Search results

The authors analyze the equilibrium effects of non-tradable assets on optimal policy portfolios. They study how the existence of non-tradable assets impacts optimal asset allocation decisions of investors who own such assets and of investors who do not have access to non-tradable assets.

In this theoretical analysis, the authors analyze a model with tradable and non-tradable asset classes whose cash flows are jointly normally distributed. There are two types of investors, with and without access to non-tradable assets. All investors have constant absolute risk aversion preferences. The authors derive closed form solutions for optimal investor demand and equilibrium asset prices. They calibrated the model using US data for listed equity, bonds and private equity. Further, the authors illustrate the sensitivities of quantities and prices with respect to the main parameters.

The study finds that the existence of non-tradable assets has a large impact on optimal asset allocation. Investors with (without) access to non-tradable assets tilt their portfolios of tradable assets away from (toward) assets to which non-tradable assets exhibit positive betas.

The model provides important insights not only for investors holding non-tradable assets such as private equity but also for investors who do not have access to non-tradable assets. Investors who ignore the effect of non-tradable assets when reverse-engineering risk premia from asset covariances and market capitalizations might severely underestimate the equity risk premium.

The authors provide the first comprehensive analysis of the equilibrium effects of non-tradability of some assets on optimal policy portfolios. Thus, this paper goes beyond analyzing the effects of market imperfections on individual portfolio choices.

This study investigates the private equity funds’ performances and persistence by fund type. Diversification benefit exists between public equity and private equity and among different types of private equity funds. The net IRR of private equity funds depends on fund type, economic growth, stock market performance, inflation and interest rate. Fund performance was negatively correlated with capital inflow to private equity market and fund size. Fund size and series are positively correlated. Performance persistency exists in private equity fund managers. Fund type is very important factor in analyzing private equity fund performance and persistency.

The study introduces a new approach to leverage-value relationship. Besides applying the classical regression models, the study deals with leverage as a continuous treatment variable implemented on the firm’s value using the dose-response function (DFR).

After proper model calibration and splitting the treatment (leverage) into ten doses, a response function is generated, which enables the realization of the dose level at which the firm’s value is maximized. Furthermore, the study tests the pecking order theory (POT) and the trade-off theory (TOT) using the threshold model to see whether firms are under or over-indebted. The analysis is carried out on panel data from small-medium enterprises (SMEs), providing more valuable insights than large and mature companies.

The study used two leverage measures: total liabilities ratio and bank debt ratio. Value is measured by the market capitalization and Tobin’s Q. In general, the study finds a positive relationship between leverage and value; POT is not strongly supported, firms are below their optimal leverage and there is a certain leverage dose that would maximize firms’ value.

Since the threshold model and DRF show that SMEs are under-indebted, firms could benefit from extra leverage doses without affecting the firm’s risk profile, especially in a low-interest rate regime, and the potential increase in public-private expenditure after Italy obtained the European Recovery Funds.

The study contributes to new knowledge and understanding of financial leverage from new methodological perspectives, offering valuable insights from SMEs using novel approaches.

The restructuring of shipping and shipbuilding companies in the midst of rapidly shrinking global shipping demand has become a prominent issue in Korea. In shipping finance, loan syndication featuring many creditors surges as the preferred option. However, increasing the numbers of creditors in the syndicate results in two opposite effects. First is the beneficial effect from their enhanced monitoring power. On the other hand, there is the adverse effect resulting from increased difficulty in coordination when syndicate members increase, particularly in bankruptcy. Our aim of this paper is to analyze the role of finance in the shipping and shipbuilder markets, and determine the theoretical optimal number of creditors for the shipping finance syndicate based on Bolton and Scharfstein (1996). The two issues above result from moral hazard and non-verifiability: coordination among many creditors for collection of bonds in case of default, and the enhancement of monitoring private benefit exploitation by the ship-owner during default. Considering the two conflicting forces result from an increase in creditor membership, we draw conclusions on determining the optimal number of creditors by considering trade-offs between these two factors: More creditors are preferred when the monitoring effect dominates. Otherwise, less creditors are preferred.

The purpose of this paper is to develop initial evidence about the nature and features of crowdfunding in China, given it is largely unregulated regulatory frameworks.

The paper used extensive desk research using data collected from the public and private sectors, after which the data was analyzed parallel to existing academic literature, that is, institutional context by Bruton et al. (2014). This paper uncovered patterns of development, profiling crowdfunding platforms, examining the regulatory landscape and providing antecedents of successful crowdfunding projects in China.

When the traditional financial markets are hard to reach, micro, small and medium enterprises (MSMEs) were starved for capital. Crowdfunding can play a major role in funding and risk sharing. It is an innovative and dynamic vehicle for MSMEs as well as enthusiastic investors in China. Since its initial introduction to China in 2009, crowdfunding has gained substantial popularity in a relatively short period. Currently, there is still not an identifiable guideline on how to delineate the significance of the crowdfunding platform. The development of crowdfunding in China faces a few unresolved key issues. As researchers exploring this phenomenon in new ways, crowdfunding platforms can be enhanced in a manner that benefits the capital seeker, investors and society as a whole.

There is a dearth of information on start-up crowdfunding in Asia. With little data available to analyze, so this paper hopes to contribute to knowledge and provide valuable information to researchers and industry representations. Crowdfunding represents a potentially disruptive change in the way that new ventures are funded. This paper represents an initial analysis in the study of new ventures in China. Finally, the authors provide recommendations for entrepreneurs, investors and policymakers as well as researchers and practitioners with suggestions about yet unexplored avenues of research.

Economic progress requires both creating new industries – defined as economic development – and developing existing ones – called economic growth. This policy brief sets out an economic development framework to integrate entrepreneur, university, private risk capital and state actions to enable suitable firms to grow into global successes as they transform technologies and markets.

The purpose of this study is to understand venture capital family businesses (VCFBs) governance of portfolio companies through the deal process.

This study applies a theory-developing approach. A model of VCFB governance is developed whose key aspects are illuminated by four examples (cases) of VCFBs.

Recent research suggests that a venture capital firm's corporate deal processes can be divided into the pre-deal, deal and post-deal phases. Based on the age, size and succession dimensions, propositions for how a governance trajectory develops for VCFBs, affecting the deal process of target family firms (TFFs), are presented. These propositions highlight how the family owners' actions and behavior are related to VCFB governance, which in turn, influences the three phases involved in making an investment.

The propositions suggest how personal and administrative VCFBs' governance of the deal process of portfolio companies is significantly affected by centrifugal and centripetal forces that drive the respective types of governance where third-generation family owners appear as changers of governance approach.

Islamic crowdfunding, an alternative way to finance social projects, is a new development in Malaysia. Little is known about its operation. This study aims to explore the practice of Nusa Kapital, the first Islamic crowdfunding platform in Malaysia.

This study adopted a descriptive approach. The data was collected through document analysis and interviews with two officials of Nusa Kapital. The data gathered was analyzed through the thematic analysis technique.

This research discovered that Nusa Kapital was established considering the financing needs of the growing number of small medium enterprises (SMEs) in Malaysia. It uses the murabahah concept to make financing arrangements for entrepreneurs. Murabahah is a debt-based concept where the investors, instead of giving cash to the entrepreneurs, purchase an asset and sell it to them at a cost-plus profit. The Securities Commission Malaysia (SCM) regulates the crowdfunding operation of Nusa Kapital, which sets guidelines for the different types of investors, entrepreneurs and platforms. Nusa Kapital conducts an extensive background check of the company for its creditworthiness and takes the necessary measures for the transparency of the project's operation.

This study has unique implications for the regulatory authorities and practitioners in Malaysia and global industries. The study explored the practical scenario of the crowdfunding institution, which will be beneficial for similar industries within and outside of the country.

While previous literature provides a theoretical discussion of Islamic crowdfunding, this study contributes to the body of knowledge by demonstrating its practice.

The transaction process of an office building is known to be time consuming and inefficient, in part due to the lack of market transparency. The purpose of this paper is to focus on the development of a blockchain application that can improve the transaction process of office buildings in the Netherlands.

Conducting design science research, the current transaction process of an office building and status quo of blockchain technology in real estate is investigated. Subsequently, multiple parties are interviewed to define major pain points within the process. The interview findings are used to design a blockchain solution which overcomes the aforementioned pain points. After designing, the interviewees are asked again to pragmatically validate the proposed model.

One of the major pain points identified concerning the transaction process of an office building is that it is difficult to define the characteristics of a property, due to lack of data structure and quality. The proposed application improves the way specific assets are understood by structuring physical and contractual information in one place and guarantees the quality of the data by using the blockchain mechanisms.

A blockchain application is proposed, which can improve the transaction process of an office building.

Recent studies indicate that blockchain technology could lead to improvements in efficiency, transparency and therefore trust within the transaction process. Therefore, the proposed application is of value for the future of real estate data management and the transaction process.

Both investors and the stock markets are believed to behave in a perfectly rational manner, where investors focus on utility maximization and are not subjected to cognitive biases or any information processing errors. However, it has been discovered that the sentiment of the social mood has a significant impact on the stock market. This study aims to analyze how did the protest event of Tesla happened in April 2021 have a significant effect on the company's stock performance as well as its competitors, Nio, under the competitive effect.

The research is based on time series data collected from Tesla and Nio by employing 10 days, 15 days and 20 days anticipation and adjustment period for the event study. This study employed a text sentiment analysis to identify the polarity of the sentiment of the protest event using the Microsoft Azure machine learning tool which utilizes MPQA subjective lexicon.

The findings provide further evidence to show that a company-specific negative event has deteriorating effects on its stock performance, while having an opposite effect on its competitors.

The paper argues that negative sentiments through social media word of mouth (SWOM) affect the stock market not just in the short run but potentially in the longer run. Such negative sentiments might create a snowball effect which causes the market to further scrutinize a company's operations and possibly lose confidence in the company.

This study explores how the Tesla's protest event at Shanghai Auto Show 2021 has a significant impact on Tesla's stock performance and prolonged negative impact although Tesla implemented immediate remedial actions. The remedial actions were not accepted positively and induced a wave of negative news which had a more persistent effect.