Poor Investment Research Articles

Output response at the farm level: Maize supply and input demand in Kaduna State, Nigeria


 
 
 The degree of responsiveness of agricultural supply to input either in the short or long-term production decision is crucial in understanding the role of price and non-price factors in increasing supply. This study analysed output supply and input demand of maize production using a farm survey data of 600 randomly selected maize farmers from all agricultural zones in Kaduna State of Nigeria. Data were analysed using a modified Nerlovian model and set of input demand equations. The results showed that in all estimates (yield and hectarage) long run estimates are greater than the short run values and both were inelastic. The elasticity for lagged own price of maize was 0.23% in the short run and 0.17% in the long run were positive, marginal and inelastic. The hectarage elasticity of supply response for maize is 1.04 in the short run and 0.78 in the long run. The result of the input demand equations showed that the coefficients cost of agrochemical and farm size statistically affect seed, fertilizer and labour demand. The study portrayed that the most critical issues in maize supply are the lack of improved production technology, poor capital investment, land unavailability or poor land tenure system and poor policy incentives. The study recommends that, there is a need for State policy on agricultural research and extension, and adequate input price policies. The government is advised to dissolve the agricultural extension service system to local governments. This will allow agricultural extension system to be more location specific.
 
 

It's a Small World: The Importance of Social Connections with Auditors to Mutual Fund Managers’ Portfolio Decisions

ABSTRACTWe find that mutual funds whose managers are socially connected with firm auditors hold more shares of these firms and generate superior portfolio returns. Cross‐sectional results reveal that the relation between social connections and mutual fund stockholdings is more pronounced: when the social connections are stronger, when the auditor is in a better position or has stronger incentives to acquire private information, when the fund manager exercises more power, for small audit firms, for auditors in areas with poor investor protection, and for public firms with greater business opacity or private information. Other results are consistent with fund managers electing to schedule their corporate site visits to coincide with the fieldwork of their connected auditors, as would be expected if fund managers time their visits to meet with these auditors to facilitate information transfer. Additionally, we observe associations between fund trading prior to earnings surprises and audit opinions, and the presence of social connections between fund managers and firm auditors. Finally, we show that mutual funds and firms in which they invest tend to appoint connected auditors and pay them higher fees. Collectively, we document empirical patterns that would arise if socially connected auditors and mutual fund managers share information.

Discussion of “Obfuscation in mutual funds”: The role of financial advisers

The authors find that disclosure complexity strongly negatively relates to S&P 500 index fund returns. Because those returns are largely determined by fund fees, their evidence suggests that fund managers obfuscate to drive mutual fund investors into poor investment choices. However, the use of a passive (indexed) investment strategy can overlap with another prominent feature of the mutual fund industry: financial advisers (i.e. “money doctors,” Gennaioli et al., 2015) who assist with investment planning and implementation. The overlap can generate perverse inferences of consumer choice – seeming indifference to substantially different fees for substantially similar investments. The evidence suggests that obfuscation plays an important supporting role in the symbiosis between mutual funds and financial advisers.

Financial background of controlling shareholder and corporate financialization

ABSTRACT This paper studies the effect of the controlling shareholder’s financial background on the corporate financialization. We find that controlling shareholder’s financial background has a significant positive impact on corporate financialization, and the positive impact is more obvious in credit advantage firms and firms with poor institutional environment and real investment environment. Firms with financial controlling shareholders will increase long-term value reserving financial investment, and firms’ financialization trend with lower financing constraints is more sensitive to controlling shareholders’ financial background, suggesting that speculating is the essential motivation of firms’ financialization, rather than precautionary saving. The mechanism test shows that controlling shareholder’s financial background mainly promotes corporate financialization by increasing the financial long-term equity investments at the parent company level. Finally, there is an inverted U relationship between corporate financialization and investment efficiency, and the marginal effect of corporate financialization on investment efficiency is greater in firms with financial shareholders.

Firms' innovation strategy under the shadow of corporate social responsibility disclosure: Evidence from China

This paper examines how corporate social responsibility (CSR) disclosure impacts innovation using a sample of Chinese firms. We find that an increase in CSR disclosure leads firms to invest more in R&D investments and generate more patents. Additionally, our findings reveal that firms with high CSR disclosure nurture innovation by engaging less in short‐termism activities that crowd resources for innovation. Furthermore, we uncover that CSR disclosure promotes the optimum allocation of R&D expenditure by allocating risky capital towards good investment opportunities and away from poor investment opportunity sets. In addition, we show that CSR disclosure promotes innovation through information and human capital channels.

Gender Impact on Personal Investment Strategies

Abstract Research purpose. This study is dedicated to investigating the peculiarities of personal investment decisions among female and male investors to analyse the gender differences that occur during personal investment strategy establishment processes. This study is based on the literature research and aims at exploring the existing knowledge on financial behaviour and gender influence on personal investment selection. The importance and originality of this study are that it assesses the collective evidence in the personal investment field and explores its processes through the prism of gender impact. The understanding of the gender bias impact on the personal investment strategy development process can play an important role in addressing the issue of gender inequality in finance and investment areas. This paper is dedicated to answering the question of how gender impacts personal investment strategies. Design/ Methodology/ Approach. The major task was to conduct the research on the male and female personal investment decision peculiarities presented in literature sources and to prepare the survey to conduct practical research while applying theoretical knowledge and presenting the findings along with the suggestions on how to improve the female situation in investment field. Findings. The most prominent finding to emerge from this study is that females lack knowledge and understanding in finance and especially investment areas; therefore, this leads to inadequacy in self-confidence in finance and investment matters and, as a result, neglect of successful personal finance management and, more significantly, poor investment strategy decisions. Originality/ Value/ Practical implications. The main goal of the current study was to determine whether the gender difference exists in personal finance and especially investment area, to refine the reasons behind this phenomenon, to analyse what could be done to improve the situation and introduce suggestions for further research. The research was done based on relevant literature, reports, surveys, statistical data used for literature analysis, and Lithuania’s case study for the practical part of the research. The primary objectives were to find out what are the main peculiarities between males and females when it comes to personal investment strategy choices and to analyse financial literacy and investment fields through the female perspective. The main points revealed during this study were that men tend to invest more often than women, as females, in general, prefer to save rather than invest; women tend to choose less risky investment strategies compared to men or save rather than invest. The main factors of this phenomena are the influence of cultural, social, or psychological factors, low financial literacy level, differences in economic status, longer life expectancy, the lack of confidence when it comes to knowledge applied to the financial decisions; males are more likely to choose a higher-risk investment strategy and to be more confident in their investment ability even if they have less knowledge on the matter. The analysis of Lithuania’s case has also confirmed the main literature review findings and reported females to lack financial and investment knowledge, spare funds and prefer to save rather than invest or invest into the low-risk tools.

Project Valuation: Price Forecasts Bound to Discount Rates

For their appraisals, most companies use discount rates that account for timing and riskiness of projects. Yet, especially for commodity projects, discounting future cash flows is generally at odds with the assumptions in a company’s hurdle rate. With a multitude of technical and market uncertainties, inconsistent assessments lead to biased valuations and poor investment decisions. In this paper, we consider price forecasts and discount rates in an integrated framework. We calibrate the risk premiums in a two-factor stochastic price process with a capital asset pricing model-based discount rate. Together with the analysts’ long-term prices forecasts, the suggested method improves consistency in valuation and decision making.

Development and Performance of the Pepper Industry in Malaysia: A Critical Review

The National Commodity Policy 2011-2020 was developed to increase the national income by harnessing the potential of commodity export revenues. Despite continuous efforts implemented by various related agencies, the overall performance of major commodities, particularly pepper, remains unsatisfactory. Regarded as a sought-after ‘king of spices’, pepper has become one of the most prized and important commodities traded globally. This paper highlights the development and performance of the pepper industry in Malaysia and discusses practical strategies and recommendations to transform the pepper industry. Besides conducting interviews with the industry experts to gain first-hand information, content and thematic analysis was employed based on secondary data research in this study. The findings of the study show that even though pepper is mostly used in food-related industries, its potential in pharmaceutical and cosmeceutical sectors remains underexplored. Globally, the overall supply and demand of pepper continue to increase, though the demand has recently exceeded supply. However, continuous new planting and farmexpansion initiatives by major producers caused the total global pepper supply to exceed consumption in 2018. In fact, pepper prices have declined more than 70% since 2015, which affected the overall household income of the rural community engaged in pepper farming. While experiencing low prices, smallholder pepper farmers and the industry continue to struggle with low domestic consumption, low production, higher cost of farm inputs, lack of extension services, low impact of research, development and innovation, ageing farming population, intense competition from other producing countries, low prices for quality pepper, limited subsidy to support continuous farming, pepper-related diseases, lack of new technology, and poor investment in downstream activities. Given this, the performance of the Malaysian pepper industry has fallen below expectations.

Poor investment and limited research positions in biomedical research: Challenges for young researchers in Mexico

• Austerity measures of Mexican government puts scientific research in a hard situation. • There are insufficient research positions, both in academy and industry. • Public and private sectors give little value to science as a route for national development.

A hedge fund collapse and diversification 101: lessons to stakeholders

PurposeThe purpose of this paper is events and analysis of present a hedge fund collapse, offer lessons to investors and hedge fund industry stakeholders and propose a possible remedy for mitigating operational risks and associated potential losses.Design/methodology/approachThis study focused on one hedge fund case study and conducted a thorough investigation of the events that led to the collapse and eventual filing of the Securities and Exchange Commission (SEC) complaint. All articles and publications used for this research are available in the public domain and accessible.FindingsWood River Capital Management had concentrated the portfolios of its two hedge funds into one stock, EndWave Corp. Fund Manager violated terms of offering memorandum. Investors were not made aware of and did not discover the operational risks. Stock price of EndWave plummeted. There was no independent oversight over the funds. The values of the two funds dropped significantly. Investors attempted to redeem but the funds were not liquid. The SEC filed a complaint. Mr Whittier was sentenced for three years in jail.Research limitations/implicationsIt is an analysis of US-based hedge fund, not an empirical paper. The article presents critical analysis and offers many valuable lessons to hedge fund industry stakeholders.Practical implicationsThis paper helps investors in terms of identifying a hedge fund’s operational risks and conducting more effective due diligence while vetting a hedge fund. This could potentially save investors and constituents billions of dollars, by avoiding potential hedge fund collapses. This paper suggests that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.Originality/valueThorough research of a hedge fund that collapsed because of poor investment decisions, not self-enrichment at expense of fund investors. This paper provides lessons to investors in terms of identifying a hedge fund’s critical operational risks and conducting value preserving due diligence. This could potentially save hedge funds investors billions of dollars, by avoiding potential hedge fund collapses. This paper recommends that the scope of fiduciary duty be expanded to cover hedge fund industry vendors.

Electricity and Biofuel Production from Biomass in Nigeria: Prospects, Challenges and Way Forward

Nigeria currently produces less energy required for uninterrupted electricity supply. This situation has led to an energy crisis that is adversely affecting every sector of the economy. An exploration of energy contributions from different sources could help address the energy crisis in Nigeria. This paper aims at promoting the commercial availability of electricity from biomass in Nigeria. The biomass potentials identified include conventional crops, agricultural residues, tertiary residues; forest residues; energy crops; grasses and aquatic weeds including algae. Conversion of biomass to bioenergy can be achieved through anaerobic digestion, gasification, pyrolysis or esterification. Although the prospects are bright, challenges facing bioenergy in Nigeria, include inadequate information on feedstock; uncomprehensive research and development capacity; poor policy formulation and implementation; poor regulatory framework, poor investment climate and poor access to technology. An integrated approach is recommended to include the establishment of Nigerian Biofuel Corporation under a Public-Private Partnership (PPP) arrangement and a Nigerian Network on Bioenergy.

Innovation Challenges in South Asia: Evidence from Bangladesh, Pakistan and India

In literature, the implications of resource constraints for innovation outcomes are conflicting. A broad body of empirical research focuses on the negative impacts of such constraints, most of which use data from advanced economies. However, recently some scholars argue that in emerging economies, innovation occurs in spite of and even because of the poor investment environment. Using firm-level data from South Asia, which provides a good natural example for such poor investment environment, and where innovation tigers like India continue to thrive, we investigate whether internal barriers such as lack of human capital and financial capital are indeed barriers for firms in the region. Our findings for India provide empirical support for the literature on resource-constrained innovation, while results for Pakistan support earlier contributions within the conventional innovation literature. For Bangladesh, however, neither human nor financial resources but firm-characteristics such as size and foreign ownership promote innovation more. Findings are validated across sub-samples of small and medium-sized enterprises and non-exporters, which are more likely to face such constraints.

Equity ownership and corporate transparency: International evidence

This paper investigates the effect of insider ownership on stock price synchronicity. Specifically, for countries with poor investor protection, the managerial entrenchment effect dominates. When ownership increases, synchronicity increases at an increasing rate. However, for countries with strong investor protections, managerial entrenchment effect only dominates the incentive alignment effect when controlling ownership increases initially. As controlling ownership continues to increase, the incentive alignment effect becomes stronger and the net effect is reversed, leading to a more transparent firm. Additional tests reveal that financial reporting framework and insider trading law enforcement are crucial external governance channels affecting stock price synchronicity.

Stimulating Domestic Demand as a Key Factor of Economic Growth

World economy shows a high level of uncertainty. There are considerable risks of economic slowdown and stock market collapse. For many years, the Russian economy has been dependent on external factors. Recently, when anti-Russian sanctions are imposed, it is particularly important to find internal sources of growth, including domestic demand as the most significant factor. However, environment for the development of the Russian economy remains unfavourable due to high interest rates, volatile exchange rate, increasing tax rates, and ambiguous economic policy. Based on the analysis of regional statistics (including some regions of the Central Federal District), we confirmed the weak relationship between investments and gross regional product (GRP) revealed by other scientists. This may be the result of poor investment efficiency and its low multiplier effect. In this situation, the right choice of sectors with high multipliers and investment efficiency creates the potential for increasing domestic demand. Simultaneously, mechanisms for the expansion of resources ensuring regional economic growth play an important role. In this regard, we developed approaches aimed at the creation of conditions for the expansion of regional financial resources to support economic activity, domestic demand and economy in general, considering a social aspect of these processes. Some of the proposed mechanisms stimulate the participation of banks in financing economic processes, federal or regional bond issuance (the Bank of Russia would be the main buyer), etc. These proposals consider the experience of other countries in stimulating economic growth, including at the regional level. Financial regulators and relevant regional agencies can use the research results for developing economic policies.

Liquidity Synchronization, Its Determinants and Outcomes under Economic Growth Volatility: Evidence from Emerging Asian Economies

This study investigates the country-level determinants of liquidity synchronization and degrees of liquidity synchronization during economic growth volatility. As a non-diversifiable risk factor, liquidity co-movement shock spreads market-wide and thus disrupts the overall functioning of the financial market. Firms in Asian markets operate in legal and regulatory environments distinct from those of firms analyzed in the previous literature. Comprehensive analyses of liquidity synchronicity in emerging markets are limited. A major knowledge gap pertaining to Asian emerging markets serves as the primary motivation for this study. Seven Asian emerging economies are selected from the MSCI emerging market index: Bangladesh, China, India, Indonesia, Malaysia, Pakistan and the Philippines for analysis from 2010 to 2019. The empirical findings show high levels of liquidity synchronicity in weaker economic and financial environments with low GDP growth, high inflation and interest rates and underdeveloped financial systems taking the form of low levels of private credit. Liquidity synchronicity is also affected by poor investor protection, political instability, weak rule of law and government ineffectiveness. Moreover, levels of liquidity synchronicity are higher in a period of economic growth volatility.

Collaborative Teaching, Reading and Literacy

In Portugal, students read very little and a significant part of them has great difficulties in dealing with written information. The national and international student assessments regularly situate Portugal at the lowest levels of students’ performances. This means that in Portugal everything is still to be done in what concerns reading and literacy. The problem doesn’t have an easy answer but two of the main reasons are in the poor investment in school libraries and the absence of collaborative teaching. In fighting illiteracy and promoting reading habits, school libraries should take the lead and try to evolve three distinct groups: teachers, students and families. Organising regular reading sessions with students and parents, making books andreading a constant presence in the classroom and at home, using e-technologies to promote reading and writing or publishing a school newspaper are only some examples of what school libraries, teachers, students and families can do together inorder to develop literacy and reading in Portugal.

Digitalization and Integration of Sustainable Development Goals (SGDs) in Public Organizations in Kenya

This study mapped the role of ICT, digital platforms, the internet connectivity and skills of the personnel vis-à-vis implementation processes of SDGs in public organizations in Kenya. Findings show cross-cutting institutionalization and internalization deficits as a result of limited mastery of ICT skills and training of the personnel, insufficient ICT platforms, mainly, computers, poor internet connectivity and poor investment in digital platforms by the government institutions. An organizational culture that predisposes institutions to change resistance also constrained integration of SDG goals in public organizations. The article concludes by providing critical policy recommendations for addressing these problems.

Sports Stadiums and Local Economic Activity: Evidence from Cobb County, Georgia

Though most studies find that sports stadiums are not strong drivers of economic activity in metropolitan areas, localized development effects may be sufficient to justify public subsidies for a host municipality if circumstances are favorable. This analysis examines the economic ramifications of an intra-metropolitan area relocation of Atlanta’s professional baseball team from a traditional standalone downtown stadium to a new stadium-anchored mixed-use development in suburban Cobb County. Using the synthetic control method, the study employs metro-Atlanta counties to construct a counterfactual outcome for estimating changes in sales tax revenue after the ballpark opened. The findings indicate a net increase in taxable sales in the county; however, the magnitude of the effect is small and not statistically significant. Though net new spending is evident, approximately one-third of the project’s sales appear to derive from crowding out other local economic activity. In total, added tax collections fall well short of covering the public subsidies provided by Cobb. The stadium’s limited economic impact, despite its favorable location and ancillary mixed-use development, further supports past findings that sports venues are poor investments as economic development projects.

Model Development and Validation of a Dual-Axis PV Tracking System: A Case of South Africa

Dual axis photovoltaic (PV) tracking system is considered in general to be a poor investment. This is mainly due to the substantial initial investment costs that these systems carry. However, in recent years, solar panels and accompanying component costs have decreased significantly. Additionally, electricity price hikes in South Africa have compelled most of the country’s citizens to reconsider their sources of electrical energy. A popular alternative to grid energy in South Africa is the use of photovoltaic systems. Careful consideration is required when choosing from the various systems available on the market. The main method for maximizing the output power of these systems is to introduce solar tracking systems. Therefore, in this paper, a model of a dual axis tracking system is developed and validated against a real-world plant in the Bloemfontein region in South Africa. The presented model was observed to be accurate to within an error rate of 6.39%. Additionally, the performance of the inverters of the PV tracking systems were evaluated and discussed. The validated model may prove to be an excellent tool for energy managers to determine the feasibility of such systems, compared to conventional photovoltaic setups.

Shareholder Democracy Under Autocracy: Voting Rights and Corporate Performance in Imperial Russia

This paper investigates how the rules that corporations wrote for themselves related to their financing and performance in an environment characterized by poor investor protections, Imperial Russia. We present new data on detailed governance provisions from Imperial Russian corporate charters, which we connect to a comprehensive panel database of corporate balance sheets from 1899to 1914. We document how variation in votes per share and other shareholder rights provisions were related to corporate choices of using debt vs. equity and whether these governance provisions correlated systematically with performance measures on the balance sheet and in terms of the market-to-book ratio. This investigation reveals the tradeoffs weighed by Imperial Russian corporations and demonstrates the surprising flexibility that Russian corporations enjoyed, conditional on obtaining a corporate charter.