Corporate Risk Tolerance and Acceptability towards Sustainable Energy Transition

The omnipresence of risk prevails in almost every aspect of human life. Individuals and societal factors are pivotal in the decision-making process to judge acceptability and tolerability of risk. Tolerability of risk (ToR) is characterized by dynamism pinned in the process of decision making that helps to gauge the society and individual’s risk. The energy transition implies switching the energy system from fossil fuels or any traditional mechanism to modern renewable sources that are sustainable. The energy transition is paramount important in the current global energy system to attain sustainable goals for organizations. This study used the positivism research paradigm to address the research questions. The quantitative approach helps to examine the cause-and-effect relationship. It also helps to collect systematic information to meet the objectives of the research. A total sample of 300 was selected for the data collection from renewable energy companies. The study used positivism research philosophy applied deductive approach. The data is analyzed through PLS-SEM. It is summarized that the scale of risk acceptability and tolerability in Pakistan is moderate which encourages companies to work progressively and increases sociocultural activities to make society a partner of this new shift in energy transition that will ultimately increase the level of risk acceptability. Nevertheless, as a society, people are neither high-risk takers nor risk avoiders due to income constraints, macroeconomic uncertainty, and political instability.

Banking industry stability and investment dynamics

Purpose This paper aims to evaluate how strands of differing investments influence stability in the banking industry using data from 37 countries in Sub-Sahara Africa from 2000 to 2018. Design/methodology/approach Empirical analyses in the study were carried out using a two-step system Generalized Method of Moments estimation methodology. Findings Empirical results suggest that generally, growth in investments by governments, foreign investments and private domestic investments have a significant positive impact in stabilizing the banking industry. The empirical estimates further suggest that macroeconomic conditions such as macroeconomic uncertainty adversely affects the liquid reserve position of banks even during periods of appreciable growth in investments. Originality/value The authors present a different approach to the banking industry discourse. Instead of surmise the relationship with the direction of impact often emanating from the banking industry to other variables of interest or conditions, this study rather examines how investment dynamics among economies influence the stability of the banking industry overtime. In contrast to related studies, this study examines how strands of investment variables influence the stability of the banking industry. Specifically, this study is modeled to examine the extent to which variability in investment growth (using different investment variables) affect stability in the banking industry.

Managerial Response to Macroeconomic Uncertainty: Implications for Firm Profitability

This paper examines how agents’ response to macroeconomic uncertainty affects firms’ revenues, expenses, and profitability in a global sample of firms spanning 1997 to 2018. Consistent with consumers reducing purchases and managers cutting costs, I find that increases in macroeconomic uncertainty lead to both lower revenues and lower expenses. The net short-term effect on profitability is positive as the reduction in expenses exceeds the fall in revenues. This favorable profitability effect is attenuated for firms whose institutional environment restrains cost-cutting, holds for both the cash and accrual components of earnings, and is robust to instrumental variable estimation employing exogenous variation in macroeconomic uncertainty arising from natural disasters, political unrest, revolutions, and terrorist attacks.

Ecological Culture of Modern Russian Society: on the Threshold of the Gnoseological Paradigm

Introduction. The strategy of sustainable socio-economic development of the Russian Federation in the conditions of steadily growing political and macroeconomic turbulence poses the problem of the formation of a new modern type of ecological culture, adequate to the consequences of the global ecological crisis. The purpose of the article is to substantiate the need for a worldview rethinking of the essence, content and role of ecological culture in the development of modern Russian society. Materials and Methods. The study used axiological, dialectical, structural-functional, program-targeted and hermeneutic methods of analysis and assessment of the phenomenon of ecological culture, as well as interdisciplinary and problem approaches in the reconstruction of the processes of its development and improvement. Results. The article analyzes the problem of the formation of modern ecological culture in the conditions of macroeconomic uncertainty and instability, taking into account the specific tasks facing the state environmental policy. The concepts of “ecological culture” and “creative economy”, “ecological production” and “ecological management” are correlated. The main elements of ecological culture and theoretical and methodological approaches to its study in Russian and world science, as well as the main trends in its development, are revealed. The authors formulated the idea of the need for a moral and ethical rethinking of the phenomenon of ecological culture within the framework of economic science and overcoming its narrowly technocratic interpretation. Methods are shown and estimates of the nature and dynamics of development of ecological culture in modern conditions are given. Discussion and Conclusion. Based on the use of the conceptual provisions of social philosophy, philosophy of culture, philosophy of science and political economy (the ideas of autopoiesis by N. Luhmann, scientific paradigms of N. Wiener and T. Kuhn, economic ethics of A. Smith, a new model of rapidly reacting production by R. Suri, noonomy of S. Bodrunov and others) formulated specific recommendations for the formation of a new type of ecological culture, corresponding to a new social reality. The content of the modern paradigm in the development of ecological culture as a process of moving away from the cult of consumption to the principle of expanded reproduction of the environment is revealed.

Uncertainty and Business Cycles: Exogenous Impulse or Endogenous Response?

Uncertainty about the future rises in recessions. But is uncertainty a source of business cycles or an endogenous response to them, and does the type of uncertainty matter? We propose a novel SVAR identification strategy to address these questions via inequality constraints on the structural shocks. We find that sharply higher macroeconomic uncertainty in recessions is often an endogenous response to output shocks, while uncertainty about financial markets is a likely source of output fluctuations. (JEL D81, E23, E32, E44, G14)

Structural attributes of firms, irreversibility, and uncertainty of corporate investment in Nigeria

In the Nigerian context, there is a gap in the literature on the structural attributes of firms and the extent to which corporate investments are irreversible. Thus, this study was to empirically examine the structural attributes of firms, irreversibility, and uncertainty of corporate investment using the real options theory of investment. The study is based on annual data series of firms listed on the Nigerian Stock Exchange from 2005 to 2019. The study measured structural attributes using competitiveness and monopoly/oligopoly of a firm, macroeconomic uncertainty, inflation, interest, and exchange rates, and examines their association with corporate investments. The study was conducted using a panel dataset adopting a fixed-effect estimation technique that takes into account potential endogeneity and firm specific-effects. The result showed that the macroeconomic uncertainty measure of exchange rate volatility is strongly detrimental to corporate investment decisions. Furthermore, interest rate and inflation volatilities are not detrimental to investment growth, while exchange rate uncertainty has a substantial negative influence on corporate investment. Besides, macroeconomic uncertainty was found to be a greater disincentive for firms with irreversible investments than for firms with more easily reversible investment projects.

Time-Varying Uncertainty of the Federal Reserve's Output Gap Estimate

A factor stochastic volatility model estimates the common component to output gap estimates produced by the staff of the Federal Reserve, its time-varying volatility, and time-varying, horizon-specific forecast uncertainty. The output gap estimates are uncertain even well after the fact. Nevertheless, the common component is clearly procyclical, and positive innovations to the common component produce movements in macroeconomic variables consistent with an increase in aggregate demand. Heightened macroeconomic uncertainty, as measured by the common component's volatility, leads to persistently negative economic responses.