Utility Sector Research Articles

Financial Distress Prediction in Infrastructure, Utilities, and Transportation Sector Companies 2015-2020

This research is based on financial distress or financial distress, which negatively impacts the company, marked by its inability to fulfill its obligations at maturity. This phenomenon can be an early warning related to further problems, and financial distress can be overcome by predicting as early as possible. This prediction is essential for management and company owners to anticipate potential bankruptcy. The formulations in this study include whether inflation affects predicting financial distress in companies in the Infrastructure, Utilities, and Transportation sectors listed on the IDX for the 2015-2020 period. And Whether the financial ratios (Current Ratio, Debt To Equity Ratio, Total Asset Turn Over, Return on Equity, Price Book Value) affects predicting financial distress in Infrastructure, Utilities, and Transportation sector companies listed on the IDX the 2015-2020 period. This study uses a quantitative approach and the type of associative research, and the source data is secondary data with a sample of 10 companies. The sampling technique used purposive sampling. Data processing in this study uses E-Views 9 with Panel Data Regression analysis techniques. This study can conclude that the variables of inflation, current ratio, price-book value, and total turnover significantly affect financial distress in the Infrastructure sector companies: utilities and Transportation. Meanwhile, the debt to equity ratio and return on equity variables did not substantially affect financial distress in the Infrastructure, Utilities, and Transportation sector companies in 2015-2020.DOI: 10.26905/jkdp.v25i3.5858

When do Firms and Environmental Activists Cooperate?: Evidence from the US Electric Utilities Sector

We examine the role of heterogenous organizational attributes of firms and environmental activists in determining the likelihood of them cooperating. We argue that insofar as heterogeneity in their attributes results in greater symmetry in their capabilities and objectives or induces either or both parties to make costly concessions during negotiations in anticipation of potential benefits, cooperation is more likely. A statistical analysis of firm-activist interactions in regulatory proceedings within the US electric utilities sector from 1990-2015 supports our predictions. We find that when firms demonstrated greater commitment to the environmental values, or when activists had a larger resource base, cooperation was more likely. In contrast, when a firm’s environmental practices were more objectionable, firms were economically reliant to a greater degree on a stakeholder adversely affected by outcomes of cooperation, or the activist was more ideologically inclined to engage in contentious tactics, cooperation was less likely. Our findings contribute new insights on contingencies underlying cooperation between firms and environmental activists in the context of regulatory institutions.

Merger and Acquisition Analysis in Creating Value for Shareholders in The Infrastructure and Utility Sector

Trough 20 – years period their merger and acquisition (M&A) in sector infrastructure and utilities are the pledge of the most country in the world, especially in Asia with most emerging countries. This study aims to know the relation about M&A activities to value shareholders in infrastructure and utilities sector in during last 20 years and year of crisis in 2020. Observe for acquire and target companies using event study approach to find Cumulative Average Abnormal Return (CAAR) on M&A activities that represent the value for the shareholders. Set event window for 31 days, consist of 15 days before the announcement and 15 days after announcement. Using sample of listed companies who making acquisition activities in Asia which size of the deal above USD 30 million. The result shows that the acquirers give positive CAAR that statistically significant 10% and the targets give positive CAAR statistically significant 5 %. The target company has higher cumulative abnormal average return than the acquirer company. Then M&A activity during crisis shows that for acquirer give positive not significant CAAR with 4,6% abnormal return and target give positive CAAR 3.4% but not significant. The target gives higher CAAR positive for t-15 to t+7 than the acquirer.

Facilitating ESCO market development through value co-creation: role of utility sector intermediaries.

The growth of energy service company (ESCO) markets in the private sector is restricted by a fragmented and highly uncertain market and by customers who are often unknowledgeable and unwilling. This study explores the potential role of utility companies as intermediaries in connecting supply-side ESCOs with potential demand-side customers in a manner that ensures customer satisfaction. The paper adopts a customer-centric, service-dominant logic perspective to examine how a utility company facilitates value co-creation in an in-depth case study of an extensive retrofit programme in the Emirate of Sharjah, United Arab Emirates. The findings underline several value co-creation roles associated with the utility company intermediary, notably relationship-enabling, communication-enabling and knowledge-enabling roles. We conclude with recommendations on how utility companies can facilitate the co-creation of value at the ESCO–customer interface and, hence, support the development of ESCO markets towards decarbonising the built environment.

Time-Series Analysis of Industrial Sector Performance and Economic Growth in Nigeria: A Disaggregated Approach

This study investigated the impact of industrial section performance on economic growth in Nigeria. Specifically, the study examined the impact of manufacturing sector output, mining and quarrying sector output, utility sector output and construction sector output on economic growth proxied by per capital real gross domestic product in Nigeria. Phillips-Perron unit root test, Johansen cointegration test and error correction mechanism (ECM) were applied on annual time-series data for the period 1981 to 2019. The findings indicated a long-run relationship between industrial sector performance and economic growth. The estimated long-run regression result showed that manufacturing, and mining and quarrying subsectors make significant contribution to economic growth while utility and construction subsectors have insignificant positive impact on economic growth in Nigeria. The short-run (ECM) regression result showed that the outputs of the manufacturing, mining and quarrying, construction and utility sectors all have insignificant positive impact on economic growth. Among other things, it is recommended that there should be a general improvement in the productive capacity of the industrial sector to enhance its contribution to economic growth.

Impact of COVID‐19 pandemic on risk transmission between googling investor’s sentiment, the Chinese stock and bond markets

PurposeThe main objective of this paper is to investigate whether the investors' behavior under optimistic (pessimistic) conditions has an impact on risk transmission between the Chinese stock and bond markets and the sector indices mainly during the COVID-19 pandemic.Design/methodology/approachThis study uses a new measure of the investor's sentiment based on Google trend to construct a Chinese investor's sentiment index and a quantile causal approach to examine the causal relationship between googling investor's sentiment and the Chinese stock and bond markets as well as the sector indices. On the other hand, the network connectedness is used to estimate the spillover effect on the investor's sentiment and index returns. To check the robustness of the study results, the authors employed the Chinese VIX, as another measure of the investor's sentiment using daily data from May 2019 to December 2020.FindingsIn fact, the authors found a dual causality between the investor's sentiment and the financial market indices in optimistic or pessimistic situations, which indicates that positive and negative financial market returns may have an effect on the Chinese investor's sentiment. In addition, the results indicated that a pessimistic investor's sentiment has a negative impact on the banking, healthcare and utility sectors. In fact, the study results provide a significant peak of connectivity between the investor's sentiment, the stock market and the sector indices during the 2015–2016 and 2019–2020 turmoil periods that coincide respectively with the 2015 recession of the Chinese economy and the COVID-19 pandemic.Originality/valueThis finding suggests that the Chinese googling investor's sentiment is considered as a prominent channel of shock spillovers during the coronavirus crisis, which confirms the behavioral contagion. This study also identifies the contribution of a particular interest for portfolio managers and investors, which helps them to accordingly design their portfolio strategy.

Materiality assessment: the case of Latin American listed companies

PurposeThis paper aims to propose a measurement of the materiality of environmental, social and governance information (ESG) reported by listed companies belonging to sensitive industries in Colombia, Mexico, Brazil, Chile and Argentina. This analysis is carried out from the insights of stakeholder theory, legitimacy theory and institutional theory. The research questions addressed are: What type of information is considered as material by Latin American companies? Does this information respond to the environmental and social issues within the context of Latin American companies and the needs of their stakeholders?Design/methodology/approachA materiality index is developed from principal component analysis and factor analysis, which are multivariate analysis statistical techniques used in various fields to develop indices. The designed index examines materiality in the sustainability reports of 65 companies for 2017 and 67 companies for 2018. These firms belong to the energy, mining, chemical, construction, construction materials and public services industries in Colombia, Mexico, Chile, Argentina and Brazil.FindingsThe results show medium-high materiality indices, mostly in Chilean, Mexican and Colombian companies. In addition, issues such as water management, climate change and occupational health and safety are particularly interesting for companies. For the two years studied and from the perspective of material aspects for the company and its stakeholders, energy, mining and utilities (drinking water and sewage) sectors obtained the highest scores. This shows that the disclosure of ESG information is higher in industries related to the exploitation of natural resources that cause adverse effects on the environment such as extractive industries. Both the analysis presented in this paper and the materiality measurement developed, allow social responsibility managers to have a standard on the level of importance allotted to the different topics disclosed in sustainability reports. Additionally, this study provides a perspective of the material issues recognized by sensitive industries with great environmental impact. Similarly, an analysis of the issues considered material by stakeholders is provided. This allows such issues to be compared, identifying similarities and differences among the issues regarded as material by a company and its stakeholders.Practical implicationsThe paper opens the debate is open as to whether the information disclosed response to the needs of stakeholders or whether, on the contrary, the materiality analysis is a process that emerges simply from the interests of the company. These demands for qualitative and field research to complement quantitative studies such as this one to research the stakeholders’ engagement processes in context.Social implicationsThe paper’s purpose a challenge for future research is to strengthen the use of various methodologies that allow knowing the participation processes in the definition of materiality in the ESG information and the companies’ engagement with stakeholders. This stimulates research in the region, which is still in its infancy.Originality/valueThe international literature contains few studies related to the assessment of materiality for sustainability reporting. So this paper contributes proposes measurement of materiality for ESG information.

Состояние, структура и динамика преступности в сфере жилищно-коммунального хозяйства

Crimes in the housing and communal sphere cause considerable economic damage to the individual, society and the state. This problem is constantly addressed at all levels of government. The purpose of the study is to examine statistical indicators and to identify trends and patterns of crime in the field of housing and communal services.
 The article provides a criminological analysis of crime in the field of housing and communal services, its concept, structure, state and dynamics are considered, on the basis of general and special methods of scientific knowledge. The scientific study is based on statistical and analytical data of the Prosecutor’s Office Russia. It is based on the number and structure of registered crimes in the field of housing and communal services in the period from 2014 to 2020.
 The structure and dynamics of corruption and economic crime in the sphere of housing and communal services are presented. The author concludes that (44–52 %) of all crimes committed in the sphere of housing and communal services are corruptive. The author in a certain period observed an increase in crimes in the sphere of housing and communal services. In her opinion, this is due to changes in regulatory framework in the housing and utilities sector and an increased attention paid to the problems inherent to this sector by all the agents involved: state bodies, the country’s leadership and society. As a result of the analysis, the author concludes about the unstable dynamics, characterized by jumps of both positive and negative nature, increased latency and a high crime rates in the housing and communal services sector.

Problems of attracting investment in housing and communal services

Object: The article deals with the problems of creating incentives to attract investment in order to modernize and create fixed assets in the housing and utilities sector. The main negative factors that negatively affect the attraction of investments for the reproduction of fixed assets of housing and utilities organizations are reflected.Methods: The paper analyzes the pricing policy for housing and communal services for enterprises and the population of the Republic of Kazakhstan, highlights the positive foreign experience of attracting private capital to the housing sector through concession agreements.Results: Monetarization of benefits for the population was not used in the field of housing and communal services, which led to the emergence of a mechanism for issuing subsidies for housing and communal services. Currently, about a third of the population of the Republic of Kazakhstan is entitled to benefits for housing and utilities companies do not lways receive full or timely budget subsidies for additional payments to preferential categories of the population. This circumstance increased financial risks in the activities of housing and utilities enterprises and led to a decrease in their profits and, accordingly, investment activity.Conclusions: The sphere of housing and communal services is characterized by the provision of two types of services to homeowners. Housing services include everything that is necessary for the proper maintenance of the common property of the owners of premises in an apartment building. A specific list of housing services is agreed by the owners and the management organization in the contract. Housing services, for example, include maintenance and repair of common property of owners of premises in an apartment building (inspections of common property, detection of damage and violations), including sanitary maintenance of common property (janitor services, cleaning of entrances, their disinsection and deratization, services for cleaning garbage chutes); services for managing common property and common funds (receiving, storing and transmitting technical documentation, filling in and updating information in the GIS housing and utilities, debt collection, etc).

Pengaruh Pajak, Kepemilikan Asing dan Tunneling Incentive terhadap Penerapan Transfer Pricing pada Perusahaan Sektor Infrastruktur, Utilitas dan Transportasi di Bursa Efek Indonesia

The purpose of this study was to examine the effect of tax, foreign ownership and tunneling incentives on indications of transfer pricing in infrastructure, utility and transportation companies on the Indonesia stock exchange in 2014-2018. The population in this study are infrastructure, utility and transportation companies listed on the Indonesia Stock Exchange for the period in 2014-2018. The number of samples used was50 companies using purpose sampling method. The data processing program uses version 22 of the SPSS program. The analysis method used in this study is descriptive statistical test, classical assumption test, multiple linear regression, t statistical test, F statistical test, determination coefficient test (R2). and correlation test (R).The results showed that the tax variable had no effect on the indication of transfer pricing. The foreign ownership variable has no effect on the indication of transfer pricing. The tunneling incentive variable has an effect on the indication of transfer pricing. Based on the simultaneous test (F test), the variables of tax, foreign ownership, and tunneling incentives together have an effect on indications of transfer pricing in infrastructure, utility and transportation sector companies listed on the Indonesian stock exchange in 2014-2018.

Managing organizations in the housing and utilities sector: assessment of industry competitiveness

Managing organizations in the housing and utilities sector: assessment of industry competitiveness

GELİR YUMUŞATMA VE FİRMAYA-ÖZGÜ ETKENLER: TÜRKİYE ÖRNEĞİ

This study investigates the income smoothing behaviours of the listed firms in BIST from the period spans from 2012 to 2019. The study scrutinizes such behaviours at the sectoral level. Moreover, the relationship between firm-specific factors -size, leverage, growth- and income smoothing practices are also examined. For the detection of the income smoothing so-called Eckel Model (1981) model is used. Based on the analysis it is found that 1 in 3 observation in the manufacturing sector, 1 in 5 observation in the utility and transportation sector and 1 in 2 observation in the finance sector implement income smoothing practices between the period of 2012-2019. Regarding firm-specific factors, it is found that compared with the non-smoothing firms, income- smoothing firms are smaller, low leveraged and exhibit lower growth in the manufacturing sector. Moreover, in the finance sector, income- smoothing firms are smaller and low leveraged comparing with the non- smoothing firms. Lastly, there is no significant difference between the income-smoothing and non-smoothing firms with regards to firm-specific factors for the utility & transportation industry.

Moderasi Kepemilikan Manajerial Terhadap Faktor-Faktor Yang Mempengaruhi Income Smoothing

The objective of this study is to analyze of business strategy, company size and financial performance on income smoothing with managerial ownership as a moderating variable. The object of this research is the infrastructure, utility and transportation sector service companies listed on the Indonesia Stock Exchange in 2015-2019. The sampling technique used purposive sampling method and used Moderated Regression Analysis (MRA) method for The analytical. The number of samples used in this study were 32 companies. The results show that: Business strategy has no effect on income smoothing, Firm size has an effect on income smoothing, Financial performance has no effect on income smoothing, Managerial ownership is not able to moderate the effect of business strategy on income smoothing, Managerial ownership is not able to moderate the effect of firm size on income smoothing, Managerial ownership is not able to moderate the effect of financial performance on income smoothing.

Risk transmissions between sectoral Islamic and conventional stock markets during COVID-19 pandemic: What matters more between actual COVID-19 occurrence and speculative and sentiment factors?

Being the health pandemic with the highest impact on the global financial market, the recent COVID-19 pandemic has led to significant risk transmissions across stock markets. Although an increasing number of studies have examined the effects of the pandemic on financial markets, we provide novel insights into the volatility connectedness between conventional and Islamic stock markets. First, the analysis is conducted at the sectoral level, considering nine sectors for each category. Second, a greater novelty is applied by determining if the actual COVID-19 occurrence or speculations or sentiments raised by it is responsible for the connectedness. Summarily, findings show that markets are strongly connected. In addition, the Technology and Utilities sectors of both stock market types, and the Oil and Gas conventional stocks are the net receivers of volatility shocks. On average, however, Islamic markets tend to be more immune to the pandemic than conventional markets. Finally, both causal factors considered significantly affect the connectedness measures, although the effect is heterogeneous and stronger for the speculative/sentiment indicators. These findings provide appropriate policy clues for both investors and policy makers.

Institutional drivers for corporate social responsibility in the utilities sector

PurposeThe purpose of this study is to examine the influence of characteristics of the institutional environment on the disclosure of corporate social responsibility (CSR).Design/methodology/approachThis is a quantitative and descriptive research. The dependent variables used were environmental dimension (ED) and social dimension (SD) that together compose the corporate social performance (CSP). The independent variables that will be used are the characteristics of the institutional environments of Brazil and the UK. Thus, for this end, variables of the national business system of both countries will be used: corruption transparency, access to credit by countries, quality of the education system and labor relations. After their collection, the data were submitted to descriptive and inferential statistics and hierarchical regression.FindingsData show that UK companies make more disclosure in CSR than Brazilian companies. Through linear regression, it can be seen that the institutional environment affects disclosure in CSR. In the UK, a country with better educational, labor, political and financial indicators than Brazil, it presented better CSR practices. The findings reveal that the better an institutional environment, the more firms act in CSR. The findings of the research confirm the premise of institutional theory: different institutional fields can modify business performance.Research limitations/implicationsThe study analyzed only the disclosure practices of companies in the public sector. Thus, the results should be carefully analyzed, without generalizations for all industry sectors. Therefore, it is suggested that future research looks at other industry sectors as well as other institutional contexts, i.e. other countries.Practical implicationsMultinational companies may have different CSR practices according to the institutional environment in which they operate. For example, companies in developed countries, such as the UK, have greater stakeholder pressure. Given this, managers must adapt their environmental strategies according to the institutional environment in which they operate.Originality/valueThis research contributes to CSR studies in various institutional contexts. There is a consensus in the literature that institutional environments affect firms' CSR practices. However, few empirical studies show results between the national business system and CSR. Thus, the present study intends to fill this research gap.

Military industry bubbles: are they crowding out utility investments?

The rapid growth in defence expenditure in China raises the concern that investments in the defence sector crowd out investments in social sectors, i.e., the ‘guns for butter’ argument. This article resorts to the bubble testing method to study the trade-off between defence and utilities sectors in the Chinese capital market. Based upon the generalized sup Augmented Dickey-Fuller (GSADF) test, this paper captures and date stampings explosive behaviors in defence and utilities industries using stock indexes. Empirical results reveal bubbles for defence and utilities sectors in similar time periods, thus indicating that the factors driving explosive movements are alike for both sectors. However, bubbles in a certain sector do not necessarily crowd out investments in the other sector. Through testing bubbles in the ratio of stock indexes of two sectors, we find that the explosive episodes vanish. The results indicate that the crowding-out effect between defence and utilities sectors does not exist in the Chinese capital market. Increases in the military expenditure in China are necessary to safeguard the national security because of frequent geopolitical conflicts and terrorism. However, the defence to utilities ratio is increasing rapidly, implying the possibility that excessive growth in military expenditure may generate the ‘guns for butter’ problem, which can be detrimental to economic growth.

Electricity theft whistleblowing feasibility in commercial accommodation facilities

Electricity theft is one of the most critical sources of non-technical losses in the utility sector, of which commercial accommodation facilities are significant perpetrators. Though crime resolution has socio-economic, psychological, ethical and technical underpinnings, the latter is mostly sought in electricity theft. Meanwhile, technological means to combat this menace have not been very successful, which calls for the integration of social interventions. Employing the social-psychological model of crime reporting and three other deontological and teleological lenses, we taxonomised electricity theft whistleblowing intentions and distilled the underlying reasons using a sequential mixed-methods research design. Three segments of whistleblowers, namely Kantians, spectators and utilitarians, are identified. Reasons including criminalising electricity theft, government revenue gatekeeping, avoidance of trouble and empathetic feeling uniquely define these segments. The study advances that addressing the characteristics of the segments along with the fundamental human motivations of accuracy, connection and ego could be profound engines of change for increased electricity theft reporting.

Fatores Determinantes da Estrutura de Capital das Empresas Brasileiras: Evidências do Setor de Utilidade Pública

This study aimed to analyze the determinants of short (ECP) and long-term (ELP) indebtedness of companies in the Public Utility sector in Brazil, in the light of the pecking order and trade-off theories. The methodology used was the multiple regression analysis with panel data for the period from 2008 to 2017, using ECP and EPL as dependent variables; and profitability, risk, size, current liquidity index, growth and tangibility as independent variables. The sample consisted of 55 companies, whose data were extracted from the Bloomberg financial information platform. In the results, it was pointed out that, for the ELP, only the profitability and growth variables were relevant for determining the capital structure of companies, while the risk factors, size, liquidity index and tangibility were not. With regard to the ECP, the variables profitability, risk, liquidity index and growth were significant while size and tangibility were not. For all cases, the observed relationships were negative, therefore, sometimes compatible with the trade-off theory, sometimes with the pecking order.

The Australian Stock Market’s Reaction to the First Wave of the COVID-19 Pandemic and Black Summer Bushfires: A Sectoral Analysis

In this study, we investigated the impact of the first wave of the COVID-19 pandemic on various sectors of the Australian stock market. Market capitalization and equally weighted indices were formed for eleven Australian sectors to examine the influence of the pandemic on them. First, we examined the financial contagion between the Chinese stock market and Australian sector indices through the dynamic conditional correlation fractionally integrated generalized autoregressive conditional heteroskedasticity (DCC-FIGARCH) model. We found high time-varying correlations between the Chinese stock market and most of the Australian sector indices, with the financial, health care, information technology, and utility sectors displaying a decrease in co-movements during the pandemic. The Modified Iterative Cumulative Sum of Squares (MICSS) analysis results indicated the presence of structural breaks in the volatilities of most of the sector indices around the end of February 2020, but consumer staples, industry, information technology and real estate indices did not display any break. Markov regime-switching regression analysis depicted that the pandemic has mainly affected three sectors: consumer staples, industry, and real estate. When we considered the firm size, we found that smaller companies in the energy sector exhibited gradual deterioration, whereas small firms in the consumer staples sector experienced the largest positive impact from the pandemic.

Analysis of stock market efficiency during crisis periods in the US stock market: Differences between the global financial crisis and COVID-19 pandemic

In this study, we test the efficient market hypothesis for a number of sectors in the US stock market during the COVID-19 pandemic to identify its effects on individual sectors. To test this hypothesis, we define the average price for 11 sectors within the S&P 500 and apply multifractal detrended fluctuation analysis to the average return series. Furthermore, we also investigate these sectors’ efficiency and multifractality during the global financial crisis (GFC) to analyze the features of the COVID-19 pandemic. Our findings can be summarized as follows. First, the average return series show non-persistent and persistent features during the GFC and the COVID-19 pandemic, respectively. Second, during each of these crisis periods, the consumer discretionary and utilities sectors had the highest and lowest levels of efficiency, respectively. Third, while both long-range correlations and fat-tailed distribution contributed to the multifractal properties, the latter of these was the chief contributor. Furthermore, the lower the efficiency ranking, the greater the impact of the fat-tailed distribution on multifractality. Finally, we classify sectors with low market efficiency for the two crisis periods. These findings have several important implications for asset allocations by investors in US stock markets.