Microeconomic Factors Research Articles

Determinants of the performance of insurance companies

The objective of this study is to assess empirically the determinants of the performance of Tunisian insurance companies during the period of study from 2002 to 2018 using the panel data methodology. The sample used in our study is made up of 13 resident insurance companies listed on the Tunisian Stock Exchange during the period of study. We employ microeconomic and macroeconomic variables. The empirical results show that only the microeconomic factors are determinants of the performance of insurance companies. The macroeconomic factors do not have significant effects on performance. Capital structure, solvency, risk capital management, premium growth, volume of capital, age and financial investments are the determinants of the performance of Tunisian insurance companies with a different sign positive and negative.

Micro-Economic Benefits of Peer-Producing Containerized Network Functions

Discrete, non-virtualized network elements are characterized by large costs, limited functions, vendor lock-in, and limited orchestration. Virtualization technologies like virtual machines (VM) and containers have expanded the scope of virtual resource utilization through consolidation of workloads that were previously running on multiple servers by running them on a single server. With the advent of Network Functions Virtualization (NFV), industries are able to reduce the micro-economic factors associated with vendor proprietary model such as transaction costs and (physical and human) asset specificity to deal with vendor vulnerabilities in contractual relationships because Virtual Network Functions (VNFs) can virtualize dedicated networking functions that were traditionally performed by vendor appliances such as routers, switches, firewalls, and load balancers. Even though virtualization technologies (VMs and containers) and NFV have demonstrated their benefits in the market, little attention has been devoted to the development and adoption of containers to build VNFs. This research paper identifies micro-economic factors, such as transaction costs, associated with searching, buying, provisioning, and maintenance of vendor proprietary appliances and compares them with the coordination costs associated with the adoption of containerized VNFs. This comparative analysis could be used to identify the type of network operators that could serve as key organizers (the network operator who can benefit largely by adopting containerized VNFs) of an open source peer production model as well as other firms that could serve as individual contributors. Furthermore, to identify various rewards and incentives that a managerial firm can leverage to motivate its employees to participate in such an effort, a quantitative survey was conducted (with Tier 1, Tier 2 and Tier 3 Service Providers) to identify the managerial incentives such as bonuses, rewards, peer recognition, and promotion targeting varied network operator firms to accurately capture and analyze employee interests/motivation. Finally, the paper shows a measuring framework to evaluate individual contributors based on the project modularity and indicates the viability of this model.

Determinants of the non-Performing Loan Ratio in the European Union Banking Sectors with a High Level of Impaired Loans

In the article an attempt is made to identify the quality of credit exposure determinants of banks in European Union countries that were characterized by a high level of impaired loans at the end of 2017 (Bulgaria, Croatia, Cyprus, Italy, Ireland, Greece, Portugal). Using the static panel-based approach the non-performing loan (NPL) determinants for the period from 2011 to 2017 were analyzed. The results showed that the high level of NPLs can be explained mainly by both macroeconomic and microeconomic factors. In particular, it has been shown that in the surveyed countries supervisory authorities should pay special attention to smaller banks with high dynamics of new loans and a low return on assets due to the fact that these entities are characterized by a higher NPL ratio. A higher level of NPL is also affected by a high concentration of the banking sector and higher interest rates on newly granted loans. As a result of research it was also shown that the majority of NPL determinants are the same in all types of banks, regardless of the business model and the scope of banking supervision. The differences were noticeable in characteristics regarding the housing market as well as the profitability of operations and lending dynamics of the analyzed entities.

Factors that drive dividend payout decisions: an investigation in the context of Bangladesh

Generally, dividend policies guide the financial rewards of the shareholders. It is often a challenging decision for companies to determine the appropriate level of dividend for the shareholders. While some past studies argue that microeconomic factors drive the decision of dividend policies, many other researchers claim that it is the macroeconomic factors of a country which ultimately influence the dividend payouts. However, there is a paucity of research in this area for emerging countries like Bangladesh. This study thus examines impacts of a set of pre-determined microeconomic and macroeconomic factors upon cash dividend payouts by analysing a sample of listed firms of the Dhaka Stock Exchange (DSE), Bangladesh. Findings are analysed based on liquidity, leverage, growth, and size of the sample firms for microeconomic factors; while, macroeconomic factors are analysed upon dividends on an average basis. The results provide policy implications for shareholders, management, policymakers and the government of Bangladesh.

Мікроекономічні чинники розвитку підприємств сфери гостинності в регіоні

The article is aimed at examining the main microeconomic factors of the development of hospitality sector enterprises in the region in the context of changes. The definition of regional micro-environment of the enterprises in the hospitality sector is provided; the main factors of economic development of enterprises of the industry are systematized. On the basis of the carried out analysis the peculiarities, tendencies and problems of development of hotel business enterprises in Zakarpattya region are defined. The main microeconomic factors that form the situation of the regional market of hotel services are examined. The peculiarities of micro-environment of hotel business in the region are defined, among which: insufficient level of use of the existing natural, resource and tourist potential of the territory; increased competition in the market; development of both the «shadow» and «gray» markets of hotel services, especially in the conditions of restrictive measures; reducing the number of foreign tourists; insufficient level of development of various forms of tourism, which limits the possibilities of hotels to expand services. The methods of adaptation of hospitality sector enterprises for survival and development in new macro- and microeconomic conditions are proposed, which include in the first instance: the formation of an effective security system for guests; researching target audiences and focusing services on their needs; intensification of development of various forms of tourism in the region, in particular therapeutic, ecological, educational, children’s, and development of appropriate hotel products; intensification of innovation activity and introduction of information technologies. Further researches will focus on the development of methodological approaches to the assessment of the micro-environment of hospitality sector enterprises and their use for the formation of a regional strategy for tourism development and hotel-restaurant business in the region.

Determinantes microeconómicos de la pobreza dinámica en el Perú 2015-2018

The objective is to identify the microeconomic factors that determine dynamic poverty, using 4-period panel data, the study mainly focuses on the dynamics of per capita expenditure in relation to the total poverty line, that is, how many households are in situation of temporary or permanent poverty as a result of changes in the income of households or individuals and therefore in expenses, the source of information is the database of the National Household Survey (2015-2018), the determinants of Monetary poverty is approached from a personal and housing asset approach. The estimation method is the logit model with fixed effects. Among the main results, it was possible to confirm that the condition of poverty is dynamic and it has been found that the main determinants of the condition of poverty are: the size of the household, the number of income earners within the household, the average years of education of the other members of the household, number of jobs of the head of household, the possession of the internet service and the title of property of the house. The results confirm that the condition of poverty depends on the possession of personal assets and housing.

An Empirical Study of Financial Ratios Affecting Stock Returns in the Indian Stock Market

Stock market returns are the profit/loss the investors generate out of their investment in the stock market. These returns are dependent on various micro-economic and macro-economic factors. The present study analyses the micro-economic factors (financial ratios) that affects stock return which will provide a parameter for investors to decide about their investment. For the purpose of empirical study 12 firms of Fast Moving Consumer Goods (FMCG) sector and 6 firms of pharmaceutical sector which are trading on the NSE (National Stock Exchange) is selected and is studied for the period 2010-2017. The effect of financial ratios namely, DPS (Dividend Per Share), EPS (Earning Per Share), CR (Current Ratio), QR (Quick Ratio), ROE (Return on Equity), ROA (Return on Asset), DER (Debt to Equity Ratio), PBV (Price to Book Value), DPR (Dividend Pay-out Ratio), DYR (Dividend Yield Ratio) on stock returns is analysed using panel data analysis. This study uses Panel Vector Auto Regression Model (PVAR). In order to specify the appropriate estimation method of our PVAR Models, we employed Hausman test. Accordingly, our PVAR Models are estimated with fixed effects. The study found out that the price-book value, dividend per share has a significant impact on stock returns. The results of Wald test showed that there is a short run relationship between PBV, EPS, DPS, ROA and SR.

The Effect of Internal and External Factors on the Stock Price of Pharmaceutical Companies in Emerging and Emerged Markets

Purpose: The global financial crisis of 2008, considered by many economists to have been the most consequential since the great depression of the 1930s, altered the very fabric of global macro-economy and left many short and long-term impressions at various levels. Though the catastrophic effect of that meltdown penetrated the global market with lightning speed, the aftermath was rather uneven in its manifestation. Countries of American and European continent suffered severely but Asian countries were rather mildly affected and the reason behind this uneven perfusion could be the disparity in the economic environment at the microeconomic and macroeconomic levels in different continents. The Purpose of carrying out this research is to unveil the influence of internal microeconomic factors at firm level as well as external macroeconomic factors at country level on the overall stock price of Pharmaceutical companies of Asia's emerging market (India) and emerged markets of United States of America and Western European countries (Germany, France, UK, and Switzerland) after the global financial crisis of year 2008. Research Design/Methodology: During the present course of the investigation, secondary data of forty pharmaceutical companies from the year 2008 to the year 2017 has been employed to perform an empirical analysis. Moreover, an explanatory and comparative research design has been applied to corroborate the statistical outcome. For statistical analysis, EViews 10 student version, statistical software has been used on the dependent variable Organization Stock and several internal independent variables such as Return on Equity (ROE), Earnings Per Share (EPS), Dividend Per Share (DPS), Dividend Payout Ratio (DPR), PE ratio, firm's asset as well as few macroeconomic level independent variables such as corporate tax, inflation rate, GDP and exchange rate. Findings: Price movement of stocks is not independent in nature and doesn't follow a random walk. There are several factors responsible for the stock price movement such as investor sentiment, social, economic, environment and organization's operational and financial situation etc. This study shows how the aforementioned factors affect the stock prices of sample companies of emerging and emerged markets. Practical Implications: The outcome of this research could be helpful to managers to regulate organization's financial ratios and address the macroeconomic fluctuations to sustain the momentum of the stock price that will inadvertently increase the value of the company. From the investor's point of view, this study could provide them with better anticipation of future trends in the stock prices. Originality/Value: This study offers a contemporary review of the role of organizational and macroeconomic factors on the share price of companies and the stock market, thus contributes to the available literature in this domain. Keywords: Pharmaceutical Companies, Emerging Market, Emerged Market, Microeconomic Variables, Macroeconomic Variables DOI : 10.7176/EJBM/11-36-18 Publication date: December 31 st 2019

Geographical diversification and bank performance: evidence from Indian banks

PurposeGeographic diversification results in the improvement of firm value through an increase in scale and scope of economies, gains in synergy, reduction in cost and improved corporate governance, however, the capabilities of financial institutions get heavily affected due to information asymmetries, varied macro and microeconomic factors across economies. In this context, the purpose of this paper is to empirically analyze the impact of geographical diversification on the performance of Indian Banks.Design/methodology/approachFor an unbalanced panel data set of Indian Banks over the period 2001–2016, fixed effect model (FEM) with a distributed lag is used and tested for firm and time fixed effects. Further, the study also examines the role of bank size and ownership on the above association.FindingsFindings of the study suggests that geographical diversification helps in increasing bank returns for the overall sample but does not have any significant impact on bank risk. For foreign and public banks, geographical diversification helps in increasing bank returns but does not have any significant impact on bank risk. This indicates toward the adverse selection, poor monitoring incentives in new markets and suggesting a lack of managerial skills.Originality/valueThe study indicates that while formulating the policies regarding branching and expansion these findings can serve as a guiding tool for managers and regulators. Findings have important implications for financial institution and policymakers in globalized financial markets.

PENGARUH KURS, GROSS DOMESTIC PRODUCT DAN SOLVABILITAS TERHADAP RETURN SAHAM INVESTOR PADA PERUSAHAAN PERTAMBANGAN

The level of return obtained by investors is influenced by microeconomic and macroeconomic factors. This study aims to obtain empirical evidence regarding the effect of exchange rates, Gross Domestic Product and solvency on stock returns. This research was conducted at the mining company in the coal sub-sector on the Indonesia Stock Exchange. All the coal mining sub-sector companies listed on the Stock Exchange for the period 2014-2017 used as the population. The method of determining the sample used is using a saturated sampling technique. Multiple linear regression test used as the data analysis on this research. Based on the results of the analysis of this study it was found that the exchange rate and GDP had a negative and significant effect on stock returns. The solvency proxied by DER has a positive and significant effect on stock returns.
 Keywords: Exchange Rate, Gross Domestic Product, Solvability and Return.

The determinants of ownership in M&As: An analysis of the stake purchases in Romanian acquisitions

Research question: The study aims to identify the microeconomic factors that influence the amount of stake purchased in Romanian acquisitions. Motivation: Romania is a market with potential and one of the fastest growing economies in the European Union, facts that make Romanian companies appealing for this type of restructuring transactions. Thus, Romanian companies participate in acquisitions, being either in the position of acquirers or target entities (in most cases). We want to identify if the purchased stake is significantly influenced by a series of factors, related to both involved companies. Idea: The decision of an acquirer to purchase a stake in a target company depends on both its characteristics and the ones of the target company which meets its needs. Considering this assumption, we use a series of financial and nominal factors, which are related to both companies involved (productivity and workforce ratios, the relatedness between the activities of the companies involved and the national/international dimension on the investment), to estimate how much they influence the purchased stake in Romanian acquisitions. Data: The study is based on a sample of 192 acquisitions, with one target and one acquirer, in which a Romanian company was involved, for 2010-2017 period of time. Out of these, 130 transactions are industry acquisitions and 62 transactions are services acquisitions. Tools: We use linear regression, crosstabulation and ANOVA. Findings: Using a mediation model, the results will show that the workforce ratio, the productivity ratio and the relatedness of the two companies have a significantly influence in the percentage purchased in the target company, but the national/international side of the M&As lead to an increase in the capacity of the proposed models to predict the variance of the final investment. The results are controlled for industry and services, considering the NACE main section of the target company. Contribution: Our findings contribute to the scarce literature on Romanian acquisitions, providing information regarding the influence factors on the purchased stake in acquisitions.

ROLE OF MAIN ACTIVITIES IN FORMATION OF THE CAPITAL OF AN ENTERPRISE, THEIR EVALUATION AND CONTROL

The article deals with the problem of valuation and control of non-current assets, in particular of fixed assets, determination of their role in the formation of the enterprise’s own capital, their correct and reliable evaluation at the enterprise. The need to study the effectiveness of using non-current assets at the enterprise to make sound management decisions, in particular regarding the composition of fixed assets, their updating and use is defined. The necessity of studying the influence of fixed assets on the amount of gross product is substantiated. It should be noted that non-current assets, in particular fixed assets, have a significant place in the capital formation. Therefore, in the process of managing non-current assets at the enterprise such managerial tasks are decided as substantiation of renewal fixed assets possible forms, determination of possible ways and the need for their growth, formation of necessary financial resources for acquisition of fixed assets and increase the are efficiency. Correct and substantiated non-current assets accounting system at the enterprise has a significant influence on the quality of accounting and control in general. Professionals know that without the ability to proper and quick assess business value it is impossible to get a wide middle class of owners, sustainable and dynamic market development, prevention of financial pyramids, economic lawlessness, investor mistrust and, as a result, creation of a legal and proper micro- and macroeconomic environment. The economies of Germany, France, the United States, Japan and other developed countries are based on this ability. Multi-factor economic and mathematical modeling taking into account microeconomic factors is carried out. It is proved that certain rates of development and increase of production efficiency at Ukrainian enterprises are possible provided the intensification of reproduction and better use of existing fixed assets of the enterprise, finding internal reserves for the growth of production efficiency, such as optimization of the structure of assets and the number of employees.

An empirical study on the factors influencing the performance of financial institutions in Zimbabwe

The main aim of this study was to empirically assess the main microeconomic factors that affect a bank's performance. The objectives were to ascertain if there is a relationship between the performance variables with the microeconomic variables, determine those that are significant and their impact on the performance of banks in Zimbabwe. An econometric model was built from balanced panel data and the Arellano-Bond estimation procedure was employed. The empirical analysis was carried out on a sample of 17 banks that were operational in the years 2010 to 2017 in Zimbabwe. Return on Assets (ROA), Return on Equity (ROE) and Net Interest Margin (NIM) were used as the performance indicators in the analysis. The results indicate the main microeconomic factors to be those attributed to growth, credit risk, capitalisation, managerial efficiency, liquidity and diversification in the Zimbabwean financial institutions. Performance in these institutions is generally good as measured by positive persistent profits, that is, ROA, ROE and NIM. These returns reflect the extent to which these institutions are resilient to the economic crisis.

Drivers of Profitability in Pakistan Stock Exchange (PSX) Through Du-Pont Equation

This research paper aims to investigate the impact of different components of Du-Pont model on firms’ profitability (1) on stand-alone basis, and (2) in the presence of different macro-economic factors. These components include profit margin, total assets turnover and financial leverage. Financial information from five different sectors of Pakistan’s economy comprising of automobile, cement, fertilizer, oil and gas and power & distribution was collected for years ranging from FY2011 to FY2017. Few macro-economic factors such as Exchange Rates, GDP, Inflation, and Interest rates are also taken into consideration. In this paper, LS and GMM regression models have been implied on Du-Pont model (financial ratios)and the results indicate that profit margin is a major driver of profitability among all the other factors of Du-Pont across various economic sectors of economy of Pakistan. Hence, the business managers should exert more focus on adjusting the micro-economic factors, perhaps profitability, while adapting to macro-economic factors.

Multi-scale decomposition of energy-related industrial carbon emission by an extended logarithmic mean Divisia index: a case study of Jiangxi, China

Our objective has been to decompose the energy-related industrial carbon emissions (ERICE) from both the macroeconomic and the microeconomic scales using an extended logarithmic mean Divisia index (LMDI), which few scientists have applied, for Jiangxi, China, over the period of 1998–2015. The macroeconomic factors were output, industrial structure, energy intensity, and energy structure. The microeconomic factors were investment intensity, R&D intensity, and R&D efficiency. It was found that output, R&D intensity, and investment intensity were mainly responsible for the increase of the ERICE, and their average annual contribution rates were 33.212%, 9.537%, and 4.200%, respectively. However, considering the infeasibility of decelerating industrial activities related to these three drivers, the development pattern of a circular economy was promoted. Then, the driving effect of the energy structure was the weakest (0.017%). Nevertheless, the potential of energy structure optimization to improve energy efficiency in Jiangxi should be given sufficient attention, e.g., greatly reducing the use of coal. Inversely, the R&D efficiency, energy intensity, and industrial structure presented obvious mitigating effects on the ERICE (− 13.737%, − 11, 652%, and − 7.804%, respectively). Therefore, some regulatory policy instruments have been recommended. For example, carbon reduction liability and carbon labels related to R&D investment should be implemented to encourage industrial firms to improve their energy efficiency. Then, reducing the energy intensity unceasingly while inhibiting the possible rebound effect should serve as a long-term strategy for the local government. Last, the potential mitigation effect of industrial structure optimization should be given sufficient attention when designing related reduction policies. Particularly, the top five energy-intensive subsectors S33 (Production and Supply of Electric Power and Heat Power), S23 (Smelting and Pressing of Ferrous Metals), S17 (Processing of Petroleum, Coking, and Processing of Nuclear Fuel), S22 (Manufacture of Non-metallic Mineral Products), and S1 (Mining and Washing of Coal) should be given priority.

IPO as a VC-Funds Type of Exit

The key characteristic of private equity finance is that investors hold their investments only for a limited period of time. The key goal of VC funds is to grow the company to a point where it can be sold at a price that far exceeds the amount of capital invested. This process is called an exit or divestment. There are three basic types of exits: going public, being acquired by a larger corporation, a sale to a third-party investor.It is a widely believed and accepted proposition in private equity literature that the initial public offering of a private equity portfolio company is the most successful and profitable exit opportunity. However, according to the few sources of literature, public offerings are not the preferred divestment type for venture capital firms. Going public is one of the most critical decisions in the lifecycle of a firm. This is not easy, as the process is very comprehensive and complex. Hence, a lot of considerations should be taken into account. Because every investee firm is different, a development plan to achieve a successful exit takes into consideration a number of macroeconomic and microeconomic factors. Moreover, several advantages and disadvantages of exit through an IPO could be indicated. The objective of this paper is to show the success and profitability of going public by VC funds. The VC’s exit type as a way of cashing out on its investment in a portfolio company is a consequence of the exit strategy, which means the plan for generating profits for owners and investors of a company. While an IPO is the most spectacular and visible form of exit, it is not the most common one, as historically in the US it was, but still in Europe it has not been yet. There will be both literature and statistical data coming from different studies and reports used in this research.

System characteristics of the publishing process

The article deals with the systemic characteristics of the publishing process in the publishing industry of the national economy. The stages of the modern publishing process in the publishing industry are explored. The application of the system approach, which provides an opportunity to carry out research of the management process in the publishing industry, is considered, taking into account not only the individual individuality of any element, but also their functioning in the interconnection under the influence of macroeconomic and microeconomic factors. The optimal combination of elements of the internal environment in the publishing process is substantiated. Formulated principles that provide the optimal combination of elements of the internal environment in the publishing process. The functional segments of the internal environment of the publishing process are determined. The direction of analytical and informational support in the publishing process is singled out. The synthesized substantiation of the development potential of the publishing industry is developed. It is substantiated that the efficiency of the publishing process can be increased due to the coordination of the coordination and regulation paradigm. The methodological basis of the paper is the complex of methods, including methods of scientific cognition, analysis and synthesis, systematization and scientific abstraction. The information basis of the conducted researches is the scientific work of domestic and foreign scientists in the field of realization of market strategies in the subjects of the national economy. The conceptual approaches to the development of a program for the implementation of strategic goals in the food industry are formed. The proposed approach provides an opportunity to explore the process of developing a program for the implementation of strategic goals in the food industry, taking into account the provision of a system that includes principles, criteria, parameters, constraints and appropriate direction, factors of influence and their coherence, which will allow to identify alternative ways to achieve strategic goals and form methodological and resource support for the purpose of obtaining effective results subject to specified parameters. Practical importance of the application of control and controlling system, which will ensure effective management of the publishing process, is proposed.

Revisiting Public Support for the Euro, 1999–2017: Accounting for the Crisis and the Recovery

AbstractThis article explores the evolution and determinants of public support for the euro since its creation in 1999 until the end of 2017, thereby covering the pre‐crisis experience of the euro, the crisis years and the recent recovery. Using uniquely large macro and micro databases and applying up‐to‐date econometric techniques, the authors revisit the growing literature on public support for the euro. First, we find that a majority of citizens support the euro in nearly all 19 euro area member states. Second, we offer fresh evidence that economic factors are important determinants of change in the level of support for the euro: crisis reduces support while periods of recovery from unemployment bode well for public support. This result holds for both macroeconomic and microeconomic factors. Turning to a broad set of socioeconomic variables, we find clear differences in support due to education and perceptions of economic status.

The financial sustainability of local authorities in England and Spain: a comparative empirical study

In recent years, the financial sustainability of local authorities has been recognised as a concept of crucial importance in ensuring that public services may continue to be delivered to future generations. Although many European countries have implemented programmes to enhance their financial sustainability, local authorities are characterised by differing administrative traditions and achieve diverse outcomes in response to the reforms made. Taking a comparative approach, the present study identifies institutional, macroeconomic and microeconomic factors that might influence local authorities’ financial sustainability in England and Spain in order to determine and explain similarities and differences in the drivers and risk factors for financial sustainability in local authorities’ provision of public services. Points for practitioners This article is based on three major theories (agency theory, neo-institutional theory and stakeholder theory) related to the institutional, macroeconomic and microeconomic factors determining financial sustainability and aims to identify these factors comparing different contexts (English and Spanish contexts). This identification of factors that influence municipal financial sustainability could clarify what policymakers might have done to prevent the crisis, what they should do to prevent similar failures in the future and how the long-term provision of public services may be ensured.

THE EFFECT OF MICROECONOMIC FACTORS ON BUSINESS MODELS IN FINTECH INDUSTRY

The variety of financial technology (FinTech) companies and their activities poses heterogeneity in the business models of them. Not only the business environment has been changing rapidly, the financial services sector influences and triggers changes as well. And it is hard to determine whether and which changes influence the business model disruptively and which evolutionary. To enable management decision making easier, methodology for identification of possible microeconomic risks and their influence on the current activity and the whole business model of the company has to be shaped accordingly. The aim of this research is to find out what and how microeconomic factors affect business modelling of the FinTech companies. In this research the authors used a continuous comparative analysis method as well as content analysis method [1]. In interviews, experts were asked to assess the significance of specific microeconomic factors by using the Likert's scale. As a result of the research, the difference of the influence as well as their dependencies and modifications on business modelling was determined. This result forms the basis for conclusions about the most important microeconomic impact factors, the areas of their influence and possible consequences that affect business modelling of the FinTech company.