Finally, once both variables (ownership concentration and free cash flow) are considered together as explanatory variables, only free cash flow turns out to be statistically significant and positively associated with dividend payout.

За стопанската дейност на Евстати Селвели през 1844 година

Abstract: This article presents information about the economic activity of the 19th century Tarnovo entrepreneur and public figure Eustati Selveli in 1844. During the year under review E. Selveli participated in at least two business structures. These were the trading companies “Hadji Mincho Hadji Tsachev and Company” and “Eustati Hadji N. Selveli and Company”. In the first, he worked together with Hadji Mincho Hadji Tsachev who was also the main shareholder in it, and in the second, with one of his earliest partners (most probably the earliest one) – Atanas Hadji Nikolaou. The information that the preserved documents provide on the general economic activity of E. Selvleli and Hadji Mincho in 1844 is rather scarce. Historical sources contain richer information on the general activity of E. Selveli and At. H. Nikolaou. The main source on the matter is the trade notebook of the partners. It was kept in Greek and covered the period 1842–1845. In this sense, the publication reveals more details on the activity of the trading company “Eustati Hadji N. Selveli and company” and more specifically presents information on the main business partners of the associates; the goods they traded in; their volume and prices; the monetary units they used in their business activity and their equivalent in grosh (the local coin at the time); the roads that the goods were transported, etc.

Is Moral Education Effective in Preventing Radicalism and Terrorism?

Pancasila is a solution to the problem of radicalism that is currently plaguing Indonesia. So it is hoped that the values in Pancasila must really be carried out by the people of Indonesia in order to prevent and minimize radicalism and terrorism in our beloved country. The loss of the values contained in Pancasila in Indonesian society is the root of the emergence of various acts of radicalism and terrorism in Indonesia. Therefore, the implementation of Pancasila values, in order to remain actual in facing the threat of radicalism, must place more emphasis on conveying three messages, namely, first, this country was formed based on agreement and equality, in which no one should feel that he is the main shareholder, or citizen. first class. Second, the rules of the game within the state have been agreed upon, and the state has full sovereignty to discipline its state members who are trying systematically to change the order, in ways that are against the law. Third, the state provides protection, opportunity, future and balanced protection to achieve the national goals of a just and prosperous, secure, civilized and independent society. The Indonesian government has recently begun to be wary of the development of radicalism in the country in relation to the ISIS (Islamic State of Iraq and Syria) network. The issue of ISIS has become a global issue and it seems that the world is united to fight it. Seeing this phenomenon, steps need to be taken to prevent radicalism from thriving in this motherland. In addition to taking action against the perpetrators of radicalism, the government must also take preventive or preventive measures so that people are not easily provoked by ideologies that use religious attributes. Close cooperation is needed between the government, security forces and religious leaders to straighten out religious understanding.

REFORMS IN THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT: “ADJUSTMENT” TO THE CHANGING ECONOMIC REALITY

Global financial system, which took shape after the formation of the Bretton Woods institutions, the International Monetary Fund and the World Bank, is forced to constantly transform in order to come in line with the economic and political realities . In the last decade, both the fund and the bank have experienced similar changes: their capitals have been increased and the votes of their main shareholders have been redistributed. The reform of the International Monetary Fund is widely covered in the Russian scientific literature, while innovations in the work of the World Bank have not been considered in detail.
 
 The purpose of the article is to analyze the processes taking place in the World Bank Group and in its key institution — the International Bank for Reconstruction and Development (IBRD), in connection with the increase in the equity capital of the IBRD through the issuance of additional shares. So, the article includes the description of the cycles of the abovementioned capital increase of the IBRD. Based on a comparison of the bank’s financial indicators for different years an assessment of the effectiveness of innovations and the revision of approaches to providing loans in terms of pricing policy and lengthening the borrowing period was carried out. As a result, it was concluded that the IBRD reforms not only helped the World Bank Group strengthen its position in the global financial system, securing its role as a leading development institution, but also became a catalyst in structuring projects in a way to pay more attention to the social sphere. The case of Uzbekistan described in the article as a success story of the modernized IBRD showed how ready the bank is to listen to its shareholders and borrowers.
 
 Taking into account the above, it is concluded that Russia needs to maintain its share in the capital of the IBRD, even despite all the difficulties it has to face due to the position of Western states.

An Investigation of the Link between Major Shareholders’ Behavior and Corporate Governance Performance before and after the COVID-19 Pandemic: A Case Study of the Companies Listed on the Iranian Stock Market

One of the basic functions of establishing corporate governance (CG) in companies is improving performance and increasing value for shareholders. Expanding the company’s value will ultimately increase the shareholders’ wealth. Therefore, it is natural for shareholders to seek to improve their performance and increase the company’s value. If CG mechanisms cannot perform this function in companies, they do not have the necessary efficiency and effectiveness and, therefore, cannot improve the efficiency of companies. This article investigated the connection between the power of major shareholders and the modality of CG of companies listed on the Iranian capital market before and after the COVID-19 pandemic. The statistical sample of the research included 120 companies listed on the Tehran Stock Exchange for the selected period from 2011 to 2021. The results showed that the concentration of ownership is harmful to adopting corporate governance (GCG) practices. In particular, the high level of voter ownership concentration weakens the corporate governance system (CGS). The results of this study, which was conducted using panel analysis, revealed that the concentration of ownership impairs the quality of CGS, and major shareholders cannot challenge the power of the main shareholder; it alsonegatively affected the quality of business boards, both during and before the COVID-19 pandemic. The competitiveness and voting rights of the major shareholders negatively affected the quality of board composition before and after the COVID-19 pandemic. The concentration of voter ownership also negatively affected the quality of CGS, both during and before COVID-19, and the competitiveness and voting rights of major shareholders before COVID-19. This concentration positively affected the quality of CGS after the COVID-19 pandemic.

State-centric Ploys in the Rise and Liquidation Process of the Nangah Company Limited (Cameroon), 1962-1991

Corporate enterprises in British Southern Cameroons as in most African territories under colonial rule were dominated for the most part by non-nationals. After the independence and reunification of British Southern Cameroons with the Republic of Cameroon on 1st October 1961, there was a visible paradigm shift in the actors and scope of intervention of corporate business life in Anglophone Cameroon, the territory roughly representing the erstwhile British Southern Cameroons. The Social and economic needs of the new state in office structures, hotels, transportation and the increased exigency for public utilities, gave room for fresh business opportunities. This resulted in the birth of indigenous business companies prominent among which was the famed Nangah Company limited. Though this company became the symbol of indigenous entrepreneurship in Anglophone Cameroon in the 1960s and 1970s, it became a victim of “problematic” liquidation in the 1980s largely as a result of political manipulation. It is centrally in this context that this paper mostly drawing from primary historical sources and employing a descriptive and analytical approach, examines the political influences involved in the rise and eventual collapse of the Nangah Company. The findings revealed that the backbone of the speedy ascendancy of the Nangah Company was the Kamerun National Democratic Party (KNDP) support given that the main shareholders of the company were financial benefactors of the KNDP Party. The paper equally disclosed that, following the putting in place of a one party state in 1966 and later the Unitary State in 1972, political suspicion and social clashes between D. A. Nangah and President Amadou Ahidjo, led to the political victimization of the Nangah Company. This personality differences partly contributed to ushering the company to a calamitous demise. It also emerged from the investigation that, the Nangah Company was entangled by the double matrix of the inability by the .........

Related Party Transactions on the London Stock Exchange: What Works and What Does Not?

The rules governing companies listed on the Main Market of the London Stock Exchange (LSE) and its Alternative Investment Market (AIM) fill an important gap in the general law regulating related party transactions (RPT). The regulatory techniques used in these ‘Exchange rules’ are principally disclosure to the market at the time of the transaction and, in a more limited range of cases under the Main Market rules, prior approval of the transaction by a majority of the uninvolved shareholders. This article investigates the outcomes of these rules by analysing the RPT announcements made by companies on these two markets over a twelve-month period beginning in June 2019. These announcements related to nearly 500 RPT. The article concludes that neither mechanism works at an optimum level. The Main Market shareholder approval requirements catch only a small number of companies, predominantly outside the FTSE 350. The disclosure rules omit an important element in the information the market needs, namely the company’s analysis why the transaction is considered fair. In cases where there is an operative shareholder approval requirement (from whatever source), then the need to obtain shareholder approval is likely to force revelation of the company’s fairness analysis, but this driver does not operate across the majority of RPT. The article makes some suggestions for simple reforms to address these defects. related party transactions, London Stock Exchange, disclosure to the market, shareholder approval, authority to issue shares, pre-emption, independent directors, fairness certification

The main aspects of effective corporate governance at the modern level

The article outlines the main aspects of effective corporate governance, the formation of corporate relations in Ukraine. The main components of modern corporate enterprise management are studied. The problems of modern corporate management of enterprises related to the implementation of control processes are considered. The international experience in corporate governance is analyzed, which demonstrates a solid basis for creating basic principles and provisions for conducting this type of activity. It is proved that for the reliability and legitimacy of economic relations, for the protection and investment confidence of shareholders and their partners, the corporate governance system is obliged to provide full and timely demonstration of information on financial condition, performance, ownership and management. The directions of development of the corporate governance system for the economy of the country in general are determined, and the necessity of partnership relations between the shareholders in particular is considered. It is investigated that the current conditions require the development of an effective corporate governance policy during the global pandemic. To do this, the main tasks must be solved, such as the formation and implementation of a strategic modern system of corporate governance and the creation of conditions for effective interaction between all participants in the management process. It is considered that there is no generally accepted model of corporate governance, which would be used at the international level. It is noted that the vast majority of Ukrainian enterprises use the national model of corporate governance. This model was formed on the basis of a combination of basic principles of the German and Anglo-American models. According to this model, the main shareholders of companies are its employees, management, banks, the state. At the same time, banks remain the main source of funding, and this is more typical of the German model of corporate governance. The domestic model of corporate governance, which also has common features with the Japanese model, namely, a significant role is given to the state in the management process. It is noted that in Japan, the inclusion of government representatives in the system of corporate governance is not based on the presence of a significant stake in the state, as in Ukraine. In the Japanese model of corporate governance, the interaction between the main participants in the relationship is aimed at establishing new business contacts, rather than obtaining the maximum amount of profit It is determined that corporate governance at the current level is a system of relationships that sets up certain procedures for making management decisions. The effectiveness of corporate governance is to increase the level of profitability of the enterprise through the introduction of proper control, effective management and financial transparency.

An Empirical Study for the Correlation Between Disclosed Related Party Transactions and the Market Value of Companies Listed on the Amman Stock Exchange

This study examines the correlation between related parties’ transactions (RPT) and company’s market value in Jordan. In this study the related party transactions were covered through operationalized into three forms that are: Transactions with parent company, subsidiaries and affiliated companies (TPSAC), Transactions with associated companies (TAC) and Transactions with main shareholders, directors and/or managers (TMSDM), in order to see the impact on company’s value.This study considered all the companies listed in Amman Stock Exchange (ASE) at the end of year 2018 with total number of 226 companies for all sectors. After excluding companies with missing data, the final sample size was 218 companies; covering almost 96% of population. Multiple regression test was used to examine the study’s hypotheses. The result of the study indicates that the related party transactions (RPT) Shown a positive effect on (TQ) which represents the company’s value with presence of the control variables (audited by one of the big four audit firms (BIG), size of the company (SIZE), return on assets (ROA), and dividend yield (DIV). The results also show the increasing influence of the independent variable on the dependent variable with presence of the control variables.

Dark Side Case: Layers of Corruption in the Car Wash Scheme

Petrobras is an oil and gas giant publicly traded in Brazil and in international stock markets such as the New York Stock Exchange. The company’s main shareholder is Brazil’s federal government. Political influence is at the center of Petrobras’ implication in a massive corruption scheme revealed in 2014. Brazilian Federal Police’s Operation Car Wash disclosed a wide corruption scheme involving Petrobras, members of the Brazilian public administration, and some of the top construction firms in the country. The case focuses on describing how corruption practices spread at Petrobras as well as on the company’s responses to the crisis initiated in March 2014. In the months that followed the scandal, former Petrobras executives involved in the scheme agreed to plea bargains and thus helped reveal an intricate network of corruption practices, including complex forms of bid rigging and bribery. Meanwhile, Petrobras announced the intention to create a Governance, Risk, and Compliance unit that would be in charge of various compliance initiatives. On the other hand, the company expressly denied liability and portrayed itself as a victim of the scheme. Based on rich information from the Car Wash scandal, the case addresses the following questions: what is organizational corruption and what are the main assumptions underlying the design and implementation of anti-corruption strategies?

Management Succession in Polish Small and Medium Enterprises in the Light of Empirical Studies

Purpose: The article presents the methodology and empirical study results on management succession in Polish small and medium enterprises aimed at the identification of scope, form effects, and barriers in management succession and situational conditionings of that process. Design/Methodology/Approach: The empirical studies were accomplished with the use of survey technique on random-target array of 200 Polish private enterprises. The respondents were entrepreneurs – owners or main shareholders of the examined subjects. To formulate conclusions selected statistical analyses were used, in the form of quantitative / percentage indications of specified variants of responses from the questionnaires, as well as the correlative calculus of variables. Findings: The author managed to positively verify the hypothesis of the limited scope of managerial successions in managing polish SMEs, demonstrate the positive effect of these processes upon the development of enterprises, as well as to indicate their main restrictions. We also revealed the connections between the features of succession and the selected characteristics of enterprises. Practical Implications: The author sees the practical effects of propagating study results in the possible changes in the sceptical attitudes of Polish entrepreneurs towards managerial forms of succession in management, which should result in development and improvement of effectiveness in enterprises. Originality/Value: The presented studies have no equivalent in domestic literature, and their results are of importance both for those practicing management and for demarcating the directions of further studies.

First-largest shareholder and the attractiveness of investing in Polish dividend companies

The purpose of this article is to examine the attractiveness of investing in shares of listed companies that regularly pay out dividends depending on the type of the first-largest shareholder. In order to achieve the aim of the paper, two following research questions we formulated: 1) in which companies, broken down by type of the first-largest shareholder, is the highest dividend payment observed? 2) considering the main shareholder, owning shares of which dividend companies is most beneficial for a stock market investor? Furthermore, the research hypothesis is: when investing in dividend, the most attractive investments are those companies in which the most shares are held by institutional investors and the State Treasury. The research was conducted on non-financial companies listed on the Warsaw Stock Exchange in the years 2005-2019 that regularly paid out dividends. The main research method was the classical technique for order of preference by similarity to ideal solution (i.e., TOPSIS) in which stimulants and destimulants were selected in a way which enables to assess the investment attractiveness from the point of view of a long-term stock market investor interested in dividend. Moreover, the Pearson correlation matrix and descriptive statistics were used. In order to conduct the computation we used the statistical software Statistica 13.5 and Excel.The research revealed that the highest dividends were paid out by these companies in which the first-largest shareholder was the institutional investor. In addition, our calculations based on a synthetic indicator showed that the most attractive investments (in terms of stock market investor interested in so called ‘dividend investing’) were shares of these companies in which the main shareholder was an institutional investor, individual investor and legal person. In all these types of companies, the average value of dividend payout ratio was higher than in the entire research group. The fourth position in terms of investment attractiveness was occupied by the companies in which managers held the most shares (these companies paid out the lowest dividends in the entire research group). The last place in the ranking was taken by the companies in which the State Treasury was the main shareholder (these companies, despite the payment of high dividends, turned out not to be attractive investment due to their financial condition, and in particular, very high debt).

STUDY OF PAST DECADE (2010 - 2020) SELECTED LITERATURE ON MINORITY SHAREHOLDER AND SHAREHOLDER ACTIVISM IN MALAYSIA

Due to its vitality in preserving the stability, transparency, and sound management of businesses, corporate governance continues to play a dominant role in many Malaysian companies. This will give the country and foreign countries good opportunities to invest in Malaysia and provide an investment-friendly environment. It adds color to the existing soft stock market in Malaysia as a result of the economic instability, the political turmoil, and the pandemic effects of Covid-19. Two main elements of corporate governance in Malaysia, minority shareholders, and shareholder activities will be addressed in this article. Minority shareholders, in particular publicly-listed companies in Malaysia, are major players in companies. However, in other countries, the general opinion among minority shareholders is that executives, administrators, and main shareholders or control shareholders tend to take advantage of them for their own personal purposes. As a result, shareholder activism plays a key role in making shareholders aware of their rights and obligations in the ownership of the firm, in particular as minority shareholders, through this activism. However, Malaysia has not yet come to a firm conclusion on the effectiveness of shareholder interference. Five articles on minority shareholders and shareholder activism relevant to Malaysia, each from 2010 to 2020, were retrieved from Google Scholar and examined from Malaysia's corporate governance perspective to determine the extent of their growth.

Apex Pumps sold in management buyout

UK pump manufacturer Apex Pumps founder and main shareholder Nick Sole has sold the business and assets of Apex Fluid Engineering Ltd and Precision Alloys Ltd in a management buyout deal.

Regional development corporation in Russia - the problem of functioning

The transition to a market economy for the Russian regions has complicated the old problems of regional development and created new ones. As a result, there was an imbalance in regional development. Some regions received additional incentives for their development, while many regions experienced stagnation. Regional policy measures are required to correct this imbalance. This becomes possible with the use of special mechanisms for regional development. These include Development Corporations. Such corporations were created in the 1960s and 70s and operate in the United States, Colombia, Brazil, Belgium, and other countries. Development corporations have now been established in many Russian regions. According to the organizational and legal structure, most of them are joint — stock companies. Their founders and main shareholders are almost always the regional governments. The main goal of these corporations is to develop the regions by attracting investments for the implementation of various projects. The main task of the functioning of development corporations is the implementation of the mechanism of public-private partnership. However, the effectiveness of this mechanism of regional development for the vast majority of regions is low due to a number of three groups of factors — institutional, exogenous, and endogenous. The result of their combined action is the low efficiency of regional development corporations. The analysis of the reasons for low efficiency allows us to use the potential of development corporations, taking into account the world experience and Russian specifics. This question is currently insufficiently sanctified and this article is intended to eliminate this as far as possible.