We examine the cross-sectional variation in the marginal value of corporate cash holdings that arises from differences in corporate financial policy. We begin by providing semi-quantitative predictions for the value of an extra dollar of cash depending upon the likely use of that dollar, and derive a set of intuitive hypotheses to test empirically. By examining the variation in excess stock returns over the fiscal year, we find that the marginal value of cash declines with larger cash holdings, higher leverage, better access to capital markets, and as firms choose greater cash distribution via dividends rather than repurchases. WHAT VALUE DO SHAREHOLDERS PLACE ON THE CASH THAT FIRMS HOLD, and how does that value differ across firms? While an extensive literature attempts to estimate the value of adding debt to a firm’s capital structure, the search for estimates of the value of additional cash has not received nearly as much attention. This is a non-trivial oversight considering that corporate liquidity enables firms to make investments without having to access external capital markets, and to thereby avoid both transaction costs on either debt or equity issuance and information asymmetry costs that are often associated with equity issuances. Moreover, corporate liquidity reduces the likelihood of incurring financial distress costs if the firm’s operations do not generate sufficient cash flow to service obligatory debt payments. Corporate liquidity comes at a cost, however, since interest earned on corporate cash reserves is often taxed at a higher rate than interest earned by individuals. Furthermore, cash may provide funds for managers to invest in projects that offer non-pecuniary benefits but destroy shareholder value (Jensen and Meckling (1976)). Given the extent to which the literature examines the effect of these same frictions on capital structure, it is surprising that the value implications of holding cash in the presence of these frictions have not been similarly explored. 1
Despite the increasing importance of remittances in total international capital flows, the relationship between remittances and growth has not been adequately studied. This paper studies one of the links between remittances and growth, in particular how local financial sector development influences a country's capacity to take advantage of remittances. Using a newly-constructed dataset for remittances covering about 100 developing countries, we find that remittances boost growth in countries with less developed financial systems by providing an alternative way to finance investment and helping overcome liquidity constraints. This finding controls for the endogeneity of remittances and financial development, does not depend on the particular measure of financial sector development used, and is robust to a number of robustness tests, including threshold estimation. We also provide evidence that there could be an investment channel trough which remittances can promote growth especially when the financial sector does not meet the credit needs of the population.
A fundamental question in accounting is whether and to what extent financial reporting facilitates the allocation of capital to the right investment projects. Over the last two decades, a large and growing body of literature has contributed to our understanding of whether and why financial reporting affects investment decision-making. We review the empirical literature on this topic, provide a framework to organize this literature, and highlight opportunities for future research.
This article aims to examine the impacts of US monetary policy (MP) changes on the Turkish economy and to research the transmission channels through which these effects are spillovers. A Structural Vector Autoregressive (SVAR) model is estimated for the period 2002:01–2017:12, during which a flexible exchange rate regime was adopted in the Turkish economy. According to the impulse-response analysis, the Turkish interest rate responds positively and significantly to the US Effective Federal Funds Rate (EFFR). This result shows that the Central Bank of the Republic of Turkey’s (CBRT) MP follows the FED's MP and is consistent with the dilemma hypothesis of Rey (2015). The analysis also demonstrates that both the EFFR and the VIX have a negative impact on net total capital inflows to the Turkish economy. The impulse-responses for the three components of net capital inflows indicate important conclusions. Firstly, neither EFFR nor VIX has a significant impact on Net Foreign Direct Investment (NFDI) inflows. Secondly, Net Portfolio Investments (NPI) respond significantly to the VIX but not to the EFFR. Thirdly, Net Other Investments (NOI) respond significantly to the EFFR but not to the VIX. These findings indicate that the NOI component plays a direct and major role in the emergence of the US MP’s spillover effects on the Turkish MP.
This article studies and analyses investments both in sports in general as well as in sports entities, carried out by private equity houses, in addition to some reflections on the same.
The result of an effective management of the redistribution of European Union funds should be a reduction of disparities between EU regions by guaranteeing their comprehensive and harmonious development and supporting the economic and social cohesion of member countries. A poorly-conducted programming process of financial interventionism, the source of which is EU funds, may result in divergence between regions, the direct effect of which would be their social and economic marginalisation. For this reason, it is important to skillfully manage those funds. The main aim of this article is to present the factors affecting the decision-making process of the use of EU co-financing, and that includes the pandemic as an external variable being a threat to the implementation of investments from the EU’s structural funds. To explain the multivariate associations between explanatory variables and the binary outcome variables, logistic regression was employed. Based on the tests’ results, significant associations were observed between the dependent variable and (a) participation in training co-financed by EU funds, (b) receiving information regarding additional EU funds as pandemic support, and (c) the suspension of planned investments using EU funds due to the pandemic situation. A comprehensive distribution of respondents according to the response categories in the analysed variables within the entire sample (N = 950) was presented. Corresponding associations were evident within a sub-sample (N = 303). The model showed that all significant independent variables explain the use of EU funds, but the model explains just 28.6% of the decision to use the funds. Thus, the following study indicates directions that require further research.
Dan BODESCU, Oana COCA, Stefania Beatrice PADURARU
et al.
The purpose of the research is to determine the specific capital costs of carrying out agricultural work with the farmers'own agricultural machines compared to the costs of agricultural services. A stratified sample based on economic size was used, consisting of 60 farms specialised in large crops from the NE and SE development regions of Romania. The novelty elements of this research consist in the fact that the analysis of the efficiency of the use of agricultural machinery uses a shadow cost—the opportunity cost—to determine the specific income of the use of agricultural machinery. The results show that small farms spend more than twice as much to carry out agricultural work with their own agricultural machinery. The average expenses per ha specific to the agricultural works carried out by farmers with their own agricultural machines recorded an average of 376.3 euro/ha for farms with a size smaller than 00 thousand SO and 86.5 euro/ha for farms with a size greater than 700 thousand SO. For a representativeness level of 69.3%, farms with a size smaller than approx. 578 thousand SO register losses if they carry out agricultural work with their own agricultural machines. This threshold can be appreciated on an area of approx. 854 ha cultivated with grain corn, common wheat, and rapeseed in equal proportions. Using the rationales and cost analysis models presented can help farmers make rational investments and strengthen informed demand in the agricultural services market.
Eleftherios Thalassinos, Naveed Khan, Shakeel Ahmed
et al.
In recent years, the rapid and significant development of emerging markets has globally led to insight from potential investors and academicians seeking to assess these markets in terms of risk inheritance. Therefore, this study aims to explore the validity and applicability of the capital asset pricing model (henceforth CAPM) and multi-factor models, namely Fama–French models, in Pakistan’s stock market for the period of June 2010–June 2020. This study collects data on 173 non-financial firms listed on the Pakistan stock exchange, namely the KSE-100 index, and follows Fama-MacBeth’s regression methodology for empirical estimation. The empirical findings of this study conclude that small portfolios (small-size companies) earn considerably higher returns than big portfolios (large-size companies). Ultimately, the risk associated with portfolio returns is reported to be higher for small portfolios (small-size companies) than for big portfolios (large-size companies). According to the regression output, the CAPM was found to be valid for explaining the market risk premium above the risk-free rate. Similarly, the FF three-factor model was found to be valid for explaining time-series variation in excess portfolio returns. Later, we added human capital into FF three- and five-factor models. This study found that the human capital base six-factor model outperformed the other competing asset pricing models. The findings of this study indicate that small portfolios (small-size companies) earn more returns than big portfolios (large-size companies) to reward the investor for taking extra risks. Investors may benefit by timing their investments to maximize stock returns. Company investment in human capital adds reliable information, replicates the value of the company and, in the long term, helps investors make rational decisions.
Brygida Klemens, Brygida Solga, Krystian Heffner
et al.
Climate change is taking place on a global scale and it is substantially affected by human activity, including increasing greenhouse gas emissions. One of the thematic objectives of EU’s new financial objective is a more environmentally friendly low-emission Europe that promotes clean and fair energy transformation, green investments, and a circular economy, among others. The Polish economy is mainly based on energy production from conventional sources (fossil fuels). Considering that the demand for electricity in Poland is predicted to increase by as much as 50% until 2040, it is necessary to take action aimed at increasing the share of renewable energy sources. The subject of analysis is the Opolskie Voivodeship (a NUTS 2 type region), the capital of which features the biggest Polish coal power plant. In 2014–2019, it was expanded by two units with 1800 MW in total capacity, thereby indicating that investments in energy obtained from conventional sources are still implemented and to a large extent at that (the expansion has been the biggest infrastructural investment in Poland since 1989). The Opolskie region is characterised by substantial excess in acceptable environmental burden (dust pollution, among others). The aim of the paper is to evaluate the key environmental conditions for the Opolskie region’s development in terms of the assumptions of the domestic and EU energy policies. The Opolskie region’s developmental challenges in the environmental area were determined on the basis of selected indicator estimations up to 2030. The research hypothesis assumes that the environmental conditions for the Opolskie region’s development are unfavourable. The methodological part features an analysis of the cause and effect dependencies in the “environment” area, which enabled an assessment of the Opolskie Voivodeship’s current situation as well as an analysis of the dependencies relevant to the region’s development. This was followed by an estimation of selected indicators in the “environment” area until 2030, which allowed for an assessment of their probable levels and thereby a specification of the region’s development conditions. The estimation was conducted using the data available in public statistics, i.e., Statistics Poland’s data. The indicators estimated for 2030 were presented using three forecasting methods: (a) the monotonic trend, (b) the yearly average change rate, and (c) the logarithmic trend.
The growing number of psychology undergraduate programs and increased quotas for existing programs mean increased competition among psychology students for post-graduation career opportunities. Career adaptability becomes an important factor for a person’s employability, career success, and satisfaction under competitive conditions. This study tests a research model formed based on career construction theory with the participation of 355 psychology undergraduates from Istanbul. This model examines participants’ demographic variables regarding their family’s socioeconomic status, childhood environment, personality traits, and positive psychological capital (PsyCap) as antecedents of career adaptability as well as PsyCap’s mediating role in these associations. The results show that, regarding demographic variables, the administrative size of the place where participants spent most of their life positively predicts career adaptability at a low level. Father’s education level was found to have a small negative effect on career adaptability. Openness to experience, conscientiousness, extroversion, and agreeableness are the personality traits that positively predict career adaptability, while neuroticism negatively does. PsyCap acts as a mediator between the five personality traits and career adaptability. Among all the variables, the strongest predictor of career adaptability is PsyCap. As such, making investments in developing university students’ positive psychological resources using university career centers would be a better strategy for preparing young adults for work life. Future studies are recommended to include demographic variables related to middle and high school education and family-related variables such as parents’ personalities, family’s career orientations, and values attributed to children in order to better understand the roles demographic and family-related variables have on career construction. In addition to the theoretical model, data pertaining to the participants’ career objectives were also analyzed. The analysis results reveal 97.2% of the participants to be planning to apply for a master’s degree and 54.6% to have declared pursuing a career in clinical psychology. Considering the scarcity of postgraduate quotas compared to undergraduate quotas, this finding indicates that a significant portion of the participants should be more flexible in managing their post-graduate careers.
Javid Hatam, Maryam Bokharaeian Khorasani, Arash Naderian
et al.
In this research, the impact of clear rumor declarations on the measurement of abnormal stock returns behavior has been investigated in Tehran Stock Market by means of event research so that to reveal well abnormal stock returns behavior. Following testing 169 clear rumor declarations during the period (2017-2019), Using Spss statistical software version 26 and Eviews version 12, the results of regression analysis and correlation tests indicate that content of clear rumor declarations may affect abnormal stock returns behavior. Confirmation of good rumors has increased the efficiency of abnormal stock returns 10 days after the date of the given declaration and approval of bad rumors has led to reducing the efficiency of abnormal stock returns upon declaration day. Similarly, the results showed that if rumors were disclosed during working hours in Tehran Stock Market they would reduce the efficiency of abnormal stock returns on the same day. After comparing the results of the research, the need to educate and promote the shareholding culture among shareholders is felt more than ever before. They also need to shift their focus from focusing on rumors to principled investing in futures stocks to avoid cross-sectional fluctuations, destructive rumors and other market risks and achieve a good return stock
Introduction: The existence of various hazards in rural communities can be considered as a main obstacle in the process of sustainable development in economic, social and civil domains. The greater the risk, the more problematic the national development programs will be. The purpose of development is to improve the quality of life for everyone. Therefore, the effort to achieve development must be such that the majority of people benefit from it. Development should meet the needs primarily by eradicating poverty. Nowadays, a major concern, especially in developing countries, is to reach an acceptable level of development in various dimensions. Meanwhile, rural development is one of the primary and important foundations of the national development of any country. This is because villages still hold a large part of the population and play a significant role to ensure food security and production. Rural development should, therefore, be part of the national development plan, focusing on solving the problems of the rural community and somehow trying to eliminate deprivation and reduce poverty in these areas. Methodology: The present study is applied in nature. The research method is descriptive-analytical, and the data are provided through library and field sources. In the research process, first, the theoretical foundations of environmental hazards and the corresponding records were studied. Then, fourteen items and four factors including readiness, reaction, reduction and recovery were determined. The statistical population of the study consisted of the villages in Nimroz County. Due to the large number of villages there, 20% of them were selected, which included 15 villages with 1890 households. Using the Cochran's formula, a sample size of 320 was selected. The validity of the questionnaire was examined by professors and experts. For this purpose, after compilation, it was provided to experts, specialists and professors. Their opinions were collected, and the necessary corrections were made. Cronbach's alpha coefficient was used to determine the reliability of the study. The alpha value was 0.72, which indicated that the number was desirable. It was also shown that the items designed to measure the indicators were internally correlated. To analyze the data, one-way sample test and multivariate regression analysis were used. Results and Discussion: In this study, 67% of the respondents were male and 33% were female. Also, 59% of the respondents were married and 41% were single. Farmers made up the largest occupational group with a 48% proportion, while employees comprised 14% of the sample. The largest age group with a 33% proportion related to the people of 40 to 50 years of age, and the smallest was the age group of over 60 years. In order to investigate the dimensions of sustainable development in the villages of Nimroz County, a one-sample t-test was used. In this test, according to the range of five Likert options, 3 was considered as the desired average. If the mean obtained was less than the desired average, the effects of drought on the studied item were considered negative and significant. However, if the mean obtained was greater than or equal to the average, the drought would be considered with no or negligible effects. Conclusion: The results of the study showed that the effects of drought on the sustainable development of villages in Nimroz County have been significant. These adverse effects include the reduction of the income from agricultural production and horticultural products, reduction of farming yields and gardening yields, increase of the price of farming crops and the costs of farming production, increase of non-agricultural incomes, reduced capital rural household investments, decrease of the economic value of rural property, decrease in non-agricultural job opportunities, decrease of investment incentives in agriculture, increase in natural risks and investment risks, increased debt to banks and government agencies, decrease of supply production inputs, increase of non-agricultural job opportunities, change of production and agricultural systems, destruction of springs and drying of wells, drastic reduction of groundwater and surface water resources, increase of pests and diseases in gardens, decline of water quality, increased temperature, increased water requirement of orchards, reduced diversity of rangeland forage, soil degradation and erosion, reduction of rangeland production and medicinal herbs, loss of wildlife habitats in the region, increase of invasive plants in rangelands, less willingness of villagers for agricultural activities, increase of rural migration and social tensions, reduced local participation and motivation of assistance among the villagers, reduced equality and justice in the distribution of funds and facilities, weakening of the beliefs and customs of the villagers, increase of psychological problems and rise of false jobs in the studied villages.