Quality Investment Research Articles

Social capital in the system of corporate sustainability

Social capital is a key factor in corporate sustainability in the ecosystem era. Analysis of the theoretical background reveals that social capital can function at all levels of economy – from the individual to the state. Therefore, social capitalis on the one hand an independent resource generating income. On the other hand, social capital provides access to the ecosystem actors’ resources.Oftentimes stakeholders underestimate social capital because of its intrinsic “public good” quality and limit investment in it. The ecosystem social capital structure includes several dimensions. The elements of each dimension are applied to strengthen the performance of corporate sustainability indicators.

PROBLEMS OF EVALUATION AND INVESTMENT ATTRACTIVENESS MANAGEMENT AT THE MACROECONOMIC LEVEL

Analysis of the dynamics of the movement and structure of investment resources allows us to determine how competitive a sector of the national economy is in attracting foreign investment and identify problems before they affect the related macroeconomic indicators. The article examines the factors influencing FDI inflows and their interaction with public authorities. Based on the data of the quality of political institutions (WGI), developed with the participation of representatives of the World Bank, a basis for assessing the investment attractiveness of Ukraine was formed. As part of a study of international experience in assessing investment attractiveness, the authors analyzed current approaches to assessing the impact of political institutions on the dynamics of FDI and concluded on the qualitative characteristics of political institutions. Due to the limited supply of quality investment resources, the study of the assessment of the investment potential of the national economy is an important aspect of the implementation of domestic socio-economic policy. The study of the dynamics of macroeconomic indicators of the economy of Ukraine allowed to form a set of indices that have a significant impact on decision-making by potential investors. The authors proposed an approach to determining investment attractiveness based on the analysis of the dynamics of quantitative indicators of the state of the economy and quality indicators of public administration. The proposed model allows to assess the impact of each of the factors on the dynamics of FDI, to identify problems that demotivate the inflow of investment resources and to develop recommendations for investment policy management at the state level. Analysis of the dynamics of the movement and structure of investment resources allows us to determine how competitive a sector of the national economy is in attracting foreign investment and identify problems before they affect the related macroeconomic indicators. The authors' approach to assessing investment attractiveness takes into account most of the main determinants of FDI. In the analysis of the literature, it was decided to take into account not only quantitative statistics, but also the results of a survey of experts, which should have avoided the bias associated with the problem of non-consideration of variables. Further development of improving the assessment of investment attractiveness of the country by updating the list of determining factors and indicators influencing the movement of FDI, and ranking of indicators of investment attractiveness using the methods of expert assessments.

Government regulation of the market for higher education

This paper presents a model of strategic competition between universities that accounts for the existence of positive spillover effect from education (peer effect). It was demonstrated that in the presence of peer effect strategic competition results in inefficient student allocation between the two universities (biased to the high-quality university) and excessive quality differentiation. The model is used to analyze the implications of government funding policies as well as admission and quality regulation. It was demonstrated that traditional schemes of institutional funding and students’ financial aid programs like tuition fee subsidy, quality investment subsidy, or total cost subsidy reduce social welfare. At the same time, an introduction of provision of tuition-free education for the best students combined with a per-student grant provided to the university improves both students’ and social welfare. It was also demonstrated that tight admission regulation is not socially desirable while the introduction of minimum quality standards makes society better off.

ESG-критерии в инвестировании: зарубежный и отечественный опыт

The evolution of financial instruments improves investment decision-making. Modern society requires additional information about companies' activities: standard financial statements and financial indicators no longer satisfy its needs. Environmental degradation, global warming, and the fight against poverty amid growing prosperity in developed countries — all these factors promote the development of new financial instruments and criteria. ESG provides the answer to these modern demands and can help evaluate companies' activities related to investment in sustainable development. Moreover, the application of these criteria enables companies to reduce risks and to create reputation, and helps investment funds make quality investment decisions. This trend, which has emerged and strengthened in developed foreign countries over the past 50 years, is penetrating emerging markets as well. This article investigates the role of ESG criteria in making investment decisions based on foreign experience. The leaders in socially responsible investment are the economies of developed countries: the USA, Canada, Great Britain, Germany, and Australia. As Russian companies seek international financing, they will have to compete for investors in foreign financial markets on their terms. Therefore, it makes sense to focus on following ESG criteria in their activities right now. Currently, there are a number of barriers to the implementation of ESG criteria in Russia: lack of understanding of the importance of socially responsible investments, lack of state standards in the disclosure of non-financial information, lack of large domestic investors (lack of competition on the pension insurance market as well), and the focus of Russian companies only on medium-term profits.

The effects of environmental quality misperception on investments and regulation

This paper analyzes whether consumers’ misperception on the quality of the product influences firms’ investment choices. We examine a setup with horizontal and vertical (green) differentiation, where consumers are heterogeneous in the exogenous perception of environmental quality. Demands, true qualities and profits are increasing in the perception of higher quality, while the investment in green quality is high for high and low degrees of product substitutability. We further consider the introduction of either an emission tax or an environmental standard. Both interventions increase the investment in green quality. We show that for low marginal damages, the environmental standard increases quality, while taxation is more effective when the environmental damage is large.

Influential Factors Responsible for Profitability: A Technical Study on Commercial Banks in Bangladesh

This paper explores how many internal and external factors from 2007-2017 affect the competitiveness of commercial banks in Bangladesh. Many bank-specific variables are used to achieve the goals as internal factors, and macroeconomic variables are used as external factors. A sample of seven commercial banks will be used for this purpose. Return on equity is used as a proxy for profitability and capital adequacy, the size of asset quality banks, investment control, liquidity, resource structure, and economic indicators are used as proxies for the independent variable. The paper's overview findings show that asset structure, capital adequacy, and asset quality are the key factors in Bangladesh's profitability for the commercial bank. The paper's outcome indicates that if commercial banks are more worried about these factors, they could produce a better return on the competitive market.

US Water Pollution Regulation over the Past Half Century: Burning Waters to Crystal Springs?

In the half century since the founding of the US Environmental Protection Agency, public and private US sources have spent nearly $5 trillion ($2017) to provide clean rivers, lakes, and drinking water (annual spending of 0.8 percent of US GDP in most years). Yet over half of rivers and substantial shares of drinking water systems violate standards, and polls for decades have listed water pollution as Americans’ number one environmental concern. We assess the history, effectiveness, and efficiency of the Clean Water Act and Safe Drinking Water Act and obtain four main conclusions. First, water pollution has fallen since these laws were passed, in part due to their interventions. Second, investments made under these laws could be more cost effective. Third, most recent studies estimate benefits of cleaning up pollution in rivers and lakes that are less than the costs, though these studies may undercount several potentially important types of benefits. Analysis finds more positive net benefits of drinking water quality investments. Fourth, economic research and teaching on water pollution are relatively uncommon, as measured by samples of publications, conference presentations, and textbooks.

Functional brand qualities and perceived value: The mediating role of brand experience and brand personality

AbstractBrand experience and brand personality have become two important theoretical constructs in the branding literature. However, research on the antecedents of these two constructs has been focused on intangible brand characteristics and qualities, underestimating the role of functional features. This study aims to overcome this gap by postulating that two key functional brand qualities, quality and innovativeness, help shape brand experience and personality, which, we ultimately predict, contribute to perceived value. Investments in quality and innovation have grown substantially, but how they materialize in benefits for customers and firms remains unclear. Accordingly, this study provides insights into how firms can engender the characteristics of their offer to build brands that are perceived by consumers as generating a valued brand experience and personality. The results from two samples provide broad support to the proposed model. Both brand quality and innovativeness contribute to brand experience and personality. Moreover, we observe that both brand experience and personality relate to perceived value. Finally, we also determined that brand personality and experience partially mediate the relationship between brand innovativeness and quality and perceived value. Hence, these results provide relevant implications for both theory and the practice of brand management.

Career Counseling Process Quality Promotes Reemployment

One-on-one career counseling has been established as the most effective type of career intervention. Prior research results have suggested that process quality determines counseling success. In this multilevel study, career counseling process quality is validated as a predictor of job seekers’ reemployment at three Swiss job centers. Supervisors’ evaluations of the process quality of mandatory counseling sessions predicted faster reemployment of the 444 counseled job seekers by 18.9 working days on average. This effect equals yearly savings of 418 million Swiss Francs CHF (US$ 422 million) in Swiss unemployment benefits. While in many countries, the counseling of the unemployed is predominantly an administrative process, the findings should encourage investments in process quality of career counseling to promote reemployment. Furthermore, the study calls for further research on the underlying factors of career counseling process quality and the respective career counselor behaviors.

Supplier development in a multi-tier supply chain

We examine how a buyer can use a full-control strategy and cost sharing to develop the sustainable quality capabilities of his tier-1 and tier-2 suppliers. In particular, we consider how the buyer’s development decisions and the suppliers’ sustainable quality decisions are impacted by consumers’ demand sensitivity to sustainable quality and the division of the supply chain margin. Two quality-demand models are studied – the overall quality of the supply chain equals either (i) the sum of or (ii) the minimum between the suppliers’ quality levels. We find that when the suppliers’ sustainable quality levels are additive, even if the low-margin supplier has a positive net profit return from improved quality, she may still choose to free ride on the high-margin supplier’s quality investment. Interestingly, the buyer can cause the free riding with his cost-sharing decisions. When instead, the overall sustainable quality is determined by the minimum between the suppliers’ quality levels, the buyer’s strategy is often to focus only on developing the low-margin supplier. Nevertheless, when the buyer’s market gain from improved quality is large and the suppliers’ gains are comparable to one another, the buyer can justify sharing costs with both suppliers and raising the overall sustainable quality of the supply chain to a level neither supplier can achieve without development support.

Managing supplier flexibility performance as a relational exchange investment in make-to-stock versus make-to-order production environments

PurposeThis paper aims to develop and test a model of buyer–supplier relational investment that links supply chain integration (SCI) to supplier flexibility performance (SFLEX) advantages in different manufacturing environments. Relational stability (RS) and information quality (IQL) are viewed as key indicators of intermediating commitment investments in supplier relationships to help support supplier accommodations for special requests for order flexibility. The model is applied to investigate the relative importance of manufacturer relational investments with suppliers in both make-to-stock (MTS) and make-to-order (MTO) production environments.Design/methodology/approachA survey of 206 US manufacturing firms was used to test the proposed research model using structural equation modeling and multiple-group analysis techniques.FindingsSocial exchange investments in relationship stability and information quality are found to fully mediate the positive performance relationship between supply chain integration and supplier flexibility performance for manufacturers. However, the relative importance of each form of investment in enhancing supplier flexibility performance varies based on the buyer’s (manufacturer’s) order fulfillment environment (make-to-stock versus make-to-order).Originality/valueThe proposed model may assist manufacturers make more informed relational exchange investments and supply chain configuration decisions that most conducive to enhancing supplier flexibility performance for different production environments.

Privacy Regulation and Quality Investment

This paper analyzes how a privacy regulation restricting data disclosure affects quality investment by a monopoly service provider - who derives revenues solely from sharing user data with third parties - and social welfare. In our model, a user's gross utility from the service depends on its quality and the amount of information shared. We show that in a fully covered market, the regulation reduces quality investment but may still be socially desirable when quality and information are not strong complements. In a partially covered market, the regulation may raise quality and social welfare even when quality and information are highly complementary

Contract manufacturer’s encroachment strategy and quality decision with different channel leadership structures

This paper considers a supply chain consisting of a contract manufacturer and an original equipment manufacturer (OEM). The contract manufacturer produces product according to the requirement of the OEM. The contract manufacturer has two encroachment strategies to choose from: building a private brand (PB) or not building a private brand (NPB). If the contract manufacturer chooses strategy PB, she decides the quality level and selling price of the private brand. This paper studies the contract manufacturer’s encroachment strategy and its impact on the OEM under OEM-Stackelberg setting (OS) and contract manufacturer-Stackelberg setting (CS), respectively. Analytic results are derived. When the quality investment cost factor is sufficiently low, the contract manufacturer will never encroach. However, when the quality investment cost factor is sufficiently high, the conditions under which the contract manufacturer will encroach are obtained. Numerical example shows that sometimes the encroachment of the contract manufacturer will harm the benefit of the OEM. Then the effect of channel leadership is studied. Numerical examples show that (i) The channel leadership does not impact the preference of both contract manufacturer and the OEM for the private brand. However, it can reverse the effect of the encroachment strategy on the wholesale price. (ii) The quality of the private brand in model CS is lower than that in the model OS. In model OS, the contract manufacturer has a pressure to provide higher quality for the private brand.

The benefit of collective reputation

AbstractWe study a model of reputation with two long‐lived firms who operate under a collective brand or as two individual brands. Firms' investments in quality are unobserved and can only be sustained through reputational concerns. In a collective brand, consumers cannot distinguish between the two firms. In the long run, this generates incentives to free‐ride on the other firm's investment, but in the short run, it mitigates the temptation to milk a good reputation. The signal structure and consumers' prior beliefs determine which effect dominates. We interpret our findings in light of the type of industry in which the firms operate.

Channel coordination through quality improvement with brand halo effect

Product quality depends on the quality investment of the manufacturer and quality decisions of the supplier. Therefore, many firms and researchers pay considerable attention to supply quality management. Considering a supply chain that includes two competing suppliers and one manufacturer, this paper investigates the influences of competition and the “brand halo” effect on the quality strategies of channel members, and explores the potential coordinating power of the bilateral participation contract. Utilizing differential game theory, this paper compares and analyzes the quality strategies of all channel members under three different scenarios: (i) decentralized scenario within a subsidy program, (ii) integrated scenario, and (iii) bilateral participation contract. Our results confirm the following results. (1) The manufacturer may not grant a subsidy to the supplier if two final products are highly competitive. (2) Supply chain members are more likely to join the bilateral participation contract if the “brand halo” effect is large. (3) The bilateral participation contract can achieve perfect coordination if the competition is weak or if a transfer payment policy exists.

Investment Decisions, Herd Behaviour and Retail Investors

Behavioral finance explains that cognitive biases influences investor decision making. Due to the influence of different behavioral biases investors do tend to make irrational decisions. Behavioral finance has highlighted the failure of traditional finance theories to account for human emotions when making investment decisions. While traditional finance theories disregard human element in decision-making, behavioral finance theories take into account the human phycology while explaining theories. Many studies have found and explained many biases that are exhibited by investors which lead to irrational investment decision making on their part. One among the many the biases herding can be considered among the most important behavior which leads to low quality investment decisions by investors. While compared to studies about herd behavior of institutional investors, the studies about individual retail investors in less. The motive behind this study is to clarify the role of demographic factors and psychological factors that influence herd behavior among individual investors. In this study the impact of demographics and psychological factors on herd behavior was studied. For this survey, primary data was collected using Judgment sampling technique and the results analyzed. Retail investors in Chennai exhibited herd behavior with regard to investment decisions. Eight factors were found to influence herd behavior.

Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment

Reference quality, as a benchmark against which the purchase quality of a product is judged, has an important impact on consumers’ purchase decision, especially perishable items. Thus, how to determine an appropriate quality investment and ordering strategies for perishable items to maximize retailers’ profit is an essential task. A joint dynamic quality investment and inventory replenishment problem for perishable items with consideration of reference quality effect is investigated, where the retailer sells its products using a combination of the offline and online stores, and the sales function is sensitive to products’ quality and consumers’ reference quality. The optimal control model is established to maximize the retailer’s total profit by making a joint quality and inventory strategy. The continuous time dynamic optimal quality investment and inventory replenishment strategies with reference quality effect are obtained by Pontryagin’s maximum principle. Numerical experiments are accounted for the key system parameters on the optimal strategies.

A Novel Template for Understanding Priced Factors

Asset managers are increasingly incorporating equity factors that deviate from traditional academic definitions in their stock selection process. We show that these factors frequently exhibit strong industry biases, making it crucial to understand the interaction between factor exposure and traditional industry exposure. Industry exposure plays a major role in the risk profile of a portfolio, making unintended industry exposures costly. For an extensive set of 21 equity factors, beyond the standard academic factors, we examine which equity factors are rewarded for their industry allocation. This set spans the value, quality, momentum, low volatility, and size investment styles. We use a global and liquid investment universe, as is commonly used by large institutional asset managers. We find that equity factors from the same investment style, most notably momentum and quality, exhibit strong differences in their returns from industry allocation. Understanding the interaction between factors and industry exposures can lead to higher return premiums, and lower portfolio volatility without harming performance.

The Enduring Path to System Success: Investment in Quality Early‐phase Systems Engineering

AbstractSystem stakeholders responsible for defining, delivering, and commissioning engineered systems often work in resource‐constrained environments. This means that it is not always possible to apply systems engineering processes as comprehensively as practitioners would like. The question then becomes where and when best to allocate systems engineering resources to maximize project success. A review paper that analyzed lessons learned twenty years ago highlighted inadequate early‐phase systems engineering effort as a major cause of project issues. This paper opens with a discussion of this review material and progresses to review contemporary materials. The conclusion drawn is that the quality of early‐phase systems engineering is as vital as ever to project success and that the recommended levels of expenditure on SE are unchanged. The newer work, however, provides us with important new information: guidance on the sorts of activities that provide the greatest payoff in the early stages of the lifecycle and what proportion of the SE budget should be allocated to each major area of activity. The foremost areas to resource are mission definition and project scoping, with systems architecting, technical analysis, and system design also featuring prominently. Requirements also features but not in terms of volume of effort rather in terms of the need to use good systems engineering and analysis to translate the high‐level originating needs (that rarely change) into the detailed technical requirements. Model‐based approaches are claimed to much better support early‐stage SE than older, document‐based approaches.

Positioning Technical and Vocational Education and Training for Sustainable Development in Africa Taking Cue from the Chinese Model

The general consensus among countries globally is that TVET plays significant role in economic development, but the increased awareness notwithstanding, provision of TVET in African countries is hampered by diverse constraints as many countries on the continent have not been able to make quality provisions for TVET at a level that can support quality training. The continent faces the enormous challenge of providing stable and sustained socio-economic development that will provide room to lift the young population out of poverty induced by unemployment and protect the continent from poverty-triggered insecurity. The development of Africa has been hinged on quality investment in human capital development in the face of the changing dynamics in the world of work and the future of jobs. In order to achieve this, it is imperative for African countries to adopt different approach to the delivery of TVET on the continent. The Chinese experience in delivery of TVET, built on sound policy framework, effective funding system coupled with rural development-driven TVET provision, robust TVET institution and enterprises linkage as well as consistent teacher training programme, provide a viable example for emulation in the design and implementation of effective TVET delivery that will guarantee sustainable development on the continent. Key Word : TVET, Development, Africa, China DOI : 10.7176/JAAS/56-09 Publication date :July 31 st 2019