Share Of Assets Research Articles

A Note on the Determinants of IFRS Policy Choice When Accounting for Non‐controlling Interest and Goodwill

This paper provides evidence on the choices made by European firms when measuring non‐controlling interest (NCI) and goodwill. Since 2009, IFRS 3 allows measurement of NCI either at fair value (full goodwill method) or at the proportionate share of net assets (partial goodwill method). IFRS 3 allows this policy choice on a per transaction basis. Our data comprise 188 hand‐collected firm choices in connection with business combinations with remaining NCI, between 2010 and 2016. We use the theoretical framework developed by Stadler and Nobes (2014) explaining differences in firms’ choices of overt accounting options by country, industry, and firm‐specific topic factors. Based on univariate and multivariate analyses, we find that transaction‐specific and firm‐specific topic factors influence accounting policy choice, whereas country and industry factors do not. The choice has different effects on financial leverage and operating returns, which inform firm‐level preferences. Regarding choices made at the transaction level, we find acquirers with an intention to buy additional shares from non‐controlling shareholders tend to prefer the full goodwill method. Thus, the choice of accounting method conveys information to users about future additional acquisitions and has implications for standard setters, indicating that offering choices at transaction level may increase the forward‐looking content of financial statements.

ЕВОЛЮЦІЯ ДЕРЖАВНОГО БАНКІВСЬКОГО СЕКТОРУ УКРАЇНИ

Introduction. During the period of independence, several state-owned banks operated in Ukraine – from two in the 2000s to seven in 2013-2014 and 2024. Until 2008, the state’s share in the banking sector's assets was insignificant and amounted to approximately 6%. Since then, the share of state-owned banks has increased almost 10 times. Banks of the public sector are included in the list of critical infrastructure objects in the banking system and the list of authorized banks of Ukraine involved in work in the conditions of a special period. The purpose of the article is to determine the main trends in the development of the state banking sector in Ukraine during the period of independence. Methods. In the research process the following general scientific methods of knowledge were used, such as historical method (when studying the emergence and development of state banks in chronological order), generalization and comparison (when studying the essence of state banks, to compare the state banking sector of Ukraine and foreign countries), analysis (for assessment of the role of individual state-owned banks) and synthesis (for a generalized assessment of the share of the state-owned banking sector and the economic problems arising from it), a statistical method (in the study of quantitative indicators of the functioning of state-owned banks of Ukraine). The results. The main stages of the development of the state banking sector of Ukraine were studied: the reasons for the creation of state banks and the nationalization of private ones, the results of these decisions for the economy and the financial system, and the change state banking sector’s share in the banking system were analyzed. The place of individual state banks in the banking system by size and share of assets is highlighted. Conclusions. The main negative consequences of a high share of the state in the banking sector are summarized and the need to reform the state banking sector of Ukraine is formulated. The impracticality of privatizing the largest state-owned banks during the war has been substantiated.

China’s public long-term care insurance and risky asset allocation among elderly households

China’s elderly households are characterized by higher holdings of cash and cash equivalents and lower holdings of stocks and bonds in their financial portfolios. We utilize the public Long-term Care Insurance (LTCI) reform and data from the China Health and Retirement Longitudinal Study (CHARLS) to examine how LTCI coverage affects risky asset holdings among newly insured elderly households. Employing a difference-in-differences methodology, our findings reveal that LTCI significantly increases the share of risky assets in the financial portfolios of older families. The increased preference for risky assets may be a result of a weakening incentive for precautionary savings. Decomposing risky assets into bonds and stocks, we find that the increase in the share of risky assets following the LTCI pilot comes mainly from bond investments rather than stocks, which indicates that LTCI has a limited effect on risk asset holdings among the Chinese elderly. Our study contributes to understanding the economic impacts of China’s public LTCI by showing that LTCI may lead to changes in asset allocation strategies among elderly households.

АНАЛІЗ ДІЯЛЬНОСТІ БАНКІВ НА ФІНАНСОВОМУ РИНКУ УКРАЇНИ

The article analyzes the activity of domestic banks in Ukraine's financial market and examines the state and dynamics of the banking system's assets, capital, and liabilities for 2020-2023. Ukraine's financial market is experiencing significant challenges due to martial law, but these hard conditions also driving radical change and innovation in the sector. Due to the specificity of their activity, banks occupy a special place in the market economy and have a significant impact on the development of the financial market and the economy of the country. The integration of the national banking system into the world financial space is one of the leading directions of economic globalization, which strengthens the requirements for domestic banking institutions to increase their competitiveness and efficiency in providing financial services. This makes it necessary to study the essence and peculiarities of the functioning of banking institutions in the financial market of Ukraine in the modern, changing conditions of the development of economic relations between subjects of the national and international economy. The trend of consolidation of the banking system and withdrawal from the market of unreliable banks or banks whose capital belongs to under-sanctioned owners has been revealed. It was determined that despite the decrease in the number of these institutions, there was no significant deterioration of the main quantitative and qualitative indicators of the bank's activity, which indicates the stability of the efficiency of their activity. The state, dynamics, and quality of the banking system's credit portfolio were studied, and banks' compliance with NBU prudential regulations regarding credit risk was analyzed. The consistently high value of 45% of the share of bank assets in GDP confirms the overall efficiency of these financial institutions. A positive thing is the reduction of NPL before the full-scale invasion, but with its onset, this indicator increased again. A characteristic feature of the activity of domestic banks at present is a significant increase in the interest of institutions in investments in securities, in particular, military government bonds, the share of investments in these securities in the total assets of banks is rapidly increasing. To stabilize the financial state of the country's economy under the influence of "force majeure" circumstances, the banking system must constantly adapt its activities on the financial market, acting as an intermediary in the circulation of capital and financial resources

Job quality and institutional investors: Evidence in 17 OECD countries, 1993-2017

This article investigates the relationship between the share of assets held by different institutional investors as a proportion of GDP and a synthetic index of job quality in 17 OECD countries from 1993 to 2017. Our first contribution is to provide a new, multidimensional composite indicator of job quality based only on objective dimensions. According to this measure, a continuous decline in job quality is observed in many OECD countries. Second, the emergence of institutional investors as central financial actors since the 1980s has significantly affected labour relations. In this regard, we argue that the increasing influence of institutional investors through their effects on wages and jobs is associated with a lower level of job quality. Using fixed-effects OLS and IV regressions, we find little support that the share of asset holdings by institutional investors is correlated with a lower level of job quality, mainly due to the small magnitude of the coefficient estimates. Finally, we find that the job quality-reducing effect of the share of assets held by institutional investors is more pronounced in countries that have experienced a decline in union bargaining power, again with a small magnitude of our different estimates.

El papel de los préstamos y del ICAS BE en el marco de colateral del Eurosistema en 2024

Rationale This article analyses the developments over the last 12 months in the share of non-marketable assets (essentially bank loans) pledged as collateral in the Eurosystem’s monetary policy credit operations, focusing in particular on the actual and potential contribution of the Banco de España’s in-house credit assessment system (ICAS BE). Takeaways •Over the last 12 months the share of non-marketable assets in the collateral pledged by Spanish counterparties in Eurosystem financing operations has increased once again, marking a continuation of the upward trend that began after the onset of the COVID-19 crisis. The proportion of non-marketable assets that are loans to firms rated using the ICAS BE has also risen. •Counterparties have ample scope to increase the volume of ICAS BE-rated pledged loans, especially in the case of loans to small and medium-sized enterprises. •After improving for two years, Spanish firms’ credit ratings assigned by the ICAS BE have deteriorated slightly compared with 2023, above all due to the increased interest burden firms are currently shouldering.

Air pollution and corporate financial assets allocation: Evidence from China

Understanding the relationship between air pollution and corporate investment strategy has significant implications for both environmental sustainability and economic development. Utilizing data from China's A-share listed companies spanning from 2014 through 2022, we investigate the causal relationship between air pollution and corporate allocation of financial assets. Using an instrumental variable approach, we find that worse air quality has a positive effect on corporate financial asset allocation. Specifically, a 1% increase in the number of air pollution days tends to result in a 0.002% increase in the share of financial assets held by firms. This effect prevails through diverse robustness tests. Furthermore, as companies encounter more stringent financing constraints and environmental regulations, the trend of air pollution promoting the increased financialization of assets becomes more pronounced. Based on the findings, this paper suggests providing more support for enterprises to facilitate the upgrading of production and operation to meet environmental standards.

Innovation activity of the largest companies in the high-tech sector

Aim. To analyze the specific features of innovation activity of the largest transnational companies of the high-tech sector in order to identify general trends and assess their efficiency.Objectives. To study the expenditures on innovation in Alphabet, Apple, Microsoft and Amazon; to determine the ratio of expenditures on research and development (R&D) to total revenue and the share of innovation in total expenditures; to examine the market capitalization and the share of private investors in the ownership of shares of these companies; to analyze the share of intangible assets in total assets; to assess the intensity of innovation activity by the number of issued patents; to identify the general characteristics of innovative companies-leaders of the high-tech sectorMethods. This study utilizes financial indicators, statistical data and data on patent activity of Alphabet, Apple, Microsoft Corporation and Amazon.Results. The largest high-tech companies achieve improved innovation performance through a combination of understanding customer needs, active participation of management in the research and development program, and the creation of unique products and services based on new technologies. Financial success depends on successfully utilizing existing intellectual resources, creating long-term customer relationships, and fostering the development of human capital within companies. Companies that focus on customer satisfaction and continuously stimulate employee development demonstrate higher innovation performance and ensure commercial success in the market.Conclusions. The comparative analysis of the indicators of the largest transnational companies in the high-tech sector allows us to assess the efficiency of innovation activity, as well as to identify the key factors contributing to their sustainable development in a highly competitive market.

100 Years of Rising Corporate Concentration

We collect data on the size distribution of US businesses for 100 years, and use these data to estimate the concentration of production (e.g., asset share or sales share of top businesses). The data show that concentration has increased persistently over the past century. Rising concentration was stronger in manufacturing and mining before the 1970s, and stronger in services, retail, and wholesale after the 1970s. The results are robust to different measurement methods and consistent across different historical sources. Our findings suggest that large firms have become more important in the US economy for a long period of time. (JEL D22, E24, L11, L25, N12)

Wealth shocks and portfolio choice

We use new euro area representative data from the Consumer Expectations Survey (CES) to elicit household-specific propensities to invest and consume out of positive wealth shocks. Using a randomized assignment of hypothetical lottery gains ranging from €5,000 to €50,000 and a realistic menu of consumption, saving and asset choices, we estimate the causal effect of wealth shocks on risky asset ownership and conditional asset shares. Wealth shocks have a positive effect on stockholding (between 8.4 and 12.8 percentage points increase in participation for the largest wealth shock). The majority of households do not participate in the stock market, even after a large increase in wealth. The conditional asset share invested in risky assets is constant for wealth shocks up to €20,000, and edges up slightly (by at most 2 %) for larger prizes. Our evidence is consistent with constant relative risk aversion for the majority of risky asset investors, while we also find important heterogeneity in the level of risk aversion across individuals.

Transaction-level transparency and portfolio mimicking

This study examines whether an increase in the transparency of investment transactions facilitates portfolio mimicking. While there are reported benefits of transparency in enhancing regulatory monitoring and discipline, an increase in the transparency of investment transactions can also facilitate mimicking of peer firms’ investment strategies. I exploit an exogenous increase in the broad dissemination of transaction-level investment disclosures of U.S.-based insurers and find a significant increase in portfolio similarity at the individual security level. Increases in portfolio similarity are more pronounced in smaller, less sophisticated insurers mimicking their larger, more sophisticated peers. Shared asset positions and common exposures to risk can exacerbate collective risk across firms. Accordingly, I find that the detectable increases in portfolio similarity are positively associated with measures of systemic risk, especially in those smaller insurers mimicking their peers. This study adds to a nascent literature on portfolio mimicking and highlights a potential negative externality of increased transparency.

Does childhood adversity affect household portfolio decisions? Evidence from the Chinese Great Famine

We employ the 1959–1961 Chinese Great Famine as a quasi-natural experiment to examine the relationship between experiencing adversity in childhood and financial decisions in adulthood. Using data from the 2017 China Household Finance Survey and the intensity of excess deaths during the Great Famine, results from our preferred two-part fractional regression model suggest that, for an additional excess death per thousand people during the Famine, cohorts who were in their infancy and early childhood during the Famine are 0.2–0.3 percentage points less likely to hold risky financial assets than other cohorts. We also find that, conditional on the decision to hold risky assets, those who experienced an additional excess death per thousand people during the Famine in their middle to late childhood hold 1.1 percentage points higher share of risky assets in their household financial portfolios than those who did not experience the Famine. We explore several potential mechanisms and find that financial literacy, risk-taking preferences and locus of control are channels through which childhood adversity in the famine years affects household portfolio decisions. Our findings are robust to a series of sensitivity checks.

The impact of economic uncertainty on bank efficiency—the moderating role of country governance

This study examined the impact of economic uncertainty (EU) on Islamic banks (IBs) and conventional banks' (CBs) efficiency in countries that meet a standard where 1% share of Islamic banking assets is part of their total domestic banking sector assets. In addition, this study explored the moderating effect of country governance (CG) by employing the quantitative methodology based on secondary data from 2006 to 2021. The data analysis was done through ordinary least square, fixed effect model, and the random effect model. EU was found to enhance bank efficiency based on the basic regression results. CG moderated the positive effect of EU on bank efficiency. Additional robustness tests showed that EU was positively related to both types of banks' efficiency. The value of the paper is unique in that few papers have investigated the moderating effect of CG on the impact of EU on banks' efficiency, which enhances comprehension of EU and CG. These results highlight important policy implications whereby banks should continue to invest in and improve their risk management strategies. In addition, governments and regulatory bodies should prioritise good governance practices as these can improve banks’ efficiency.

Blacklisting Based Anonymous Authentication Scheme for Sharing Economy

Authentication and blacklisting mechanisms have a key role for service providers to deliver the service to correct users through digital channels. Nevertheless, there always have been concerns about privacy of the users against such mechanisms. The conditional anonymity concept is proposed as a remedy to these concerns. A recent approach in the literature for conditional anonymity is blacklistable anonymous credentials, which allows service providers to blacklist users for an authentication session without identifying the user. In this paper, we improve user anonymity in conditionally anonymous schemes using two complementary mechanisms. First, we define whitelisting property for blacklistable anonymous credentials and give a construction of this scheme. The whitelisting property can be used to unlink an honestly behaved authentication session from the user. Second, we propose an extension of this scheme for a particular use case, sharing economy services. This scheme allows a service provider to blacklist a user only if the user have not returned the shared asset in due time. We benchmark the performance of our schemes by comparing them with the rival schemes. Our experiments show that both of our scheme have comparable performance to previous works.

The Transformation of Tourism Villages Through Social Capital and Leadership in Turi District, Sleman, Yogyakarta

This research investigates social shifts in Turi District, Sleman Regency, The Special Region of Yogyakarta. Turi District was previously known as a salak fruit-producing area, which developed as a salak agro center. However, Turi District has become the area with the most tourist villages in Sleman Regency. The growth of tourist villages there is relatively rapid and reasonably fast. This research aims to look at the transformation process and the capital supporting the tourist villages' development in the Turi District. The method used in this research is qualitative. The data collection techniques are observation and interviews. Meanwhile, the theories used are social capital and human capital. The research has three main findings. Firstly, the tourist village in Turi District is a shared asset managed collectively and driven by the collective awareness of the local community. Solid social relations and local institutions support this collective awareness. Social capital makes it easier to mobilize community participation in the pilot process and management of tourist villages. Second, the existence of solid bonding relationship capital supported by external network capital with outside institutions (bridging social capital). It further facilitates efforts to develop tourist villages. Third, even though social capital significantly influences the start-up and management of tourist villages, the key factor in intensifying the development of tourist villages comes from actors or leaders who can build ideas and mobilize physical capital and social capital. In other words, human capital is fundamental in developing tourist villages in Turi District. Based on these findings, this research provides an overview of village communities regarding the importance of commodifying village potential through independent management, actualizing social capital, and the significance of local leadership. It is to provide economic benefits for village communities and maintain environmental and cultural assets (environment and culture sustainability).
 Keywords: human capital, leadership, social capital, tourism villages, transformation

Optimistic framing increases responsible investment of investment professionals

The global warming crisis is unlikely to abate while the world continues to collectively fund the extraction and burning of fossil fuels. Carbon divestment is urgently needed to ward off the impending climate emergency. Yet responsible investments still only account for a modest share of global assets. We conduct an incentivized artefactual field experiment to test whether framing divestment as a social norm, communicating it by a person with perceived credibility and expertise (a messenger), and highlighting optimistic attributes bolster responsible investment. Our subjects are investment professionals who have significant influence over the allocation of funds. We provide evidence that optimistic framing increases responsible investment. Assuming a comparable effect size, the observed increase would represent a $3.6 trillion USD global shift in asset allocations.

ІНВЕСТИЦІЙНА ДІЯЛЬНІСТЬ СТРАХОВИХ КОМПАНІЙ НА РИНКУ СТРАХОВИХ ПОСЛУГ УКРАЇНИ: ОЦІНКА ТА НАПРЯМИ РОЗВИТКУ В СУЧАСНИХ УМОВАХ

The article considers the formation and investment of financial resources of insurance companies in Ukraine in the current conditions and outlines the main directions of increasing the investment potential of insurance companies. The dynamics of growth of insurance premiums, reserves, assets and equity of insurance companies as important indicators of market development in general and investment income of insurance companies are studied. The small share of insurance premiums and assets in GDP indicates that the development of the insurance market has little impact on the country's economy. There is a gradual growth of the market in 2023 by key indicators. Insufficient capitalization of the domestic insurance market, a large share of compulsory insurance in insurers' portfolios, low level of life insurance development, and economic crisis are currently having a negative impact on the development of insurance companies' investment activities. The author outlines the main areas of investment activity for the near future, which are to activate the financial market in order to use a wide range of investment instruments, improve the quality of the investment portfolio and optimize its management by transferring part of the insurance reserves to trust management, and encourage insurance companies to invest in the real sector of the economy. It is important to strictly adhere to the principles of building an investment management system based on high investment liquidity, return on investment, strict liquidity restrictions, and sensitivity to changes in interest rates and profitability. All of this will help strengthen the investment potential of the insurance market, turn it into an important investor in the national economy, and increase the profitability of insurance companies' investments, in particular. In addition, the development of voluntary insurance, including long-term life insurance, the development of new competitive insurance products, the search for new and improvement of existing sales methods, the expansion of the regional network, and the widespread use of digital technologies are considered promising.

Islamic finance and economic growth: Global evidence

AbstractWe document the contribution of Islamic finance development to economic growth by studying a global sample of countries engaged in providing Islamic financial services. Fifteen countries are included in the sample based on significant Islamic banking share in total domestic banking assets. Results are documented through the application of the Panel regression (EGLS) method for the period 2001–2020. Findings suggest a positive contribution of the Islamic Financial Services Industry (IFSI) to economic growth in sample countries in multiple regression settings. Additionally, a range of control variables, including domestic credit to the private sector, inflation, and trade openness, contribute significantly to economic growth. We recommend the creation of a conducive environment for the promotion of IFSI on account of the built‐in stability feature and positive contribution to economic growth. We also recommend overall development in the financial sector of selected economies, including credit availability to the private sector and trade openness. Our study helps in understanding the dynamics of economic growth in economies with a dual banking system (conventional & Islamic). This article contributes to the literature by studying a larger sample of countries engaged in the practice of Islamic finance and considering the significance of the market share of assets under IFSI.

ОЦЕНКА ВЛИЯНИЯ ЧАСТНЫХ ИНВЕСТОРОВ НА ТЕНДЕНЦИИ РАЗВИТИЯ РОССИЙСКОГО ФИНАНСОВОГО РЫНКА

This article examines the activities of individuals in the Russian financial market. Today, they account for more than 40% of the assets traded on the Moscow Stock Exchange. At the same time, stable trends of competition between investments in stock market instruments and bank deposits remain. Investors’ behavior is largely determined by their personal cognitive distortions and perception of external factors. This is largely due to the increased interest of individuals in the financial market. Due to the massive influx of individuals into the Russian stock market, a fairly large share of exchange-traded assets began to be allocated to their share.

Exploring the Relationship Between Diversification, Risk Bank, Size Bank, and Liquidity; Evidence From Conventional Banking In Indonesia

Banking plays an important role in the economy both micro and macro. In addition, it is crucial for a country to have a strong and robust banking system. To realize a strong and robust banking banks need to maintain their efficiency. Therefore, it is necessary to identify the factors that affect efficiency, including asset diversification, risk, bank size and bank liquidity. The novelty of this research is that there is an asset diversification variable. Asset diversification can protect investors from recurring investment cycles and can save from asset failure. The sample of this research are conventional banks with a total of 10 banks that have the largest share of assets in Indonesia. In this study to identify the effect of asset diversification, bank risk, bank size, and bank liquidity on bank efficiency used multiple linear regression analysis methods were used. This study concludes that asset diversification actually reduces bank efficiency. The increased bank risk, the better efficiency. Then, the size of the bank and liquidity have no effect on efficiency. Therefore, banks need to review the diversification strategy, ensure that the risks associated with each asset and portfolio as a whole are well-identified and look for opportunities to automate repetitive processes and reduce overall operational costs. Through this research, we suggest, (i) Banks need to review the diversification strategy that has been implemented. There may be some areas or types of assets that do not fit the risk profile and objectives of the bank, (ii) Banks need to ensure that the risks associated with each asset and portfolio as a whole are well-identified, measured and managed, (iii) Banks need to look for opportunities to automate repetitive processes and reduce overall operational costs.