Number Of Investment Opportunities Research Articles

Analysis Tools of Connecting Investment Opportunities and Investment Means in the Area of Small and Medium-Sized Enterprises

1. Introduction Entrepreneurship is a form of investment in a number of investment opportunities. In a wider context, we can talk about various innovations taking different forms. Just starting a company is a form of investment, and so is its operation, investment in HR or market position, market development, development of new products, etc. An entity can be restricted in its use of investment opportunities, or even disabled, by various barriers. These barriers are closely connected to financing, either directly, via a budget restriction, or indirectly, via costs connected to overcoming these barriers. Small and medium-sized enterprises are at a disadvantage, compared to big companies, and many investment opportunities are not taken advantage of, due to these barriers. SMEs are hugely important for the entire economy. For example, in the UK the sector of SMEs represents 99% of businesses and employs 81.6% people (The Telegraph, 2014). Worldwide, according to OECD, SMEs represent 95 to 99% of companies in different countries and represent 60-70% of jobs (OECD, 2006). Considering the importance of the SMEs segment, there are various forms of support, whose purpose is to eliminate this disadvantage, and to enable the implementation of investment opportunities also to entities, that do not have the relevant financial and operating capacities. This is a beneficial activity, however, fairly demanding in itself, and not fully suitable for small or starting businesses. Concurrently, there are many ways of how to fund these businesses in an innovative market method. This paper shows the opportunities and barriers associated with the use of a financial market in this area. 2. Literature Review The issue of connecting investment means and investment opportunities is similar to the general issue of sharing restricted resources. Therefore, the source literature focuses either on sharing wealth (Moulin, 2003), or the theoretical issue of dividing shared water resources that is resolved using similar methodology as when dividing financial resources (Houba, 2013), (van den Brink, 2011). The importance of small and medium-sized enterprises is supported by various articles (The Telegraph, 2014) and OECD publications (OECD, 2006). The theoretical basis and the importance of barriers for establishing a company strategy is based on a model by M. Porter (Porter, 1998), and specific examples are drawn from specific research (AMSP CR, 2014) and (Hashi, 2001). 3. Barriers to Market Entry Barriers to market entry are one of the factors determining the power of competition on the market. These aspects are analysed by the Porter model of five forces (Porter, 1998 p. 5) for the category of risk of potential competition entry. The more barriers are built, the less competition forces affect the existing companies. These barriers have many forms and are created both intentionally, by the existing companies, or as part of company organisation, etc. The barriers can be divided into the following categories and examples: * Natural (Geographical restrictions, Access to natural resources, etc.) * Know-how and Experience (Know-how, Experience, Contacts, Processes, etc.).) * Financial (Investment Demands, Access to Adequate Financing, etc.) * Legal (Purposeful Legal Disputes, Complexity of Law and its Ignorance, Predictability of Judicial Decisions, etc.) * Administrative (Rules and Instructions, Regulations, etc.) * Operational (Savings based on Volume, Access to Distribution Channels, Transaction Costs, etc.) Barriers generally protect existing companies on the market that have had the chance to adapt to the environment over time and become financially strong and have the means to overcome obstacles quickly. However, the list clearly shows that not even established companies have it easy--they just have a certain advantage which they have to maintain. …

Impact of Foreign Aid on Foreign Direct Investment in South Asia and East Asia

This study analyzes the impact of foreign aid on foreign direct investment (FDI) inflows in selected countries in East Asia and South Asia – two regions that have received huge foreign aid as well as FDI inflows. Theoretically, foreign aid can either facilitate FDI by funding projects that raise the marginal productivity of capital, or crowd out FDI as the number of investment opportunities in developing countries is usually limited. Using the FGLS (Feasible Generalized Least Squares) panel estimation methodology with 1995–2012 panel data from 7 East Asian and 7 South Asian countries, this study finds that the impact of foreign aid on FDI is significantly positive and robust across several model specifications. The estimated results also suggest that FDI is significantly affected by corruption control, rate of return, infrastructure, human capital, market potential, and political stability, and East Asia enjoys a locational advantage in attracting FDI vis-a-vis South Asia. These results further our knowledge of the foreign aid-FDI dynamics in developing countries.

A non-linear programming model for insurance company investment portfolio management in Nigeria

As the crucial mainstay for insurance industry to survive and develop, the insurance investment enables insurance companies to offset their possible underwriting losses and make a considerable profit. There have been many issues that affect the investment of Nigeria insurance companies. These include lack of investment vehicles, low rate of return on investment, unstable policies from the regulators and irrational investment portfolio. All these factors combined have restricted the development of Nigeria insurance industry. This study combined an 'expanded Lagrangian' function with a modified trust region method to propose a method for solving investment portfolio management problems of insurance companies. The proposed method was implemented on the portfolio management problems of a group of insurance companies. The study offers alternative solution to portfolio investment management by implementing best processes for minimising the risk for a given expected return, which is generally a non-linear function. It devised a means of asset allocation among a number of investment opportunities in achieving the investment objectives of insurance companies.

Valuation of a Power Plant with the Real Options Approach

Since the late 1990s, the Brazilian electric power industry has been undergoing significant structural changes, the main objective being to increase competition and attract private investment. Due to this, the National Electric Energy Agency has offered a large number of investment opportunities through auctions of the right to build and operate power plants (mostly hydroelectric) and transmission lines, including small hydroelectric plants.In this article we propose a valuation model for a power generation plant under uncertainty and with the flexibility to choose the optimal power purchase agreement using the real options approach, and then apply this model to the case of a small hydroelectric plant. The results indicate that the flexible project has a value significantly greater than that obtained through traditional discounted cash flow methods.

Is Tax Competition Harmful?

One of the benefits of globalization is that it is bringing economies closer together. As trade and investment barriers fall, investors are able to take advantage of an ever increasing number of investment opportunities. That sounds like good news, doesn’t it? The problem with this scenario, if you are one of the bloated, high-tax Western European welfare states, is that you are witnessing an exodus of investment capital to jurisdictions that are more tax friendly. Corporations that are headquartered in one of these high tax countries are increasingly exercising their options to invest elsewhere. The result is a loss of jobs and tax revenue to the high tax jurisdictions and an influx of capital, jobs and economic growth to the countries that offer lower corporate tax rates.

On Capital Investment

We deal with the problem of making capital investments in machines for manufacturing a product. Opportunities for investment occur over time, every such option consists of a capital cost for a new machine and a resulting productivity gain, i.e., a lower production cost for one unit of product. The goal is that of minimizing the total production costs and capital costs when future demand for the product being produced and investment opportunities are unknown. This can be viewed as a generalization of the ski-rental problem and related to the mortgage problem [3]. If all possible capital investments obey the rule that lower production costs require higher capital investments, then we present an algorithm with constant competitive ratio. If new opportunities may be strictly superior to previous ones (in terms of both capital cost and production cost), then we give an algorithm which is O (min{1+log C , 1+log log P , 1+log M }) competitive, where C is the ratio between the highest and the lowest capital costs, P is the ratio between the highest and the lowest production costs, and M is the number of investment opportunities. We also present a lower bound on the competitive ratio of any on-line algorithm for this case, which is Ω (min{log C , log log P / log log log P , log M / log log M }). This shows that the competitive ratio of our algorithm is tight (up to constant factors) as a function of C , and not far from the best achievable as a function of P and M .

Some Problems in Applying the Continuous Portfolio Selection Model to the Discrete Capital Budgeting Problem

Capital budgeting can be described as the problem of allocating scarce capital among a number of investment opportunities in such a manner that the outcome most preferred by a decision maker will result. When a single, mathematically explicit criterion is assumed, mathematical programming techniques can be applied. However, a single criterion, such as maximizing the return on investment or minimizing the risk of losing a sizable fraction of the original investment, is not appropriate for a significant number of real-world decision makers for whom two or more criteria, e.g., a judicious combination of return on investment and risk, are important. It has been argued [1] that it is usually not possible to obtain an explicit utility function for the decision maker and, consequently, that it is usually not possible to apply conventional (optimizing) mathematical programming techniques to find the most preferred outcome.

Investment Evaluation by Present-Value Profile

Introduction There is a trend today for business enterprises to be more thorough in their approach toward making capital expenditure decisions. Correspondingly, there has developed a large volume of literature dealing with problems connected with the analysis of capital expenditure proposals or opportunities. Much of the literature describes methods of preparing economic data for analysis; recently, however, there have been many papers on the subject of measuring the worth of the investment opportunity. This paper deals with both areas. It attempts to describe methods useful to the analyst in presenting economic data to management. It is believed that these methods provide optimum utility for decision making. The paper also describes the limitations of the methods and the ways they might be viewed or interpreted by management in various financial positions. The prosperity of the petroleum industry, perhaps as much or more than any other industry, is dependent on the efficient employment of its capital. This particularly is true in the producing end of the industry because a large part of its assets are continuously being depleted and must be replaced by additional capital expenditures. It has been estimated that capital expenditures for the domestic industry as a whole will exceed $7 billion during 1959, and that drilling and producing investments alone will amount to $4.5 billion. Thus, investments in producing and drilling operations will exceed $12 million daily, on the average. It is readily apparent that management is confronted with a tremendous job in making decisions on a vast number of investment opportunities. Oil industry executives usually rely upon economic analyses prepared by staff groups, particularly geological and engineering staff groups. The economic analysis normally is based on engineering or geological studies of the particular venture, which are usually highly complicated and contain many assumptions. Assumptions are necessary when certain data are unavailable or for the inclusion of future aspects into the analysis, and these assumptions always result in a degree of risk. Management normally attempts to evaluate risk by understanding the mechanics of the technical study; however, the economic analysis, to be complete, should provide for the measurement of the risk factor as well as the profitability.