IN SEARCH OF THE CORPORATE GOVERNANCE RISK PREMIUM EMBEDDED INTO THE COST OF CAPITAL

The paper proposes to intend the firm as a “nexus of stakeholders”, each bearing return-to-risk expectations about the sharing of the corporate performance. All the stakeholders must achieve their own satisfaction through the bargaining of contracts that must be sustainable, i.e. keep both the firm and its stakeholders-network alive in the long term. Governance is intended as the mechanism that gives solution to the above puzzle. When both market and contracts are complete, optimal solution can be easily found. But when incompleteness emerges, governance solutions can misallocate the firm performance among the stakeholders. This is the case when an incomplete Governance emerges. In fact, in incomplete contests, the stakeholders will negotiate the visible-only arguments of their contracts, this way binding also the invisible ones, i.e. those impacting anyway on their ex-post performance. This being the case, a Governance Risk Premium (GRP) emerges in the medium-long run, impacting on the return-to-risk performance for equity investors, thus incentivizing a governance repackage. Such a GRP depends both on the actual grade of market completeness and the one of contracts as per the risk allocation made through time.. The proposed methodology to detect GRP is then applied into the Italian case to test its strength. Results show that GRP inflate 39bp the cost of equity capital with the following break-down: 123bp as basic-GRP from operations which is increased +98bp for the GRP-informative component and reduced -191bp by GRP-managerial component; a GRP-behavioural component +90bp would lead GRP from operations up-to 120bp, while sharing 81bp with debt capital leads the final figure down to 39bp (i.e. 123+98-191+90-81)

The effect of the enterprise risk management implementation on the firm value of European companies

We aim to investigate the impact of the Enterprise Risk Management (ERM) on the enterprise value and to discover the determinants of this adoption. Several economic actors have decided to face the current economic and financial complexity shifting from a Traditional silo-based Risk Management approach (TRM) to a more comprehensive one: the ERM. Some academics have investigated this topic, focusing mainly on the financial industry, but results are still controversial. In this study we try to understand if the ERM implementation affects firm value on a sample of 200 European companies, both financial and non-financial; second, we test which are the determinants of the ERM adoption. We do this through a FE panel regression analysis and a FE logistic analysis. We find a positive statistically significant relation between the ERM adoption and firm value. As for the probability that a firm engages in an ERM protocol, size, beta and profitability are the statistically significant determinants

Scritti in onore di Giuseppe Tardivo

Gli ultimi vent’anni sono stati portatori di tali e tante trasformazioni a livello tecnologico, sociale ed economico da rendere il modello di riferimento della teoria dell’impresa non più pienamente capace di rappresentare la realtà. In questo scritto ci si chiede, con particolare riferimento al valore d’impresa, se il nuovo contesto sia realmente più complesso di quello passato e quindi richieda un nuovo paradigma oppure se abbia semplicemente dimostrato che le semplificazioni presenti nel modello dominante siano eccessivamente semplicistiche e necessitino di opportuni adeguamenti

Changes in SMEs financing:Risks and opportunities for agro-food companies

The financial and real crisis started in 2007-2008 has deeply transformed the way the Italian financial and capital market act. Italian SMEs need to be aware of the transformation not to be pushed out of the market itself and to take profit of the new relevant opportunities coming out thanks to the emerging new products and new intermediaries.The paper focuses the disappear of banks relationship lending and provides evidence about how to approach the market in the emerging “competing for capital” prevailing rule.It also stresses the relevance of ESG topics as emerging risk factor companies must look at when asking for new finance because of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability related disclosures in the financial services (SFDR)

CSR in the bond market: Pricing stakeholders and the moderating role of the institutional context

This study examines the impact of corporate social performance (CSP) on the spreads and credit ratings of corporate bonds on a global scale. The relationship is examined within the national legal and institutional environment and with regard to specific stakeholder practices. We construct and use a unique longitudinal, international dataset with a total of 5,280 bond issues dating from 2003 to 2018 and spanning 40 countries worldwide. We provide evidence that more responsible firms benefit from lower bond spreads and improved bond ratings, while a higher degree of CSR-related controversies penalizes firms on both dimensions. Various, but not all, stakeholder relationships appear to generate a significant impact on spreads and bond ratings, with shareholders remaining crucial in both civil and common law countries, opposite to literature findings so far. Corporate governance is corroborated as a primary concern also in the debt market for common law economies, while societal stakeholders assume significance for civil law systems. Finally, findings highlight that stronger regulation and government involvement do not further promote the role of CSP in the debt market. On the other hand, free public criticism and media scrutiny generate a more pronounced effect of CSP on bond pricing providing support for the rewards associated with voluntary and proactive CSR

Firm Performance, Guarantees and SMEs Credit Access

The first purpose of this paper is to highlight how subjective firm performance and guarantees mitigate the credit access difficulty in small and medium-sized enterprises (SMEs). Secondly, in the light of the previous studies, we check the effect of Entrepreneurial orientation (EO) on credit access difficulty. The data is collected through a survey in Italy and Austria, directed to 328 SMEs. The findings show that higher levels of performance are asso- ciated to less difficulty in accessing credit, particularly when the banks financing the firm are relationship lending oriented. While collateral, bank guarantees and public guarantees seem to have no effect on difficulties in accessing credit, mutual guarantees have a clear risk-sharing effect, particularly in relationships where banks implement transaction lending technologies. No EO dimension impacts on difficulties in accessing credit. Unlike larger companies, SMEs soft information such as EO do not seem to di- rectly influence the loan policies of financial intermediaries, thus leaving an indirect effect through guarantee

Analisi e valutazione finanziaria d'impresa

L’evoluzione del contesto economico e finanziario richiede un continuo accrescimento delle competenze di coloro che a vario titolo si occupano delle questioni finanziarie, in particolare per le imprese di minori dimensioni. Il presente contributo ha il fine di illustrare i principali strumenti per l’analisi e la valutazione finanziaria d’impresa, indirizzandosi principalmente a imprenditori, direttori finanziari e consulenti di piccole e medie imprese. Prediligendo un taglio applicativo, intende al contempo fornire al lettore un approfondimento concettuale rigoroso ma non prolisso. Più nello specifico, il presente testo si distingue dagli altri contributi simili per i seguenti aspetti: – integra le analisi a valore con quelle riconducibili agli indici e flussi con un taglio semplice e intuitivo; – riporta un modello per la stima dei costi del dissesto, particolarmente adatto per la valutazione delle imprese in crisi; – elabora un nuovo metodo derivato dai più noti modelli discounted cash flow ed EVA, particolarmente adatto per la valorizzazione delle piccole e medie imprese; – elabora una metodologia di valutazione tramite multipli di borsa che considera le specificità reddituali e finanziarie dell’impresa da valutare