Wealth Effects of International Investments and Agency Problems for Korean Multinational Firms

This paper recognizes the recent surge in cross‐border investments by MNCs from newly industrialized countries and investigates the wealth effects of FDI announcements by Korean firms, which are the leading FDI providers in Asia. The empirical results indicate that for Korean MNCs: 1) cross‐border investments increase shareholder wealth; and 2) they do not obtain the firm‐specific technological advantages over international competitors. The paper also presents evidence that cross‐border investments do not increase shareholder wealth for the 30 largest chaebol‐affiliates, and that shareholder wealth losses are greater when corporate ownership is concentrated, as suggested by Shleifer and Vishny (1997) and La Porta et al. (1998, 2000) .     

The optimal portfolio for the two-pillar mandatory pension system: the case of Poland

In the recent decade, there has been observed across the Central and Eastern European states the regulatory trend towards the increase of the non-financial (first) pension pillar size at the expense of the financial (second) pillar. It tends to question the consequences of this shift for the future retirement benefits. Applying the portfolio approach we address this issue by running a series of simulations to find out how to allocate pension contributions between both pillars in an optimal way. Our study contributes to the existing literature as follows. First, we do not perform the assessment of the predetermined regulatory solutions, but we look for an optimal one. Moreover, we allow our optimal rule to be time-varying, if necessary, which would be a true novelty in this research area. Second, we do not base our estimates on historical trends; rather, we apply the long-term economy’s projection to account for the society’s ageing impact, which is a crucially important factor for the solvency of the pension system. Adapting some of the simulation assumptions to fit the Polish case, our results confirm that current regulations underestimate the role of the capital pillar and the optimal allocation between both pillars should be time-varying.     

INVESTMENT PERFORMANCE OF COMMON STOCKS IN RELATION TO INSIDER OWNERSHIP

In this paper, the authors empirically examine whether corporations with high degrees of insider ownership enjoy superior returns compared with firms with more diffuse ownership. In addition, the authors evaluate the effects of insider ownership on security returns in relations to the well-known effects of size and earnings yield (or price-earnings) ratios. Results indicate that, in addition to Basu's price-earnings effect, insider ownership is a new statistically significant variable that is associated with abnormal returns. This return anomaly might occur because the market pays an inadequate price for top managements' equity ownership, a firm-specific fundamental variable that has a theoretical foundation in agency theory.     

The Wealth Effects of Capital Investment Decisions: An Empirical Comparison of Korean Chaebol and Non‐Chaebol Firms

Abstract:   This paper investigates the capital investment decisions of Korean firms and their impact on shareholder wealth. Overall, we find positive abnormal returns surrounding the announcements of 697 cases of investment projects during the period 1992–1999. This paper also finds that the investment decisions of business group ( chaebol ‐affiliated) firms do not increase shareholder wealth, while the capital investment decisions of non‐ chaebol firms generate significantly positive abnormal returns. The multivariate tests provide consistent evidence that the announcement effects for chaebol firms are lower than for non‐ chaebol firms, after growth opportunities, investment size and firm size are controlled for. The findings support the view that the organizational structure of Korean chaebols creates an incentive for managers to make non‐value maximizing capital investment decisions.     

The impact of selected factors on new business formation in the private healthcare sector

Numerous factors influence the development of the private healthcare sector. Therefore, the selection of these factors, which represent a potential opportunity for forming new entities, is a crucial from the point of view of entrepreneurship. In our research we selected strategic variables which have got direct influence on entrepreneurship in the private healthcare sector in Poland. Theoretical approach was based on literature review which have revealed the main factors and their relationships with entrepreneurship according to the previous research studies. This research study was conducted for the entire population of municipalities in Poland. Methodology was based on Intelligent Data Analysis (IDA) which can be applied for a large amounts of data in order to extract useful knowledge from it. Moreover, in research study were applied explanation techniques – decision rules –in order to indicate, to what extent the environment have influence on strategic choices conditioning the success of businesses. The results have revealed that it is possible to determine a set of the most important factors influencing entrepreneurship in the private healthcare sector in Poland. On the other hand, were indicated these variables which do not participate in process of influencing on entrepreneurship in private healthcare sector in Poland.

     

AN EMPIRICAL EXAMINATION OF SUPPLY CHAIN PERFORMANCE ALONG SEVERAL DIMENSIONS OF RISK

This research operationalizes several supply chain risk sources and investigates their relationships with supply chain performance. The responses of 760 executives from firms operating in Germany reveal that demand side and supply side risks do have a negative impact on performance whereas regulatory, legal and bureaucratic risks, infrastructure risks, as well as catastrophic risks do not. The analysis and results augment previous research regarding the impact of supply chain risks on the operational performance of firms and shareholder value and provide a detailed analysis of supply chain risk sources as contextual variables in strategic decision‐making.     

Multinational Enterprises,Absorptive Capacity and Export Spillovers: Evidence from Polish Firm‐level Data

An important benefit attributed to the activity of multinational enterprises (MNEs) in developing and transition countries is its effect on international market access. Through a variety of channels the presence of MNEs is expected to reduce the costs faced by indigenous firms in breaking into international markets and in turn boost their export prospects. In this paper we use an extensive Polish firm‐level dataset for the period 2000–2008 to verify whether MNEs have positively contributed to the export performance of indigenous firms. We track not only sectoral and geographical spillovers stemming from the activity of MNEs but also control for firm‐specific characteristics that affect indigenous firms' decisions to export including their absorptive capacity. Our empirical results support the existence of positive spillovers (related to MNE export activity) at the sectoral level but not at the regional level. Finally, we find that individual absorptive capacity determines the size of export spillovers.