Search

With the global expansion of business operations, many U.S. corporations now operate internationally. While these multinational corporations (MNCs) rely on information about their operations to allocate resources, this information is likely dispersed within the firm, leading to internal information asymmetry between top executives and divisional managers. Meanwhile, audits of these geographically dispersed MNCs are challenging, and parts of these audits are sometimes outsourced to local foreign auditors who have no experience serving as opinion-issuing auditors for U.S. issuers ("inexperienced component auditors"). In this article, we examine whether involving such inexperienced component auditors is associated with MNCs' internal information environment. We find that, relative to a matched control sample, Securities and Exchange Commission (SEC) issuers with the participation of inexperienced component auditors have higher internal information asymmetry and lower internal capital allocation efficiency. Our results suggest that audit quality matters not only to a firm's external financial statement users but also to its internal users. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Summary Perennial herbs of seasonal climates invest carbon into belowground storage organs (e.g. rhizomes) to support growth when photosynthetic acquisition cannot cover demands. An alternative explanation interprets storage allocation as surplus carbon that is undeployable for growth when plants are limited by nutrients/water. We analysed relative investments to rhizomes to see to which of these explanations they align, and asked whether they scale with biomass of aboveground organs in individual species and whether clonal growth traits, phenology or environmental conditions explain investment among populations or species. We measured biomass of rhizomes, aboveground stems and leaves in 20 temperate herbaceous perennial species, each at two localities, establishing allometric relationships for pairs of organs. We correlated relative rhizome investment with clonal traits, environmental gradients and phenology, across species. For pairs of organs, biomass typically scales isometrically. Interspecific allocation differences are largely explained by phenology. Neither interspecific nor intraspecific differences were explained by clonal traits or environment. Storage organs of perennial herbs do not comprise deposition of carbon surplus, but receive greater allocation in capital breeders (early‐flowering), than among income breeders (late‐flowering) relying on acquisition during growing season. Capital and income breeders in plants deserve further examination of benefits/costs. [ABSTRACT FROM AUTHOR]

Interregional inequality of public services is accompanied by their combined supply by government and market. This study investigates whether the spatial allocation of regional investment influences inequality and explores the differentiated source of such influence, distinguishing between government investment and private investment in China. Results suggest that the interregional inequality of public services is spatialised by the distorted spatial allocation of investment, which manifests itself as capital market segmentation, and it is aggravated by government investment but relieved by private investment. Such effects derive from differences in local protectionism, interregional competition and capital flow between government investment and private investment. [ABSTRACT FROM AUTHOR]

Using a panel regression approach across 13 developing Asian economies from 1996Q1 to 2019Q4, this paper examines the extent of financial development as a transmission channel for mediating the "allocation puzzle" in capital flows. This puzzle pertains to why capital seems to flow to economies with lower rather than higher productivity growth. We find that while portfolio equity and debt investment flows are negatively related to total factor productivity (TFP) in developing Asia, thereby contradicting the predictions of traditional neoclassical growth models, financial development significantly mitigates this effect. This is particularly the case at earlier stages of financial development and convergence towards a frontier. For foreign direct investment, although we find that there is no direct allocation puzzle in developing Asia, financial development can hamper the stimulatory effect of TFP for highly financially developed economies given diminishing marginal returns. [ABSTRACT FROM AUTHOR]

This study investigates the effects of green innovation (GI) on financial performance under both accounting and market‐based perspectives in European Union (EU) listed non‐financial firms. In addition, this study explores whether the R&D investments and the Environmental, Social and Governance (ESG) disclosure play a mediating role over the association between GI and accounting‐based and market‐based financial performance, respectively. Based on a sample of 526 firms over the period 2012–2022, we find that GI is negatively associated with accounting‐based financial performance and positively associated with market‐based financial performance. We further find that GI impacts on accounting‐based financial performance via the channel of R&D investments and on market‐based financial performance via the channel of ESG disclosure. This study provides useful contributions to prior research by encouraging the adoption of an integrated perspective when evaluating potential effects of GI. This study can also assist managers in better preparing for the challenges of implementing GI by leveraging the ESG disclosure. It also advices to investors to carefully assess the more complex impact of GI on financial performance of the firm within their capital allocation decision‐making process. In the same vein, it offers some insights to policy makers interested in facilitating the transition to a sustainable economy. [ABSTRACT FROM AUTHOR]

To stay competitive, firms regularly invest in innovation by supporting internal capital projects (funded and executed in-house) that explore new products and operational improvements. Each year, in a highly competitive process, managers from different functional units of the firm submit proposals (that include estimated costs and benefits) for such projects. Managers, because of their domain knowledge and expertise, are naturally better informed about the costs and benefits of their respective projects and can use this information strategically to secure funding. An example of such behavior is the under-reporting of the cost estimate of a project and subsequently requesting additional funding during the execution phase. Such strategic behavior not only affects the firm's ability to fund the best projects but is also costly. Motivated by this challenge of deciding the funding of such projects at a global agribusiness firm, we seek a mechanism that is both provably near-optimal for the firm and guarantees truthful reporting from managers. Our setting consists of a principal and multiple agents. In each time period, over an infinite horizon, each agent requests funding for a potential project from the principal. Before submitting his proposal, each agent privately estimates the project's cost and its benefit. If funded, each project is executed in one period. The principal's funding decisions are binary; that is, each project is either funded in full or not funded. The actual cost (benefit) of a funded project is realized on its completion and incurred (earned) by the principal. The agents earn utility from the experience and reputation gained in completing projects. In each period, the principal desires to keep the total spend below a budget but can borrow external money at a cost. Our main contribution is a practically appealing dynamic nonmonetary mechanism for internal capital allocation under which, for any ϵ>0 , (a) truth-telling forms an ϵ-Bayesian Nash equilibrium and (b) the principal's expected utility is within ϵ of the expected utility in the first-best setting. This paper was accepted by Karan Girotra, operations management. Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mnsc.2022.01121. [ABSTRACT FROM AUTHOR]

Capital allocation plays a pivotal role in production factor inputs and technology selection within the production process, exerting a profound influence on technological innovation. Leveraging panel data encompassing 284 prefecture-level cities in China from 2001 to 2019, this paper delves into the impact and underlying mechanisms of interregional capital misallocation on technological innovation. The findings are as follows: (1) The astern coastal regions are experiencing capital overallocation, whereas inland developing areas are prone to undercapitalised. This uneven distribution uncovers a notable ‘Lucas Paradox’ within China's regional capital allocation. (2) Interregional capital misallocation hampers technological innovation. This discernible inhibitory effect persists even after a series of robustness checks. From 2001 to 2019, interregional capital misallocation resulted in an average loss of 2.35 patents per 10,000 people in China. (3) In cities with excessive capital allocation, lower administrative level, insufficient financial development, and non-innovative pilots, this inhibitory effect is more pronounced. (4) Institutional environment destruction, fiscal expenditure bias and enterprise innovation inertia are the main channels through which interregional capital misallocation hindering technological innovation. [ABSTRACT FROM AUTHOR]

Much attention has been devoted to the economic benefits of emission trading systems (ETSs), but research concerning the SO2 ETS in China is scarce. We examine China's SO2 ETS in 2007 from the perspective of industrial sub-sectors and employ the difference-in-difference-in-difference (DDD) model to test whether the SO2 ETS can promote industrial total factor productivity (TFP). We identify whether it is the average effect or the dynamic effect of the SO2 ETS that can improve industrial TFP. The heterogeneity test results indicate that this policy has diverse influence in different regions and industries, and the effect is better in pollution-intensive industries. We also find that the policy enhances industrial TFP by promoting efficient technological innovation and capital allocation. Our findings provide evidence that supports the Porter Hypothesis and a guide for the industrialization of developing countries. Chinese policymakers should strengthen environmental enforcement, set quotas accordingly, and encourage technological innovation to improve industrial TFP. [ABSTRACT FROM AUTHOR]

Scholars propose that future research on real options theory should shift attention away from option buying during the first investment stage and toward option execution after investment. Researchers maintain that it would be interesting to explore the circumstances under which investors decide to withdraw their investments, thereby exercising the option to abandon their investments. The present research seeks to fill the gap in the literature and investigate the applicability of real options theory when an organization enhances sustainability policies while focusing on disciplined capital allocation through exit strategies. With case study data on Natura &Co's divestment strategy for the Body Shop in November 2023, a real options analysis revealed the method's practical advantages and disadvantages. This paper investigates real options theory in the context of the divestments of foreign affiliates, providing unique viewpoints and enhancing the theory beyond previous knowledge while also increasing our understanding of the divestiture phenomenon. This study concludes with a review of this paper's theoretical contributions to real options theory, the managerial and practical/social implications of real options applications in general, and the valuation methods of abandonment options in particular, shedding light on the potential of future research. [ABSTRACT FROM AUTHOR]

Purpose: Although the impact of FDI on the Polish economy is relatively well recognised in the literature, analyses of sectoral differentiation of FDI in Poland are rarely undertaken, so the aim of this article is to establish the relationship between FDI inflows and the development of innovation in the construction materials sector. Design/methodology/approach: The study employs a comprehensive desk research approach, analyzing statistical data on foreign investments This methodology allows for a detailed examination of the correlation between FDI inflow and innovation of construction materials enterprises in the construction materials industry. Findings: The article identifies the nature of innovations generated in the surveyed entities and their penetration into the national environment. Research limitations/implications: If research is reported on in the paper, this section must be completed and should include suggestions for future research and any identified limitations in the research process. The article is an attempt to answer the question: how innovative are entities with foreign capital operating in the construction materials industry in the Polish economy and whether there are spillover effects, to the domestic environment. To be used in economic policy in order to increase the absorption of capital in the form of FDI and increase the innovativeness of the economy Practical implications: Although the allocation of FDI is subject to market mechanisms that enforce innovation as a condition of competitiveness in order to remain competitive, the strengthening of the attractiveness of the capital allocation conditions indicated/identified in the article through a conscious government policy enhances innovation. To be used in economic policy in order to increase the absorption of capital in the form of FDI and thus increase the innovativeness of the economy. Originality/value: Establishing the relationship and conditions between FDI inflows and innovation development in a specific low- and medium-technology sector. [ABSTRACT FROM AUTHOR]

Navigating the stock market's unpredictability and reducing vulnerability to its volatility requires well-informed decisions on stock selection, capital allocation, and transaction timing. While stock selection can be accomplished through fundamental analysis, the extensive data involved often pose challenges in discerning pertinent information. Timing, typically managed through technical analysis, may experience delays, leading to missed opportunities for stock transactions. Capital allocation, a quintessential resource optimization dilemma, necessitates meticulous planning for resolution. Consequently, this thesis leverages the optimization attributes of genetic algorithms, in conjunction with fundamental analysis and the concept of combination with repetition optimization, to identify appropriate stock selection and capital allocation strategies. Regarding timing, it employs deep learning coupled with the Ohlson model for stock valuation to ascertain the intrinsic worth of stocks. This lays the groundwork for transactions to yield favorable returns. In terms of experimentation, this study juxtaposes the integrated analytical approach of this thesis with the equal capital allocation strategy, TAIEX, and the Taiwan 50 index. The findings affirm that irrespective of the Taiwan stock market's bullish or bearish tendencies, the method proposed in this study indeed facilitates investors in making astute investment decisions and attaining substantial profits. [ABSTRACT FROM AUTHOR]

The objective of this paper is to analyze the impact of the product market competition on investment efficiency with the mediating effect of Firm Risk Management through a dynamic panel estimation model. The sample consists of 260 non-financial firms listed on the Pakistan stock exchange for the period of 2010–2022. In addition, this paper analyzes the data through the mediation technique as per a review of the prior literature. Investment efficiency is the primary function of corporate finance. Pakistan being an emerging country is mostly owned by the family-owned business. These businesses have different policies as compared to non-family-owned businesses. This is the empirical indication that product market competition decreases investment efficiency in an emerging economy. The result reveals that in Pakistan, product market competition has a significant negative impact on investment efficiency. Firm Risk Management is also mediating the relationship in line with the prior study. The result supports agency theory, Schumpeterian viewpoint, and capital allocation theory. [ABSTRACT FROM AUTHOR]

Few studies have explored the impact of heterogeneous government investment on corporate bond ratings from the perspective of government social capital allocation. This paper examines the bond market's response to government social capital allocation, utilizing empirical data from the bond ratings of listed companies issued between 2008 and 2020. The analysis begins with a rational explanation, conceptual definition, and index construction of government social capital. The empirical research finds that government social capital allocation significantly enhances corporate credit ratings. Mechanism tests reveal that local governments provide "government support" signals through short-term and long-term borrowing, enabling firms to secure more long-term loans and reduce their default risk. These signals are captured by rating agencies, which then influence the rating outcomes. Heterogeneity tests indicate that the positive impact of government capital allocation on ratings is more pronounced during periods of corporate financial distress. Furthermore, foreign rating agencies are better able to capture signals of government social capital allocation, and their independence confirms that high ratings are not the result of rating inflation. [ABSTRACT FROM AUTHOR]

In the context of risk measures, the capital allocation problem is widely studied in the literature where different approaches have been developed, also in connection with cooperative game theory and systemic risk. Although static capital allocation rules have been extensively studied in the recent years, only few works deal with dynamic capital allocations and its relation with BSDEs. Moreover, all those works only examine the case of an underneath risk measure satisfying cash-additivity and, moreover, a large part of them focuses on the specific case of the gradient allocation where Gateaux differentiability is assumed. The main goal of this paper is, instead, to study general dynamic capital allocations associated to cash-subadditive risk measures, generalizing the approaches already existing in the literature and motivated by the presence of (ambiguity on) interest rates. Starting from an axiomatic approach, we then focus on the case where the underlying risk measures are induced by BSDEs whose drivers depend also on the y-variable. In this setting, we surprisingly find that the corresponding capital allocation rules solve special kinds of Backward Stochastic Volterra Integral Equations (BSVIEs). [ABSTRACT FROM AUTHOR]

Green innovation is essential to sustainable development and carbon neutrality. How to adopt digital technology to promote corporate green innovation (CGI) has become a widespread topic among scholars. This paper examines how digital transformation influences CGI in Chinese non-financial listed companies from 2008 to 2020. Using textual analysis to construct indicators of digital transformation, we find that CGI can be significantly enhanced by enterprise digital transformation in both quantity and quality. We also explore the underlying channels and find that enterprise digital transformation promotes CGI by improving environmental management, human capital upgrading, and resource allocation efficiency. Moreover, we investigate the moderating effects of various factors and conclude that enterprise digital transformation's favorable effects on CGI are more pronounced in companies with good environmental responsibility, labor-intensive industries, high financial risks, intense market competition, and state-owned enterprises, as well as in companies located in regions with strong environmental regulations and a low level of digital economy development. This paper contributes to the literature on green innovation and digital transformation, as well as provides empirical evidence for enterprises in emerging market countries to promote energy saving and green transformation using digital technology. [ABSTRACT FROM AUTHOR]

China is in the stage of rapid development of new urbanization, cities are more vulnerable when facing various risks, and the construction of urban resilience (UR) makes cities more secure. At the same time, the allocation of digital factors has a vital impact on the construction of UR under energy constraints. Based on the panel data of cities in China from 2011 to 2020, this paper studies the influence and mechanism of digital factor allocation (DFA) on UR under energy constraints through panel fixed effect model (FE), mediation effect model, and panel threshold model. The main empirical results include: (1) The misallocation of digital factors has a negative impact on UR. In the case of differences in the division of urban agglomeration, the impact of digital factor misallocation (DFM) on UR will also be different. (2) The misallocation of digital factors has an impact on UR through the intermediary effects of capital allocation efficiency, green innovation and industrial structure upgrading. (3) There is a nonlinear relationship between the DFM and UR. [ABSTRACT FROM AUTHOR]

The functions of the stock market such as investment exit mechanism (IPO), interest incentive and capital allocation are beneficial for corporate to engage in innovation activities with higher risk and longer cycle, but IPO underpricing will hinder the realization of such functions. This paper uses the fixed effect model for empirical analysis and finds that the long-term innovation performance of corporate s with IPO underpricing is poor. Mechanism analysis shows that IPO underpricing corporates will have management myopia, lack of R&D enthusiasm that inhibit corporate innovation. Further analysis shows that the improvement of corporate information transparency and institutional investor field research can alleviate this negative impact can alleviate this negative impact. The conclusion of this paper aims to improve efficiency of the capital market, promote the effective pricing of the capital market, and provide certain reference significance for the relevant policies of the capital market to support the high-quality development of the real economy. [ABSTRACT FROM AUTHOR]

This paper proposes a theory about the allocation of human capital along the development process that helps to understand the controversial impact of this variable in growth regressions. We build a model in which human capital is allocated to three activities: production, tax collection (bureaucracy), and public education. At the first stage of development, countries have low effective tax rates because tax collection requires human capital, which is scarce. As countries accumulate human capital throughout the transition, the effective tax rate rises, diverting human capital from production to bureaucracy and public education. Consequently, at this stage, human capital has a weak impact on production, even when the human capital allocation is efficient. Furthermore, disparities in institutional quality may diminish the correlation between human capital and GDP. [ABSTRACT FROM AUTHOR]

A goals-based methodology built on an intertemporal CAPM (ICAPM) asset allocation framework provides a goal-relative definition of risk for portfolio selection and risk management, efficient capital allocation to fund goals, and efficient goal-aligned subportfolios that accrue to an efficient total portfolio. It offers an elegant goals-based solution for both high-net-worth investors with significant financial assets and retirement accumulators with significant human capital. [ABSTRACT FROM AUTHOR]

Purpose: This study examines the value implications of oil price uncertainty for investors in diversified firms using a sample of 922 USA firms from 2001 to 2019. Design/methodology/approach: Our study employs a panel dataset to examine the value implications of oil price uncertainty for diversified firm investors. We consider several alternative specifications to account for unobserved factors and measurement errors that could potentially bias our results. In particular, we use alternative measures of the excess value of diversified firms and oil price uncertainty, additional control variables, fixed-effects models, the Oster test, impact threshold for confounding variable (ITCV) analysis, two-stage least square instrumental variable (2SLS-IV) analysis and the system-GMM model. Findings: We find that the excess value of diversified firms, relative to a benchmark portfolio of single-segment firms, increases with high oil price uncertainty. The impact of oil price uncertainty is asymmetric, as corporate diversification is value-increasing for diversified firm investors only when the volatility is due to positive oil price changes and amidst supply-driven oil price shocks. The excess value increases irrespective of diversified firms' financial constraints and oil usage. Diversified firms become conservative in their internal capital allocations with high oil price uncertainty. Such conservatism is value-increasing for diversified firm investors, as it supports higher performance in response to oil price uncertainty. Originality/value: Our study has three important implications: first, they are relevant to investors in understanding the portfolio value implications of oil price uncertainty. Second, they are helpful for firm managers while comprehending the value-relevant implications of internal capital allocations. Finally, our findings are policy relevant in the context of the future of diversified firms in developed markets. [ABSTRACT FROM AUTHOR]

The puzzling relationship between foreign private capital flows and productivity remains unresolved. We attempt to resolve the puzzle by extending the literature to investigate the effects of the flows across heterogeneous recipient sectors, using a unique hand-collected database of 18 African countries for 2006–2015. We uncover a new interesting finding that the effects of the flows on productivity growth depend on recipient sectors. The results suggest that the negative relationship between foreign private capital flows and economic growth documented in the existing literature, particularly in developing countries, is related to the fact that most of the flows went into sectors, such as extractives and infrastructure, which have less potential for productivity growth. Overall, our findings suggest that the capital allocation puzzle is a sectoral capital allocation puzzle. [ABSTRACT FROM AUTHOR]

Instantaneous data processing has the potential to enhance scalability, lessen power usage, and permit and improve data presentation in Consumer Internet of Things (CIoT) devices. In simple terms, cloud-based solutions cannot handle many IoT applications. According to Industrialized IoT (IIoT) technologies, an automated resource allocation system can improve service delivery and minimize healthcare costs. To maximize resource usage and response time for end users, there needs to be an effective method to efficiently distribute workload between Fog Layer and Cloud Connection and enhance cloud network capital allocation. Data analytics of complex and vital healthcare data requires timely responses, making it complicated. This paper proposes a design based on the Lanner Swarm Optimization (LSO) algorithm, which was developed to overcome inefficient heuristic strategies where data is transported to the cloud layer based on traffic type. The LSO algorithm is used to improve resource allocation and workload distribution in cloud-assisted CIoT applications for smart healthcare systems, improving scalability, power consumption, and data processing. The objective function determines if diverse virtual machines (VMs) vary accomplishment time the most, considering this study's updating and pruning restrictions. The experimentation analysis demonstrated that the proposed load balancing and work scheduling method outperforms evolutionary and heuristics algorithms. In experimentation, the research model attains a makespan of 10 s, response time of 5.5 s, resource utilization with a rate of 0.9, execution time of 13 s, latency of 10 ms, throughput of 0.78 s, and delivery rate of 0.74%. At resource scheduling, the LSO model had the best payload routing, latency, packet delivery ratio, and network lifetime. [ABSTRACT FROM AUTHOR]

Developing China's high-tech industry is important to make the country innovation-oriented. This requires optimising the allocation of innovation resources and improving innovation efficiency. However, few studies have investigated this topic and the realisation path for the high-tech industry. This study develops an input-oriented inverse data envelopment analysis (DEA) model with frontier changes to analyse the optimisation of resource allocation in China's high-tech industry during 2019–2025. With this method, decision makers can scientifically analyse the specific amount of resource investment. We also construct an analysis framework from short- and long-term perspectives. The results show that the excessive input of research and development (R&D) personnel and unbalanced allocation of capital resources are the main barriers to the development of high-tech industries in the short term, and in the mid- and long terms, the demands for investment in talent and capital will continue to increase. Improvement directions for promoting the development of China's high-tech industry are discussed. Finally, we present valuable information for policymaking to promote progress in high-tech industries in different regions. [ABSTRACT FROM AUTHOR]

In order to save transaction costs, a sparse portfolio that consists of a small subset of the constituent stocks is commonly requested especially when the target index has a large number of assets. To the best of our knowledge, a large body of literature on sparse index tracking are mainly focus on the penalized least squares estimation under the no-short selling constraint. Accordingly, these procedures are highly sensitive to outliers and their efficiency may be significantly decreased when the noise distribution is unknown and possibly heavy-tailed. As promising alternatives, robust loss functions such as L1 loss and Huber's loss have been well characterized in penalized M-estimation techniques. This paper considers robust sparse portfolios to simultaneously perform stock selection and capital allocation for high-dimensional index tracking. Through the simulation, we show that newly proposed approach is resistant to heavy-tailed errors or outliers in the response. Finally, we illustrate the superior performance of the proposed method through tracking the Standard & Poor's 500 Index. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Technology Economics is the property of Chinese Society of Technology Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We investigate capital allocation based on the higher moment risk measure at a confidence level q ∈ (0 , 1) . To reflect the excessive prudence of today's regulatory frameworks in banking and insurance, we consider the extreme case with q ↑ 1 and study the asymptotic behavior of capital allocation for heavy-tailed and asymptotically independent/dependent risks. Some explicit asymptotic formulas are derived, demonstrating that the capital allocated to a specific line is asymptotically proportional to the Value at Risk of the corresponding individual risk. In addition, some numerical studies are conducted to examine their accuracy. [ABSTRACT FROM AUTHOR]

Traditional mean-variance (MV) models, considered effective in stable conditions, often prove inadequate in uncertain market scenarios. Therefore, there is a need for more robust and better portfolio optimization methods to handle the fluctuations and uncertainties in asset returns and covariances. This study aims to perform a Systematic Literature Review (SLR) on robust portfolio mean-variance (RPMV) in stock investment utilizing genetic algorithms (GAs). The SLR covered studies from 1995 to 2024, allowing a thorough analysis of the evolution and effectiveness of robust portfolio optimization methods over time. The method used to conduct the SLR followed the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) guidelines. The result of the SLR presented a novel strategy to combine robust optimization methods and a GA in order to enhance RPMV. The uncertainty parameters, cardinality constraints, optimization constraints, risk-aversion parameters, robust covariance estimators, relative and absolute robustness, and parameters adopted were unable to develop portfolios capable of maintaining performance despite market uncertainties. This led to the inclusion of GAs to solve the complex optimization problems associated with RPMV efficiently, as well as fine-tuning parameters to improve solution accuracy. In three papers, the empirical validation of the results was conducted using historical data from different global capital markets such as Hang Seng (Hong Kong), Data Analysis Expressions (DAX) 100 (Germany), the Financial Times Stock Exchange (FTSE) 100 (U.K.), S&P 100 (USA), Nikkei 225 (Japan), and the Indonesia Stock Exchange (IDX), and the results showed that the RPMV model optimized with a GA was more stable and provided higher returns compared with traditional MV models. Furthermore, the proposed method effectively mitigated market uncertainties, making it a valuable tool for investors aiming to optimize portfolios under uncertain conditions. The implications of this study relate to handling uncertainty in asset returns, dynamic portfolio parameters, and the effectiveness of GAs in solving portfolio optimization problems under uncertainty, providing near-optimal solutions with relatively lower computational time. [ABSTRACT FROM AUTHOR]

The construction of ecological civilization and the realization of common prosperity are two major development strategies in China. In the context of ecological civilization construction, it is essential to achieve common prosperity through reforming the natural resource assets property rights system. This article qualitatively analyzes the functions of the natural resource assets property rights system by adopting the methods of functional analysis and interdisciplinary analysis and empirically analyzes its associated logic with the common prosperity by using the case analysis method. The results indicate that: ① There are four basic functions (marketization, capitalization, resource allocation, and ecologicalization) in the natural resource assets property rights system. ② In the process of utilizing natural resources to achieve common prosperity, the marketization function of the natural resource assets property rights system can transform natural resources into natural assets; the capitalization function can transform natural assets into natural capital; the resource allocation function can optimize the allocation of natural resources; and the ecologicalization function can preserve and increase the value of natural resources, thus achieving a win-win situation between ecological civilization construction and common prosperity. ③ Common prosperity cannot be achieved alone by utilizing natural resources; the achievement of common prosperity by utilizing natural resources is actually the result of the reform of the natural resources system and the property rights system. The policy implications of this study include: ① In terms of perfecting the property rights system, China's natural resource assets property rights system should be improved in the context of total factor productivity. ② In dealing with the relationship between the government and the market, we should make scientific distinctions between market allocation and government guidance according to different types of resource classification, making the market play a decisive role in resource allocation. ③ In maintaining the order of market transactions, the Civil Code should be used to protect the transactions of natural resource assets property rights. [ABSTRACT FROM AUTHOR]

Since the late 1970s, Singapore has been an important policy reference for China. Some Chinese policymakers viewed Temasek, its government holding company, as a model for state asset management. They studied Singapore's approach, but ultimately chose a different institutional design when establishing the State-Owned Assets Supervision and Administration Commission (SASAC) in 2003. China's engagement with Temasek subsequently concentrated on corporate governance, specifically boards of directors in state-owned enterprises (SOEs). Yet despite the Temasek model's appeal, its influence in China was limited by the far greater size and indebtedness of the state sector; the weaker role of firm performance in asset and capital allocation; SOEs' numerous social and welfare functions; lack of willingness to augment firm autonomy; and divergent interpretations of the Temasek model and its reference value. "Policy collage" by Chinese policymakers explains the existence of formal similarities between China and advanced capitalist economies without fundamental convergence in function. [ABSTRACT FROM AUTHOR]

This paper explores the intricate relationship between macroeconomic indicators and imperfect competition in Sierra Leone, employing a prototype of an imperfect competition structural model within the New Keynesian framework. The model incorporates nominal and real rigidities, as well as market failures. Results indicate that Sierra Leone's imperfectly competitive market introduces inefficiencies, leading to a muted initial impact of productivity shocks on macroeconomic variables. Wages and real interest rates exhibit moderated adjustments due to deviations from perfect competition ideals, dampening the effects on investment, consumption, and output. Policy and transition functions reveal a lasting influence of past capital accumulation and external shocks on aggregate output. The analysis exposes inertia in investment decisions and strategic actions of dominant firms. Steady-state results affirm a stable equilibrium in Sierra Leone, and eigenvalues exceeding unity underscore the model's ability to capture anticipatory behavior in imperfect market competition. The correlation matrix highlights profound connections between economic activity, wages, and capital's role in growth. Theoretical moments demonstrate economic indicator variability, emphasizing dominant firms' influence on capital allocation and policy measures' role in stabilizing interest rates and labor markets. The covariance matrix of exogenous shocks underscores external influences' persistence and correlated impacts on Sierra Leone's economy. These findings stress the importance of tailored policy responses to address market imperfections, advocating for measures to promote competition, labor market flexibility, dynamic investment, and stabilization of interest rates and labor markets. [ABSTRACT FROM AUTHOR]

Copyright of Opuntia Brava is the property of Universidad de Ciencias Pedagogicas de Las Tunas, Centro de Documentacion e Informacion Pedagogica and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The public sector banks dominate India's financial sector and play a crucial role. Commercial banks are indispensable in the processes of capital circulation, capital integration, capital resource allocation, and overall societal demand and supply adjustment. But performing these vital roles, the commercial banks are associated with different risks out of which credit risk hampers them a lot. This risk attacks the major pillar of the banking industry i.e., solvency on which the industry survives. In this paper, a modest attempt is made to identify the bank-specific determinants of credit risk in the public sector commercial banks in India. Data was collected from the RBI database for the period 2005 to 2020 for 13 banks. Variables pertaining to credit risk, bank size, capital adequacy ratio, profitability, liquidity and diversification were taken. These variables were analysed with the help of different panel data analytical tools. The size of the bank, represented by the log of total assets, and diversification, measured as the ratio of non-interest income to total income, were found to positively and significantly influence credit risk in public sector commercial banks. The Return on Asset, Loan-deposit ratio, and Capital adequacy ratio were found to be negatively correlated with credit risk. [ABSTRACT FROM AUTHOR]

The dominance of modern rationality in knowledge production implies that the distribution of intellectual capital highly depends on the capacity to gather representative data and generate generalizable theses. Furthermore, as research becomes more formalized and dominated by large funding schemes, intellectual capital allocation is increasingly associated with high economic, labor force and institutional power. This phenomenon has consequences at the global level. As the United Nations Educational, Scientific and Cultural Organization (UNESCO) has documented, there are significant disparities between countries in research capacities, with a marked difference between "core" countries with semi-monopolies over sanctioned knowledge production and "peripheral" states primarily used as data mines. The core–periphery divide in research capacity brings about what decolonial theorists call knowledge abysses: the widespread idea that core countries are the ultimate knowledge producers and thus the legitimate guides in humanity's road to "progress." In that context, the democratization of knowledge and the prevention of neo-colonial dynamics require the development of cheaper and more accessible ways of collecting representative data. In this article, we make a call for innovations in methods that can serve to overcome this, and we illustrate possible avenues for achieving sound research without incurring high financial costs by describing and discussing our experiences in researching narco-violence in Colombia and prostitution in Russia with what we call the "taxi method." [ABSTRACT FROM AUTHOR]

This article contributes to discussions on why Chinese investments in Pakistan cover a wide variety of energy sectors, whereas capital allocation in Indonesia is concentrated in a narrow set of actors and energy sources (coal). While others have highlighted micro-, macro-, and meso-level dimensions, this research looks at the Chinese Ministry of Commerce's (MOFCOM) communication as a further factor to steer Chinese project financing. By exposing a set of 281 MOFCOM statements to quantitative and qualitative discourse analysis, my findings reveal that MOFCOM publications offer more incentives for private participation in Pakistan than in Indonesia, as represented by the greater number of actors and projects listed, as well as the types of public policy instruments deployed. Besides theoretical contributions to steering theory, the study offers practical suggestions on how China can diversify investments to create more sustainable energy outcomes along the Belt and Road. [ABSTRACT FROM AUTHOR]

Existing portfolio management models based on deep reinforcement learning adjust funds dynamically by constructing an action space with specific trading behaviors. However, this method cannot effectively adapt to complex investment environments. This paper proposes an LSTM-ER-DCPPO portfolio management model based on the improved PPO algorithm. The model provides stable policy learning, enhanced strategy exploration, and trend identification, enabling more precise capital allocation through continuous asset weight output. To evaluate the model, a simulated market trading environment based on real stock data was created. The experimental results show that the LSTM-ER-DCPPO model achieved an annualized return of 58.62%, a maximum drawdown of 8.53%, a Calmar ratio of 6.873, and a Sharpe ratio of 2.434, outperforming other benchmark models. [ABSTRACT FROM AUTHOR]

We empirically examine the interaction between different types of diversification (stage, industry, geography) and portfolio size, i.e., number of investee companies, in explaining venture capital (VC) funds' returns. We study a comprehensive dataset of 422 liquidated US VC funds to conduct multiple analyses in a large timeframe. The results show that large portfolio size and diversification in a limited number of industries contribute positively to fund performance, while stage and geographical diversification have no significant relationship with returns. Our findings can support both the practice of VC portfolio management in reaching better capital allocation efficiency and policymakers in providing guidance for VC fund development programmes backed by sovereign and international institutions. [ABSTRACT FROM AUTHOR]

Exploring enterprise carbon performance (ECP) via green capital allocation is important for achieving the dual carbon goal. In this article, the impact of the green credit policy (GCP) on ECP is empirically examined using a difference-in-differences model. The results show that GCP significantly improves ECP, and this conclusion remains valid after a series of robustness tests. Low-carbon technology and carbon information disclosure are central transmission mechanisms that are positively adjusted by green consumption, environmental regulation, and marketisation degree. Furthermore, state-owned and declining enterprises are affected more strongly by GCP than non-state-owned, growing, and mature enterprises. The impact of GCP on ECP increases over the enterprise life cycle. [ABSTRACT FROM AUTHOR]

Over the last few years, the financial performance of district/city governments in Jambi province has decreased. This condition can be seen from the regional financial independence which is still very low. Therefore, this research aims to analyze more deeply the influence of local revenue, balancing funds, and fiscal stress on regional government financial performance, both direct and indirect influences through capital expenditure. This research is quantitative descriptive. The research was conducted in all districts/cities in Jambi province and used secondary data. Data was obtained through the BPK-RI Jambi Province Representative page in the form of audited regional government financial reports with an observation period from 2017-2022. The data analysis method uses the path analysis method. The study's findings demonstrate that original revenue that is largely generated locally and balancing funds have a major and favorable impact on capital spending. Capital spending is not significantly impacted by fiscal stress. The financial performance of local governments is not significantly impacted by local revenue or fiscal strain. The financial performance of local governments is significantly and negatively impacted by partly balancing funds. The financial performance of local governments is positively and significantly impacted by capital expenditures. Additionally, it was shown that capital spending might moderate the impact of balancing budgets on the financial performance of local governments. But, capital spending does not mitigate the impact of local revenue and fiscal strain on the financial performance of local governments. This research has implications for formulating policies to increase local original income, determining the allocation of capital expenditure and improving the financial performance of regional governments in districts/cities in Jambi province. [ABSTRACT FROM AUTHOR]

The literature on dual holding focuses exclusively on cases where the holder is primarily a creditor and buys the firm's stocks to reduce potential wealth transfer. However, wealth transfer is not a concern when the dual holder is a stockholder first and becomes a bondholder later. We hypothesize that the principal motive behind such dual holdings is to provide debt funding to an otherwise successful firm that cannot fund good projects because of internal capital allocation problems coupled with external capital constraints. We select samples from multinational corporations based on evidence that these firms are exposed to domestic underinvestment because they are reluctant to bring back foreign profits to avoid repatriation taxes. We choose hedge funds (HFs) as dual holders. The treatment group comprises firms where HFs are dual owners, and the control group comprises firms in which HFs own stocks only. The treatment group experiences steeper financial constraints, leading to deeper underinvestment problems and causing target firms to seek HF funding. The funding corresponds well to the amount of underinvestment. Targets improve investment efficiency by alleviating underinvestment, surpassing their predual performance and the control group's postdual performance. [ABSTRACT FROM AUTHOR]

The Yangtze River Economic Belt serves as a paradigm of ecological integration and high-quality development within China. Under the constraints of the "Dual Carbon" goal, how does the integrative policy of the Yangtze River Economic Belt, aimed at reinforcing inter-regional industrial cooperation, impact carbon emissions across various provinces within the region? Leveraging panel data from 30 Chinese provinces spanning 2009–2019 and treating the 2016 promulgation of the "Yangtze River Economic Belt Development Planning Outline" as a quasi-natural experiment, this study employs a Difference-in-Differences (DID) model for discerning the effects of regional integration policies on carbon emissions, intensity, and efficiency in the 11 provinces of the Yangtze River Economic Belt. The research further delves into the underlying mechanisms through which policy interventions modulate provincial carbon emissions. Key findings include: (1) The policy's enactment has significantly attenuated provincial carbon emissions and intensity, albeit somewhat hampering the enhancement of carbon efficiency—conclusions robust to parallel trend and placebo tests; (2) Heterogeneity analyses reveal disparities in the policy's carbon emission effects, contingent on varying economic development levels and geographical loci; (3) Mechanistically, while the integration bolsters regional environmental governance and strengthens economic ties—thereby curtailing provincial emissions—it is evident that local governments have been somewhat inept in effectively channeling the influx of substantial short-term capital, hence stifling provincial carbon efficiency. In light of these insights, it is posited that local governments within the Yangtze River Economic Belt should ardently endeavor to refine and elevate regional industrial structures, champion the construction of an integrated regional market, intensify capital oversight and coordinated utilization, and enhance the efficiency of regional capital allocation, all in the quest to augment regional carbon emission reduction performance. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of China's accelerated depreciation policy on within-firm pay gap. We exploit a firm-level panel data from China's A-share listed companies and estimate the policy effects by constructing a difference-in-differences model. Results show that the accelerated depreciation policy significantly increases the within-firm pay gap of firms of pilot industries than those of non-pilot industries, and this finding continues to hold after accounting for other contemporaneous shocks and is robust to a battery of robustness checks. Our mechanism tests demonstrate that, the rank-and-file employees replaced by the use of capital rather than executives, dominates the positive nexus between within-firm pay gap and accelerated depreciation policy. This effect is more pronounced for firms with higher tax burden, stronger financing constraint and higher capital intensity. We also find that China's accelerated depreciation policy improves overall capital allocation efficiency and labor allocation efficiency. Our findings provide a deep understanding of the link between tax incentives and within-firm pay gap, especially from the perspective of factor allocation. [ABSTRACT FROM AUTHOR]

For financial index tracking, it is desirable to build a sparse portfolio of a small number of assets to save transaction costs. For all we know, a majority of the pertinent literatures on sparse index tracking are mainly concentrated on the penalized least squares estimation under the cardinality and no short-selling constraints. Nevertheless, the return series of financial index often exhibit outliers, and thus the above literatures may fail to produce a robust solution for index tracking. In this paper, we indeed to provide a general procedure to build robust portfolio that can undertake stock selection and capital allocation for financial index tracking. To be more realistic, we further take the full investment constraint (or budget constraint) into consideration. Numerical simulations indicate that the proposed method has good resistance to heavy-tailed error and outlier contamination. Finally, the out-of-sample performance of the new portfolios is compared empirically by tracking the SSE 50 index and FTSE China A50 index. [ABSTRACT FROM AUTHOR]

In this paper, we study capital allocation for dynamic risk measures, with an axiomatic approach but also by exploiting the relation between risk measures and BSDEs. Although there is a wide literature on capital allocation rules in a static setting and on dynamic risk measures, only a few recent papers on capital allocation work in a dynamic setting and, moreover, those papers mainly focus on the gradient approach. To fill this gap, we then discuss new perspectives to the capital allocation problem going beyond those already existing in the literature. In particular, we introduce and investigate a general axiomatic approach to dynamic capital allocations as well as an approach suitable for risk measures induced by g-expectations under weaker assumptions than Gateaux differentiability. [ABSTRACT FROM AUTHOR]

A Systemic Optimal Risk Transfer Equilibrium (SORTE) was introduced in: "Systemic optimal risk transfer equilibrium", Mathematics and Financial Economics (2021), for the analysis of the equilibrium among financial institutions or in insurance-reinsurance markets. A SORTE conjugates the classical Bühlmann's notion of a risk exchange equilibrium with a capital allocation principle based on systemic expected utility optimization. In this paper we extend such a notion to the case when the value function to be optimized is multivariate in a general sense, and it is not simply given by the sum of univariate utility functions. This takes into account the fact that preferences of single agents might depend on the actions of other participants in the game. Technically, the extension of SORTE to the new setup requires developing a theory for multivariate utility functions and selecting at the same time a suitable framework for the duality theory. Conceptually, this more general framework allows us to introduce and study a Nash Equilibrium property of the optimizer. We prove existence, uniqueness, and the Nash Equilibrium property of the newly defined Multivariate Systemic Optimal Risk Transfer Equilibrium. [ABSTRACT FROM AUTHOR]

Using the green finance policies (GFPs) in China as a shock to capital allocation, we find that the implementation of GFPs improves audit quality for green firms. Specifically, green firms are likely to receive favorable audit opinions, pay lower audit fees, and generate higher-quality financial reports after the implementation of GFPs. When examining the mechanisms through which GFPs affect audit risk for green firms, we find that green firms are likely to experience lower financial risks and have access to more bank loans at a lower cost after the implementation of GFPs. Further analysis shows that the main results are more pronounced when GFPs are better enforced, where auditors face more government intervention, and where firms are financially constrained. Overall, we document that GFPs decrease financial risk for green firms and have a positive spillover to auditors by mitigating audit risk. [ABSTRACT FROM AUTHOR]

Purpose: Under the concept of sustainable development guided by 'carbon peak' and 'carbon neutral', corporate social responsibility (CSR) performance has become the focus of attention in all sectors of society. With the gradual deepening of China's 'new economic normal' development, firms face increasing environmental uncertainty in the market. This study aims to embed CSR, financial flexibility (FF), institutional investors (INST), and corporate value into the same theoretical framework and conduct heterogeneity analysis on the nature of property rights, heavily polluting industries, and marketisation level. Design/Methodology/Approach: Based upon the observation data of listed firms in Shanghai and Shenzhen A‐shares in China from 2011 to 2021, this study uses Stata software for data processing, analysis, and two‐stage least‐squares (2SLS) models to solve endogenous problems. Findings: The research results show that improving CSR performance increases corporate value, while INST and FF moderate the relationship between them. Further heterogeneity analysis found that the nature of property rights, heavily polluting industries, and marketisation level have different impacts on these moderating effects. This result provides ideas for clarifying the economic impact of enhancing the firms' CSR performance in the current era. Originality/Value: First, from the standpoint of CSR performance, it enhances the literature on the key corporate values in China. Second, from the perspective of corporate value, it has enriched the CSR literature and provided a new perspective for further clarifying the significance of improving the CSR performance of firms at this stage. Third, from the perspective of INST and FF, this research examines the moderating mechanism of CSR performance on corporate value. Hence, it provides a reference for further improving the efficiency of resource allocation in the capital markets. [ABSTRACT FROM AUTHOR]