Capital Share Research Articles

Are you getting full benefits from the use of social media? A review combining the concepts of social media, social capital and knowledge sharing

Purpose - The social media have become powerful tools that can be used to do much more than connecting relatives and friends, helping find a job or providing advertising space. This study aims to present the benefits of combining the subjects related to Knowledge Sharing, Social Media and Social Capital theory.Design/methodology/approach – Literature review of 22 papers identified as relevant when combining the subjects Social Media, Social Capital and Knowledge Sharing. The 22 documents were subjected of content analysis.Findings – The analysis of the literature revealed two fundamental roles for social media within organizations – an operational role – working as a channel or tool; a transformative role – used to support organizational strategy.Research limitations/implications - The limitation of this study is related to the limited number of papers that resulted from the search.Practical implications – The benefits of combining the three subjects include improvements on informal communication, better collaboration and cooperation, and a positive influence on job performance and innovation.Originality/value - The proposed research agenda highlights the importance of future investigations into the sharing of tacit knowledge through Social Media; focusing on how to generate trust via Social Media and suggests research attention related to knowledge protection.

The Evolution of Environmental Discourse: Evidence from Conference Calls

We examine the evolution of environmental discourse in conference calls and whether and how this discourse affects firm valuation. We measure the amount of environmental discourse as the frequency count of environmentally-related topics in the transcripts of conference calls. We find that environmental discourse increased substantially from 2006 to 2020 and that discourse is incrementally informative – beyond environmental performance metrics and environmental disclosures – for firm valuation. Specifically, we find that greater environmental discourse in conference calls is associated with higher cost of capital and lower share price, which we interpret as suggesting that discussion of environmental topics increases uncertainty. We also find that the amount of discourse in the prepared remarks portion of conference calls dominates that in the Q&A portion as an explanatory factor for firm value. We complement our analysis by examining the value-relevance of general ESG (Environmental, Social, and Governance) discussion and show that more general ESG discourse is associated with lower cost of capital and higher share price, implying a more favorable valuation impact of general discussions of social and governance issues.

Modeling Optimal Capital Structure Via System Dynamics Approach

Several theories have been presented about the corporate capital structure; some researchers believe that the structure of capital and firm value depend on each other. Moreover, others believe that the firm value is not influenced by any changes in the structure of capital, and with the change in the structure of capital, the value of the firm remains constant. The present research studies the historical theories of capital structure and presents the classification of existing theories in terms of the optimal capital structure. This classification is subdivided into two categories: the presence of an optimal capital structure and the absence of an optimal capital structure. With the historical review of theories of capital structure and the presence of an optimal capital structure or the lack of an optimal capital structure, it seems that none has been a complete model and so far, no one has been able to provide an optimal capital structure. In this research, from the system dynamics approach and using VENSIM software, the capital structure and share price of the company have been studied and the results of model simulation with real data are to ensure the correct performance of the model behavior. And the results show that financing through debt in the capital structure of the company has a significant effect on the debt cost rate and capital cost rate and does not have a significant effect on stock prices. Finally, the share price shows little sensitivity to the company's financial structure.

СРАВНИТЕЛЬНЫЙ АНАЛИЗ ДОХОДНОСТИ И ВОЛАТИЛЬНОСТИ КАЗАХСКОГО И УКРАИНСКОГО ФОНДОВОГО РЫНКА С УЧЕТОМ ВРЕМЕННОГО ГОРИЗОНТА ИНВЕСТИРОВАНИЯ

The development of the state's economy is inconceivable without the revitalization of investment processes in the field of financial investment, which are based on operations in the stock market. Simultaneously, the financial investment is characterized by speculative risk, which involves the possibility of obtaining both income and losses from the tradable securities. Such risk creates volatility of financial markets, an indicator of which is the dynamics of changes in stock indices that reflect the value of share capital of the largest enterprises and financial institutions of the state. The analysis of the results of recent scientific work carried out in the paper has shown a significant interest among the world's leading financial scientists to the issue of assessing the volatility of stock markets, which becomes of particular relevance subject to the investment time horizon. The study revealed a strong linear direct correlation between the indices of the Kazakhstan Stock Exchange (KASE) and the Ukraine Stock Exchange (PFTS). The analysis of the impact of the investment time horizon on the indicators of return and volatility was carried out for the Kazakh and Ukrainian stock markets. As a result, it was determined that the stock markets of both countries are characterized by a significant level of volatility, which is offset by high return and tends to decrease with increasing investment horizon. Analysis of the return and risk ratio using the Sharpe Ratio demonstrated an increase in investment attractiveness with increasing investment horizon.

Endogenous Education and Long-Run Factor Shares

We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and labor that fail to account for human capital levels will be biased upward. We develop a model with overlapping generations, technology-driven neoclassical growth, and ongoing increases in educational attainment. For a class of production functions featuring capital-skill complementarity, a balanced growth path exists and is characterized by an inverse relationship between the rates of capital-and labor-augmenting technological progress and the capital share in national income. (JEL D33, E25, J24, O33)

Технологія налагодження співпраці венчурного інвестора та інвестиційного підприємства

In the article it is established that today in Ukraine the development of venture investment of innovative enterprises is at an early stage and is characterized by a number of problems. The dynamics of venture capital in Ukraine shows that their number and capitalization have been growing rapidly during the research period 2011-2019, and this growth continued even after the crisis. It is worth noting that venture investments in Ukraine are made in points, in particular they are more concentrated in Kyiv and Lviv. The largest share of venture capital is international capital. The most attractive sectors for venture investment in Ukraine are software, online services and IT equipment. According to the results of studying domestic and foreign experience of venture investment, a number of obstacles in the development of venture business in Ukraine have been identified: instability of the external environment; underdeveloped venture infrastructure; low level of efficiency of regulation of venture investment at the legislative level; low liquidity of venture capital due to the low level of stock market development; the predominance of foreign origin of venture capital and the shortage of domestic investment resources; underestimation of the role of small and medium business in the innovative development of the economy; low level of quality of venture fund management; weak information support and insufficient transparency of venture business. Based on the best foreign experience of venture business and existing problems in the field of venture investment in Ukraine, a technology for attracting venture capital at the stage of negotiating and concluding a venture investment agreement has been developed. The proposed technology will provide an opportunity to form a unified and clear basis for concluding a venture investment agreement between foreign venture investors and domestic innovative enterprises. The use of the proposed technology in the domestic practice of venture investment will increase the attractiveness of cooperation with Ukrainian innovation organizations in the eyes of foreign investors. This, in turn, will intensify the attraction of foreign investment in the development of the innovative sector of the national economy.

Environmental transparency of Russian mining and metal companies: Evidence from independent ranking system

This article examines the current state and drivers of environmental transparency in the Russian Mining and Metals sector. The study is based upon 2016–19 successive annual rankings calculated transparently, using publicly available information and a third-party-verified ranking system. Ranking results reveal a definite increase in the transparency level of one of the most closed industries in Russia. The findings from the study show that a company's presence in the stock markets has a positive impact on its openness in environmental matters. However, a company’s listing on an international stock exchange does not guarantee high environmental transparency. Some evidence of a correlation between ranking positions and participation of diversified financial-industrial groups in the share capital was also found. Overall, our analyses suggest that ESG (environmental, social and governance) management in the Russian mining and metals sector is only in the process of development. To overcome this, the environmental transparency ranking of mining and metals companies in Russia creates a new mechanism for raising public awareness and dialogue between the public and one of the most closed industries. The ranking initiated calculation of industry‐average quantitative impact indicators that, as the sample grows, will transform into an important benchmark for corporate self‐assessment when comparing Russian practices with those of the largest international and foreign mining and metal companies across the globe.

The Role of the Family in Polish Family Enterprises

<p>The sector of family enterprises is smaller in Poland than in countries with a long tradition of market economies. A large part of the family business is owned by the generation of their owners. The purpose of this article is to define the role of the family in ownership, management and supervision in family enterprises. Empirical research was conducted in 2014 based on the CATI questionnaire. The research covered a randomly selected nationwide sample of seven hundred and fifty-eight medium and large enterprises, of which three hundred and ninety-six entities were qualified on the basis of the SFI as family enterprises. The empirical data were evaluated based on the analysis of the structure of the population, the analysis of interdependencies and cluster analysis. The results of the research allowed formulation of three conclusions. Firstly, in the majority of enterprises, the family of owners has a dominant share in equity capital. Secondly, the company managements are relatively narrow and dominated by people from the generation of founders. Thirdly, supervisory bodies are found in a few enterprises and are made up in large part by the owners’ family members. This characteristic of Polish family enterprises leads to a generalizing statement that as family enterprises, they are mostly in the initial stage of development.</p>

Changes in the Trade Paradigm and Agency Dilemma in Korea’s Core Export-Leading Industries

Purpose This study investigates the impact of firm dynamics and consequent business durations of incumbents on the productivity growth of vertical integration with capital share (VI) and non-vertical integration with capital share (NVI) structures in Korea’s core export-leading industries. Design/Methodology/Approach A stochastic frontier production function model was applied to unbalanced firm-level panel data for Korea’s IT manufacturing and automobile industries over 2006 2017. Findings Empirical results verified the agency dilemma between stable supply chain and innovation incentive as a catalyst of firm dynamics, and the consequent productivity gain or loss triggered by market exogenous shocks, structural reform, and market selection forces. Firms shifting from a VI to an NVI structure had a negative pre-exit impact on the productivity growth of the VI structure, while they had a significant positive impact on the productivity growth of the NVI structure they entered. All new entrants raised productivity growth in the IT manufacturing industry, while only new NVI entrants promoted productivity growth in the automobile industry. All exiting firms decreased the productivity growth in both industries. All persevering IT manufacturing firms reduced the productivity growth of their structures, whereas only persevering NVI automobile firms lowered the productivity growth of their NVI structure. Research Implications In terms of productivity growth from firms’ entry, exit, and business duration, IT manufacturing firms retained greater competitiveness and resilience than automobile firms under the adverse global value chain conditions of 2012, relative to those before 2012. However, deteriorating technical efficiency caused TFP growth to plunge in both VI and NVI structures in these industries since 2012.

Main financial instruments used by petroleum companies

In this article the author considers the key financial instruments used by fuel multinational corporations, which are necessary for financing corporate needs. The structure and dynamics of the share capital of the main players in the domestic oil business market are analyzed. Derivatives are characterized as an essential part of oil trading.

MAKING AN IN-KIND CONTRIBUTION TO A LIMITED LIABILITY COMPANY

In this article, the author focuses on the issue of making an in-kind contribution to a limited liability company – both at the time of the company establishment and in the procedure of increasing the share capital. For this purpose, the author reviews the doctrine and judicature positions relating to the concept of contribution capacity and looks for answers to the question whether the limited liability company agreement and the declaration of taking up shares have the binding and disposing effect referred to in art. 155 and art. 510 of the Civil Code, and therefore whether it is necessary to conclude a separate agreement for the transfer of the subject of the contribution to the company for the effective transfer of the in-kind contribution. In his considerations, the author draws attention to the practical dimension of applying the provisions from the point of view of the work of a notary

Share Capital Management in the Context of Ensuring Competitive Advantages of the Retail Business Entity

It has been proved that capital is a resource that is accumulated and is involved in the processes of reproduction and growth of value through mutual conversion of its various types, which are invested in the creation of assets, which is the total amount of financial resources of enterprises.
 It has been demonstrated that it is possible to determine the most rational ratio of capital indicators calculated on the basis of factors of influence, risks and practical experience that brings the target capital structure as close as possible to its optimal value. Given that the capital structure affects the market value of the enterprise through the price of capital, the concept of capital structure is studied in the same theoretical complex with the concepts of capital value and market value of the enterprise.
 The analysis has demonstrated that the first stage of optimizing the financial structure of enterprise’s capital as a specific object of anti-crisis retail business allows to determine the presence or absence of capital volume for a particular business entity. If the answer is positive, the optimization of the ratio of all sources of capital is carried out within this volume. If the available amount of capital is insufficient, it is necessary to find out whether the company has the opportunity to expand it and the sources to accomplish it. The second stage – assessing the capital structure by the criterion of financial stability – is carried out by comparing the actual values of the ratio of the current assets of business entities in retail trade in equity with the “normal” value, where its minimum level is 0.1. The capital structure is assessed during the third stage from the standpoint of the value of capital. Appropriate calculations are made by using the weighted average cost of capital of a business entity. The capital structure is evaluated during the fourth stage in terms of its efficiency. The basis for assessing the structure of capital by the criterion of its effectiveness is the calculation of the effect of financial leverage in previous periods and determining the impact of individual factors (return on assets, weighted average cost of debt, share of debt and equity) on this effect by using the method of chain substitutions regarding the weighted average cost of borrowed capital adjusted for the net operating result of the investment, the value of leased fixed assets, the amount of rent, as well as the share of financial loans, trade payables and long-term credit in the form of leased fixed assets in total borrowed capital. Finally, the target-oriented capital structure is formed during the fifth stage, taking into account the obtained results of optimization according to all the criteria and features of the components of capital and the factors that affect them. The fulfillment of this stage requires a thorough development of specific measures that should allow to form the necessary capital structure of the business entity in retail.

Why the Par Value of Share Matters to Investors

The purpose of the study is the analysis of the relationship between the par value (also known as nominal value or face value) and the parameters influencing a company’s financing. Additionally, the utility of the par value as a manipulation tool for equity offerings is examined. The study is based on a sample of IPO firms which went public on the Warsaw Stock Exchange. The study finds that an excess supply of shares has a negative impact on their valuation. In contrast, decreasing the par value prompts perceptual biases among investors beneficial to the success of the issuance. Moreover, share capital is found to be a useful signaling tool to improve the company’s position on the financial market.

Growth in China’s New Economy

This paper analyzes socially optimal shares of output invested in research and development (R&D), education and physical capital to sustain China’s economic growth as population growth slows. China’s high human capital income share closes the gap between individual skill and the technology frontier. The long run level of output per person is independent of population size. China’s spending on R&D and education contributes more than physical capital investment to economic growth.

Steps in industrial development through human capital deepening

This paper presents a model in which human capital is deepened, education time increases, and labor shifts away from agriculture. These notable trends in industrial development accompany incremental steps upward in the level of education productivity. As education grows, human capital becomes relatively abundant and industries react by deepening their investment in human capital. Industries that use human capital relatively more intensively experience relatively lower prices and higher output. New industries are assumed to emerge in step with education productivity. Each new industry is assumed to have a relatively higher human capital factor share. As human capital deepening occurs, labor shifts toward the new industry and away from traditional industry. I delineate these features by extending a well-known model of endogenous economic growth through human capital investment. The extension disaggregates output into separate industries with different shares of the human capital factor. This enables trademark features of industrial development. The model explains rising education levels, growth, and labor reallocation using a minimally complex approach that jointly explains stylized facts through human capital deepening within each industry.

Terrorism and Brain Drain in Pakistan: Is There a Connection?

This study empirically investigates the effect of terrorism and other push and pull factors on the skilled labour out-migration in Pakistan over the time period 1973–2015. The empirical findings based on fully modified ordinary least squares (FM-OLS) technique suggest that the waves of terrorism have not significantly driven the out-migration of skilled labour from Pakistan. Relatively, traditional push factors including inflation, unemployment and rising capital share in gross domestic product (GDP) have remained the major factors behind brain drain from Pakistan. Comparatively, the per capita economic growth, poverty and host and origin country’s emigration policies have curtailed the skilled out-migration. The findings suggest improving socio-economic conditions, increasing GDP per capita and decreasing unemployment and inflation in order to control the out-migration of skilled workers from Pakistan. Besides, the domestic labour market is required to boost the absorption capacity of highly educated and qualified workers in the country by making them more compatible to the existing stock of capital to restrict the brain drain. JEL: F22, F52, J24, C32

CURRENT STATE AND PROSPECTS OF CONSTRUCTION INDUSTRY DEVELOPMENT IN UKRAINE

The article deals with the current state of the construction industry for the period 2018-2020, and its significance for the economy of Ukraine is determined. The general trends of construction development in the modern transformational economic environment have been revealed here. The contribution and share of construction in the total GDP of the country are studied. The volumes of the construction production are analyzed, and after a deep review of indicators and rates dealing with construction products output, it is determined that the construction industry is developing steadily. The role of the state in creating a conducive investment climate in Ukraine is determined, and capital investments in construction are analyzed, and their share in the total capital is allocated. The sales volumes of building materials, the number of construction companies, and the population engaged in the construction sector are analyzed. The authors noted the necessity of normative regulation of construction activity, development, and implementation of state programs on development and support of the construction industry. The main problems of construction companies that have arisen after the introduction of a quarantine regime caused by the COVID-19 pandemic have received much attention. It is noted that it is possible to minimize the negative factors influencing the activities of construction industry companies through strategic management and support of this industry by the state.

Innovative Informal Sector Financing: Empirical Evidence from the Capital Sharing Model of Igbo Apprenticeship System in Nigeria

This article investigated the impact of Igbo Apprenticeship System (IAS) on informal sector businesses in Nigeria. IAS is an innovative indigenous informal sector financing approach among the Igbo people in Nigeria. The study conceptualized the capital sharing model of IAS in comparison with venture capital and modern incubation system. Using a household survey data collected from about 400 informal sector businesses randomly selected from Onitsha (Anambra state) and Aba (Abia states) in South-Eastern Nigeria, the study examined the effect of capital sharing model on small firm growth in Nigeria. The estimation technique was based on ordinary least square (OLS) method while the Probit regression was used as a robust check on the OLS estimates. Findings revealed that the businesses of apprentice-graduates, i.e. those who underwent IAS grew significantly in any of the three measures of growth used; unlike the businesses whose owners did not undergo IAS. Therefore, this study provided an empirical validation to the use of the capital sharing model of the Igbo Apprenticeship System as an innovative informal sector financing model in Nigeria. The study thus recommends a policy framework that supports this innovative informal sector financing in Nigeria. Also, the venture capital and modern incubation system can be extended to incorporate features of the capital sharing model of IAS. This would however require strengthening the informal sector business environment.

Protection of shareholders class rights in company law

PurposeA company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company’s organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights.Design/methodology/approachA doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law.FindingsThe findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights.Practical implicationsThe paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company.Originality/valueThe paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights.

When Aiyagari meets Piketty: Growth, Inequality and Capital Shares

We incorporate the division of income between capital and labor into analysis on the relationship between inequality and growth. Using historical data, we document that changes in the top 1 % income shares are positively associated with subsequent growth of per capita GDP when the capital share of income is low, whereas under high capital share, the association is negative. We show that these findings are compatible with a theoretical analysis that emphasises how changes in the distribution of income translate into the accumulation of capital and overall economic activity through the interplay between precautionary saving motives and consumption smoothing. We also investigate how accounting for financial frictions affects our main findings.