scholarly journals The nonlinear relationship between financial flexibility and enterprise risk-taking during the COVID-19 pandemic in Taiwan?s semiconductor industry

2021 ◽  
Vol 12 (2) ◽  
pp. 307-333
Author(s):  
Bao-Guang Chang ◽  
Kun-Shan Wu
Keyword(s):  
Risk Taking ◽  
Fixed Effects ◽  
Semiconductor Industry ◽  
Value Added ◽  
Global Market ◽  
Manufacturing Industries ◽  
Financial Flexibility ◽  
Ic Manufacturing ◽  
Enterprise Risk ◽  
The Impact

Research background: Risk-taking is the basis for sustainable development of enterprise. It was clear that the influence COVID-19 epidemic on the global market economy has increased operational risks for businesses. The semiconductor industry has high operating risks and financial risks. Moderate financial flexibility (FF) can improve the ability of semiconductor enterprises to acquire financial resources in real time, calmly cope with the impact of uncertainties in operation, improve investment opportunities, and enhance sustainable operation. It is therefore interesting to study the influence of FF on enterprise risk-taking (ERT). Purpose of the article: The aim of the contribution is to explore the effect of FF on ERT within Taiwan?s semiconductor industry amid the COVID-19 pandemic period, and investigate whether ERT varies with semiconductor industry characteristic. Methods: Data from first three quarters of 2020, from multinational semiconductor firms listed on the Taiwan Stock Exchange (TSE), were collected and analyzed. Fixed effects regression with heteroscedasticity adjustment used to evaluate the influence of FF on the ERT of Taiwan?s semiconductor industry. Furthermore, in order to corroborate and support the reliability of the results, this research also used the different measures of ERT and Quantile regression (median regression) in the research model to check the robustness. Findings & value added: Empirical results indicate that FF has a U-shaped effect on ERT for multinational semiconductor firms listed on the TSE, particularly within the integrated circuits (IC) manufacturing industry. Additionally, FF also has a U-shaped effect on ERT for the asset-light semiconductor and IC manufacturing industries. This article also suggests that for the asset-light semiconductor and IC manufacturing industries, the optimal inflection points are 1.1397 and 0.9729, respectively. Based on the consequences of this study, it is suggested that Taiwan?s semiconductor industry should reasonably maintain FF and focus on the liquidity risk management for the long term value added, even after the COVID-19 pandemic period.

The impact of bank liquidity risk on risk-taking and bank lending: evidence from European bank

2021 ◽  
Vol 6 (2) ◽  
pp. 82-97
Author(s):  
Hongyan Liang ◽  
Zilong Liu
Keyword(s):  
Growth Rate ◽  
Risk Taking ◽  
Fixed Effects ◽  
Liquidity Risk ◽  
Bank Lending ◽  
Basel Iii ◽  
European Banks ◽  
Risk Taking Behavior ◽  
Loan Growth ◽  
The Impact

Objective – This paper uses a sample of annual observations of European banks to examine whether the liquidity risk affects a bank’s risk-taking behavior and its future loan growth. Methodology – A sample of European banks (27 member countries of the European Union plus U.K.) over the period of 2005 to 2019 are used in this study. Liquidity risk is measured by the ratio of liquid assets to total assets. Given the longitudinal nature of the data, the authors use panel regression with bank fixed effects to control for unobserved characteristics that might affect the dependent variable. Findings – The authors find that banks holding more liquid assets take less risk and show a higher subsequent loan growth rate. These results hold for both small and large banks. Novelty – To the authors’ best knowledge, this is one of the earliest studies to carefully examine the effects of liquidity risk on risk-taking behavior and loan growth rate for European banks. Our research suggests that the current Basel III requirement on liquidity ratio can decrease bank’s risking-taking behavior while not necessarily impact their future loan growth. Type of Paper: Empirical JEL Classification: G21, G01, G18. Keywords: Bank Liquidity Risk; Risk-taking Behavior; Loan Growth; Basel III

Capital regulation, competition and risk-taking behavior of Indian banks in a simultaneous approach

2018 ◽  
Vol 44 (4) ◽  
pp. 459-477 ◽  
Author(s):  
Santi Gopal Maji ◽  
Preeti Hazarika
Keyword(s):  
Human Capital ◽  
Risk Taking ◽  
Value Added ◽  
Capital Adequacy ◽  
Bank Risk ◽  
Capital Regulation ◽  
Content Type ◽  
Risk Taking Behavior ◽  
Indian Banks ◽  
The Impact

Purpose The purpose of this paper is to investigate the association between capital regulation and risk-taking behavior of Indian banks after incorporating the influence of competition. Further, the study intends to enrich the existing literature by providing empirical evidence on the role of human resources in managing risk along with the influence of other bank specific and macroeconomic variables. Design/methodology/approach Secondary data on 39 listed Indian commercial banks are collected from “Capitaline Plus” corporate data database for a period of 15 years. Capital is measured by capital adequacy ratio as defined by the regulators, and two definitions of risk – credit risk and insolvency risk – are employed. Competition is measured by Herfindahl-Hirschman deposits index, concentration ratio and H-statistic. The value-added intellectual coefficient model is employed to compute human capital efficiency (HCE). Three-stage least squares technique in a simultaneous equation framework is used to estimate the coefficients. Findings The study finds that absolute level of regulatory capital and bank risk are positively associated, although the influence of capital on risk is not statistically significant. The influence of competition on risk is negative for all the models, which supports the “competition stability” view. The impact of human capital on bank risk is also negative for all cases. Practical implications The findings of the study are useful for the decision makers in several ways based on the inverse influence of competition and HCE on bank risk. Further, the observed positive association between capital and risk indicates that the capital regulation is not sufficient to enhance the stability in the banking sector. Originality/value This is the first study in the Indian context that incorporates the competition in the banking industry as an explanatory variable in the extant bank capital and risk relationship.

Intellectual capital efficiency and market-based financial performance: Evidence from listed conglomerate companies

2021 ◽  
Vol 2 (2) ◽  
pp. 31-42
Author(s):  
Eniola Ayisat Sulaiman ◽  
Abubakar Sadiq Kasum ◽  
Wasiu Ajani Musa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Fixed Effects ◽  
Value Added ◽  
Secondary Data ◽  
Lagrangian Multiplier ◽  
Fixed Effects Model ◽  
Analysis Technique ◽  
Capital Efficiency ◽  
The Impact

Having observed the rate at which dissimilarity occurs between market and book value, and management ignorance concerning the impact intellectual capital disclosure has on companies’ values spurred the interest to probe the association between the efficiency of value-added intellectual coefficient (VAIC) and market-based financial performance of listed Nigerian conglomerate companies. To accomplish the purpose of this study, secondary data were employed and extracted from annual audited reports of listed conglomerate companies in Nigeria from the period of 2010–2018. The data obtained were subjected to static panel data regression analysis technique. The random-effects model was adopted because the empirical result from Breusch and Pagan Lagrangian multiplier (BP-LM) and Hausman tests chose it over the fixed-effects model to produce better results. This study revealed that the value-added efficiency of capital employed (VACA), value-added efficiency of human capital (VAHU), and value-added efficiency of structural capital (STVA) are the drivers of intellectual capital in the conglomerate sector. This study concluded that elements of intellectual capital have a strong power on market-based financial performance. This study recommends that information on intellectual capital components should be reported in ways they deem fit by developing a model of intellectual capital disclosure that complies with the International Accounting Standard Board (IASB)

scholarly journals The Impact of Banking Sector Competition on Banks’ Risk-Taking in Transition Economies of Central and South-Eastern Europe

2018 ◽  
Vol 13 (1) ◽  
pp. 31-42
Author(s):  
Arben Mustafa ◽  
Valentin Toçi
Keyword(s):  
Eastern Europe ◽  
Risk Taking ◽  
Fixed Effects ◽  
Banking Sector ◽  
Negative Impact ◽  
Eu Countries ◽  
South Eastern ◽  
South Eastern Europe ◽  
The Impact ◽  
The Eu

Abstract This paper uses the Panzar-Rosse H-statistic to provide empirical evidence on the impact of competitive behaviour of banks on risk-taking, using the Fixed Effects Vector Decomposition Method on panel data of banks in 15 Central and South-Eastern Europe countries during the period 1999-2009. The findings suggest that banking sector competition has had a negative impact on banks’ risk-taking implying that competition contributed to the improvement of the loan-portfolio quality. However, the results differ significantly when distinguishing between the EU and non-EU countries of the CESEE region. While for the EU countries the relationship between banking sector competition and risk-taking remains negative, this relationship is positive for the non-EU countries of the region, suggesting that an increase of competition in the non-EU countries may be detrimental for the stability of the banking sector in these countries. These results are robust to different model specifications and measures of competition

scholarly journals Value-added analysis of the electric vehicle battery industry in Indonesia

2021 ◽  
Vol 882 (1) ◽  
pp. 012079
Author(s):  
I Suherman ◽  
S Rochani ◽  
D Cahyaningtyas
Keyword(s):  
Electric Vehicle ◽  
Value Added ◽  
Global Market ◽  
Battery Cell ◽  
A Value ◽  
Acid Leach ◽  
Global Player ◽  
Electric Vehicle Battery ◽  
The Impact ◽  
Battery Industry

Abstract The establishment of the Indonesian Battery Corporation is a step forward to make Indonesia a global player in the electric vehicle battery industry. This state-owned consortium is mandated to develop an integrated electric vehicle battery industry ecosystem from upstream to downstream. Indonesia has around six companies developing High-Pressure Acid Leach processing and refining projects. Battery production for Indonesian electric vehicles is estimated to contribute approximately 12.7% to the global market by 2035. A value-added analysis approach model is estimated to increase Gross Domestic Product by $21,434 billion. In addition, the impact on job creation is around 42,603 people. This estimation can be implemented with some supports, such as partners with proven technology and significant capital to build the precursor and cathode industries, battery cell and battery industries, and the electric vehicle industry and policies related to development.

scholarly journals Impact of Global Changes of the Pandemic Crisis on Business Models of Transport Companies

2021 ◽  
Vol 92 ◽  
pp. 01058
Author(s):  
Natalia Zhuravleva ◽  
Liana Chechenova
Keyword(s):  
Business Model ◽  
Coming Out ◽  
Business Models ◽  
Value Added ◽  
Global Market ◽  
Commodity Markets ◽  
Transport Sector ◽  
Global Changes ◽  
Transport Services ◽  
The Impact

Research background: The coming period of the world economy coming out of the pandemic crisis will seriously change the situation in the cargo and passenger segment. According to the assessment of the current situation, in the global market there is a violation of the usual ties between producers and consumers, an imbalance in transport flows associated with changes in demand. At the same time, in a crisis, rail transport is the main tool, since a significant amount of anti-epidemic protective equipment from China was transported by trains. It is clear that in the near future the dynamics of the market depends, first of all, on the further development of events and measures of state support for industries and businesses. Purpose of the article: The purpose of this research is to score the factors of the post-crisis state of transport sector: alterations in the gravity of commodity markets, modifications of valuable preferences assessment of the shipper and the passenger, that change the business model of transport companies. Methods: Standard methods of scientific research are used: theoretical and experimental; complex methods of analysis and evaluation of business models: a complex scheme for developing a business model, a canvas and a conceptual scheme of a business model; methods of qualitative data analysis. Findings & Value added: Factors changing the transport business model are systematized. The research estimates a change probability in the gravity of commodity markets towards Asian countries, the consequences of the influence of digital technology on the efficiency of the transport business and the shift in the value of transport services in the line of high speeds. It shows the impact of the post-pandemic economy, which has formed new habits, passenger behavior on passenger companies’ operations. The research justified crisis effects resulting in the deterioration of the competition in the transport markets.

scholarly journals Globalization and Bankruptcy of SMEs in Slovakia

2021 ◽  
Vol 92 ◽  
pp. 07015
Author(s):  
Jaroslav Dado ◽  
Lenka Hvolkova ◽  
Janka Taborecka
Keyword(s):  
Value Added ◽  
Structured Interview ◽  
Business Environment ◽  
Global Market ◽  
Market Potential ◽  
Negative Consequences ◽  
Negative Effects ◽  
Market Opportunities ◽  
Evidence Of Impact ◽  
The Impact

Research background: Globalization - the process of increasing social, cultural, political, and economic interdependence - has resulted in several changes in business environment. Global market opportunities and threats are major effects of globalization; they refer to the increases in market potential, trade and investment potential and resource accessibility. Global market threats refer to the increases in the number and level of competition, and the level of uncertainty. Global competitors can have the impact on bankruptcy of local SMEs in less developed or smaller countries. Are globalization in economics and company bankruptcy related? In the past, the cause of bankruptcy was mainly in the company itself. The development of globalization has brought a number of positive as well as a number of negative consequences for several areas of society. Is one of the negative effects of globalization the bankruptcy of companies? Purpose of the article: The paper presents a classification of external and internal causes of bankruptcy and indicators of the threat of company bankruptcy. The paper also focuses on the results of the research analysis about the causes of small and medium-sized enterprises mortality in Slovakia and the impact of globalization factors as the causes of their bankruptcy. The analysis of bankruptcies is oriented on the research of the causes of small and medium-sized enterprises mortality in Slovakia and the influence of globalization factors as the causality of their bankruptcy. Methods: The research sample presents structured interview with 16 SMEs´ owners. They identified more aspects of globalization impact to Slovak SMEs bankruptcy. Findings & Value added: The results of research indicate that there is an evidence of impact of globalization on the bankruptcy of SMEs in Slovakia, but there are some differences among various industries.

scholarly journals The Impact of Structural Changes in the Indian Manufacturing Industries: 1980-2013

2018 ◽  
Vol 10 (2) ◽  
pp. 6-16
Author(s):  
Gholamreza Fathipour ◽  
Pratibha S. Gaikwad
Keyword(s):  
Structural Changes ◽  
Industrial Structure ◽  
Value Added ◽  
Industrial Sector ◽  
Manufacturing Industries ◽  
Motor Vehicles ◽  
Economic Policies ◽  
Important Indicator ◽  
Industrial Activities ◽  
The Impact

With regard to the importance of the manufacturing, industrial sector for economic growth and its priority for motivating other sectors to development, the paper is aimed to study the structural changes condition in the Indian manufacturing industries. The changing in value-added of industrial activities due to industrial and economic policies is an important indicator for the recognition of manufacturing industries structure. We have analyzed the industrial structure and competitiveness of each industrial activity by using data value-added of manufacturing industries and common indexes such as the structural changes index in the period of 1980-2013. The results of structural index analysis showed that of textile products; leather; basic chemicals and chemical products in the periods of 1980-98  and also in the periods after 2000industries wearing apparel; dressing and dyeing of fur tanning and dressing of leather ; wood and products of wood; motor vehicles, trailers and semi-trailers; recycling; other transport equipment have been the industrial activities that their structural changes indexes has been positive and they have had the highest competitiveness in comparison to other industrial activities and the greatest opportunities to create value-added. 

scholarly journals Economic value added: A financial flexibility tool

2014 ◽  
Vol 12 (1) ◽  
pp. 703-708 ◽  
Author(s):  
Reeta Shah ◽  
Arunima Haldar ◽  
S.V.D. Nageswara Rao
Keyword(s):  
Financial Performance ◽  
Shareholder Value ◽  
Economic Value ◽  
Value Added ◽  
Performance Measure ◽  
Corporate Financial Performance ◽  
Economic Value Added ◽  
Financial Flexibility ◽  
The Right ◽  
The Impact

With increased emphasis on shareholder value addition, there has been an ongoing debate on choosing the right measure of corporate financial performance. There is need for a single measure of financial performance that not only measures corporate financial performance but also works as a financial flexibility tool. The financial performance measure employed by the firm measures the value generated by the firm. This necessitates the firms to choose the right performance tool which can reflect the accurate value added by the firm. We study the role and implications of Economic Value Added as a financial performance measure and further discuss its applicability as a tool for introducing financial flexibility. Flexibility is assessed by measuring the impact of organization’s competitiveness and performance. The findings reveal that EVA as a tool enables the corporate to differentiate between value-creating and value-destructing activities and helps managers in taking right decisions which enhances shareholder value. Thus, finally the research makes a case for managers to use EVA as a tool to provide additional information to investors. Interestingly, EVA can also be adapted as a corporate philosophy for motivating and educating employees

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