The Inverted-U Relationship between R&D and Profitability: Evidence from the Slovak Medical Device Industry

CC BY-NC-ND 4.0In the knowledge economy, the activities of knowledge-intensive enterprises largely depend on the effectiveness of intellectual capital management and the processes of its creation – research and development (R&D). The present paper analyzes the relationship between the R&D and profitability of the Slovak medical device companies, which belong to high-value-added, knowledge-intensive industries. A sample of 26 companies operating in the Slovak medical device industry for the period of 2015 to 2019 is considered. For data analysis purposes, GRETL software is used. The current study deploys the panel data regression analysis methodology. A regression model is constructed that includes one dependent variable and four independent variables. Using the Breusch-Pagan test and the Hausman test, the feasibility of using the Fixed Effects Method as an estimated parameter for the regression model is substantiated. Diagnosis of the adequacy of this model is performed on the basis of the Normality test, Autocorrelation test, and Heteroscedasticity test, and the feasibility of model estimation is substantiated with robust standard errors. The modeling results show that there is a curvilinear (inverted-U) relationship between R&D and the profitability of Slovak medical device companies, which confirms the hypothesis of the study. RDI has a significant negative impact on ROA at a 1% level, and RDI2 has a significant positive impact on ROA at a 1% level. The current results suggest that more investment in R&D is better for profitability, but only within the zone of optimal R&D activities. Medical device companies that carry out minor R&D activities are encouraged to improve their R&D investment policy to improve their quality and effectiveness

The relationship between corporate governance mechanisms and financial performance: the case of listed industrial companies in Oman

The purpose of the study is to examine the impact of corporate governance mechanisms on the financial performance of listed industrial companies in Oman. As the main research method, panel data regression analysis was used to analyze data from 36 Omani industrial companies, listed on the Muscat Stock Exchange for the period 2017-2021. Three regression models were developed using three dependent variables (Return on Assets, Return on Equity, Return on Sales), seven independent variables (Board Size, Independent and Non-executive Board Members, Board Meeting, Chief Executive Officer, Dummy variable for Board Change, Dummy variable for the Secretary on the Board, Dummy variable for Internal Auditor), and two control variables (Leverage, Size of the company). According to the research results, a negative influence of the Board Size and Dummy variable for the presence of the Secretary on the Board on the Return on Assets indicator at 10% and 5% significance level was found; moreover, there is a positive influence of Leverage and Size of the company at the 1% and 5% significance level on Return of Assets. Although, none of the independent variables used has a significant impact on the Return on Equity indicator. Return on Sales is significantly affected only by two control variables, i.e., a negative impact of Leverage at the 10% significance level and a positive impact of the Size of the company at the 10% significance level. The results obtained in the study indicate the imperfection of the corporate governance mechanisms implemented by Omani industrial companies in the field of ensuring financial efficienc

Determinants of agricultural companies’ financial performance: The experience of Poland, Slovakia and Ukraine

The purpose of the study is to conduct a comparative analysis of the determinants affecting the financial performance of agricultural enterprises in Poland, Slovakia and Ukraine. As the main research method, panel data regression analysis was used to analyze data from 34 Polish, 123 Slovak, and 305 Ukrainian agricultural companies for the period 2017–2020. To analyze the links between financial performance measures and its determinants, nine models were developed based on three selected dependent variables (Return on Assets, Return on Equity, Return on Sales) in each of the countries studied. Seven independent variables were used, such as Leverage, Long-Term Debt to Assets, Short-Term Debt to Assets, Debt to Equity, Current Ratio, Asset Tangibility, Capital Intensity, and two control variables such as Size and Dummy variable for legal form. The most significant impact on the financial performance of agricultural enterprises has: for Polish enterprises – Return on Assets – Leverage and Asset Tangibility, Return on Equity – Debt to Equity and Dummy variable for legal form, Return on Sales – Current Ratio, Capital Intensity, and Size; for Slovak enterprises – Return on Assets – Current Ratio, Return on Equity – Debt to Equity, Return on Sales – Current Ratio, and Capital Intensity; for Ukrainian enterprises – Return on Assets – Leverage and Size, Return on Equity – Debt to Equity, and Current Ratio, Return on Sales – Capital Intensity

INFORMATION SUPPORT ISSUES OF RISK MANAGEMENT OF SOCIALLY RESPONSIBLE CORPORATIONS

Актуальність теми дослідження. У сучасних умовах господарювання невизначеність та ризики переповнюють діяльність будь-якої компанії. Соціально відповідальному бізнесу притаманна значна кількість ризиків, що зумовлює необхідність посиленого моніторингу та управління ними, ефективність системи ризик-менеджменту та вимагає пошуку нових напрямів його розвитку. Постановка проблеми. Задоволення інформаційних інтересів стейкхолдерів зумовлює необхідність дослідження питання сучасного стану системи ризикменеджменту великих компаній, їх стандартизації, розкриття інформації про ризики у звітності соціально відповідального бізнесу. Аналіз останніх досліджень і публікацій. Дослідженням проблемних питань щодо управління ризиками діяльності суб’єктів господарювання у своїх працях займалися такі вчені як: А. П. Альгін, П. Й. Атамас, І. Т. Балабанов, І. А. Бланк, В. В. Вітлінський, Л. В. Гнилицька, Б. А. Засадний, А. Б. Камінський, Т. М. Королюк, Г. В. Савицька, А. Є. Шевелев, О. В. Шевелева, А. Д. Шеремет, О. І. Ястремський. Виділення недосліджених частин загальної проблеми. Комплексного дослідження вимагає питання стандартизації ризик-менеджменту та створення інформаційного ресурсу про управління ризиками соціально відповідального бізнесу для стейкхолдерів. Постановка завдання. Аналіз річних звітів соціально відповідальних компаній (на прикладі підприємств агропромислового комплексу) дозволить ідентифікувати ризики, які притаманні їх діяльності, методики управління ними та встановити ступінь розкриття питання кількісного вимірювання негативних наслідків ризиків та можливостей. Виклад основного матеріалу. У цій статті проаналізовано стан та тенденції розвитку ризикменеджменту соціально відповідального бізнесу, встановлено недостатній рівень представлення інформації про ризики у звітності компаній АПК та низький ступінь доведення інформації до стейкхолдерів про кількісну оцінку наслідків ризиків та можливості. Висновки. Надано пропозиції щодо підвищення ефективності системи ризик-менеджменту соціально відповідальних компаній через міжнародну сертифікацію управління ризиками. Виявлено напрями розвитку системи ризик-менеджменту в частині кількісного вимірювання наслідків ризиків та можливостей з метою задоволення інформаційних потреб стейкхолдерів.Urgency of the research. In today's economic environment uncertainty and risk overwhelm any business. A large number of risks are inherent in socially responsible business, which necessitates the need for enhanced monitoring and management, the effectiveness of the risk management system and requires finding new directions for its development. Target setting. Satisfaction of stakeholders' information interests necessitates research of the current state of the risk management system of large companies, their standardization, disclosure of risks in the reporting of socially responsible business. Actual scientific researches and issues analysis. The research of problematic issues regarding risk management of the activity of economic entities was carried out by such scientists as A. P. Algin, P. Y. Atamas, I. T. Balabanov, I. A. Blank, V. V. Vitlinskyy, L. V. Hnylytska, B. A. Zasadnyi, A. B. Kaminsky, T. M. Korolyuk, G. V. Savitska, A. E. Shevelev, O. V. Sheveleva, A. D. Sheremet, O. I. Yastremskii. Uninvestigated parts of general matters defining. Comprehensive research requires the standardization of risk management as well as the creation of an information resource on risk management of socially responsible business for stakeholders. The research objective. Analysis of the annual reports of socially responsible companies (on the example of enterprises of agro-industrial complex) will enable to identify the risks inherent in their activities, methods of managing them as well as to establish the extent to which the issue of quantifying the negative effects of risks and opportunities can be identified. The statement of basic materials. This article analyzes the state and trends of risk management development of socially responsible business, establishes an insufficient level of presenting information on risk in the reporting of agribusiness companies and low degree of communicating information to stakeholders on quantifying the impact of risks and opportunities. Conclusions. Suggestions to increase the effectiveness of the risk management system of socially responsible companies through international risk management certification are made. The directions of development of the risk management system in terms of quantitative measurement of the consequences of risks and opportunities with the purpose of meeting the information needs of stakeholders have been identified

Financial performance determinants of Ukrainian agricultural companies in the pre-war period

Purpose. The purpose of the article is to identify the determinants of the financial performance of agricultural companies in Ukraine in the pre-war period. Methodology / approach. Panel data regression analysis, carried out using the GRETL software, was used as a research method. The financial statements of thirty Ukrainian agricultural companies over the defined period 2015–2021 were selected to be data for analysis. Three models were constructed in the article based on the use of three different dependent variables (Return on Assets, Return on Equity, Return on Sales) and seven independent variables (Current Ratio, Capital Intensity, Export Intensity, Leverage, Size, Dummy variable for agricultural sub-sectors, Dummy variable for location). The selection of the mentioned independent variables was logically substantiated by the structure of the financial reports of the Ukrainian agricultural companies and analytical system “You Control”. Results. The study of the determinants of financial performance of the agricultural companies is a widespread area of research among academicians, however, is characterized by quite controversial results. Some of these conclusions were refuted, but certain results were confirmed on the example of Ukrainian enterprises. The results of the panel regression analysis with respect to Models 1-3, partially are in contradiction with the conclusions of other studies regarding the impact of the determinants on the financial performance of agricultural companies. None of the chosen independent variables has a significant effect on all the dependent variables as investigated in the article, namely ROA, ROE, and ROS. This confirms the formulated in the study hypothesis regarding the availability of a unique set of financial performance determinants for agricultural enterprises for each individual country. The independent variables used in the study have the most significant impact on ROA. Primarily, ROA is significantly affected by CAPI (5 % level), EXPI (10 % level), and DVL (5 % level). The results obtained confirm a need for improving regional support and ensuring an access to capital for agricultural enterprises in Ukraine. Originality / scientific novelty. The originality of the conducted research lies in the study of a set of factors that influenced the financial condition of Ukrainian agrarian companies in the pre-war period, considering the peculiarities of the Ukrainian agrarian sector of the economy. Practical value / implications. Investors and financial institutions can benefit from the research results. By recognizing which factors have the most significant impact on financial performance, they can make more informed decisions when considering investments in Ukrainian agricultural companies. Understanding which factors influence financial performance can help in risk management for both agricultural companies and financial institutions

The impact of intellectual capital on company financial performance: Evidence from the Omani industrial sector

The article aims to investigate, using the VAIC and MVAIC models, the impact of intellectual capital on the financial performance of Omani companies listed on the Muscat Stock Exchange from 2017 to 2021. Regression analysis revealed a significant positive influence of VAIC and MVAIC only on the Asset Turnover Ratio at a 10% significance level. This suggests that an increase in VAIC or MVAIC by one unit could lead to a respective increase in earnings for Omani listed industrial companies by 0.0017 and 0.0016. However, the overall impact of VAIC and MVAIC on financial performance appears limited, necessitating measures for enhanced efficacy. Moreover, company size and leverage were found to significantly influence EBITDA and Return on Assets, suggesting the positive effect of increased activity and resource utilization. Conversely, Return on Customer Equity negatively affected only Asset Turnover Ratio, implying that investments in marketing and advertising may not significantly enhance financial performance. Human Capital Efficiency showed no significant impact on financial performance measures, highlighting the necessity for Omani industrial enterprises to focus on enhancing employee skills and experience for improved value-creation processes. These findings underscore the intricate relationship between intellectual, physical, and financial capital in shaping financial performance, necessitating targeted strategies for enhancement. Further analysis of suggested models indicated the significance of company size on EBITDA, highlighting the importance of scaling activities for performance improvement. VAIC and MVAIC structural elements showed mixed results, while Capital Employed Efficiency negatively affected Return on Equity, Structural Capital Efficiency positively impacted EBITDA and Asset Turnover Ratio

Financial Performance Determinants of Ukrainian Agricultural Companies in the Pre-War Period

Purpose. The purpose of the article is to identify the determinants of the financial performance of agricultural companies in Ukraine in the pre-war period. Methodology / approach. Panel data regression analysis, carried out using the GRETL software, was used as a research method. The financial statements of thirty Ukrainian agricultural companies over the defined period 2015–2021 were selected to be data for analysis. Three models were constructed in the article based on the use of three different dependent variables (Return on Assets, Return on Equity, Return on Sales) and seven independent variables (Current Ratio, Capital Intensity, Export Intensity, Leverage, Size, Dummy variable for agricultural sub-sectors, Dummy variable for location). The selection of the mentioned independent variables was logically substantiated by the structure of the financial reports of the Ukrainian agricultural companies and analytical system “You Control”. Results. The study of the determinants of financial performance of the agricultural companies is a widespread area of research among academicians, however, is characterized by quite controversial results. Some of these conclusions were refuted, but certain results were confirmed on the example of Ukrainian enterprises. The results of the panel regression analysis with respect to Models 1-3, partially are in contradiction with the conclusions of other studies regarding the impact of the determinants on the financial performance of agricultural companies. None of the chosen independent variables has a significant effect on all the dependent variables as investigated in the article, namely ROA, ROE, and ROS. This confirms the formulated in the study hypothesis regarding the availability of a unique set of financial performance determinants for agricultural enterprises for each individual country. The independent variables used in the study have the most significant impact on ROA. Primarily, ROA is significantly affected by CAPI (5 % level), EXPI (10 % level), and DVL (5 % level). The results obtained confirm a need for improving regional support and ensuring an access to capital for agricultural enterprises in Ukraine. Originality / scientific novelty. The originality of the conducted research lies in the study of a set of factors that influenced the financial condition of Ukrainian agrarian companies in the pre-war period, considering the peculiarities of the Ukrainian agrarian sector of the economy. Practical value / implications. Investors and financial institutions can benefit from the research results. By recognizing which factors have the most significant impact on financial performance, they can make more informed decisions when considering investments in Ukrainian agricultural companies. Understanding which factors influence financial performance can help in risk management for both agricultural companies and financial institutions

Analysis of financial performance determinants: evidence from Slovak agricultural companies

Purpose. The purpose of the present study is to examine the determinants of the financial performance of the Slovak agricultural companies. Methodology / approach. Bibliometric analysis was applied to analyze the literature, the results of the review were visualized using VOSviewer software. Panel data regression analysis, which was carried out using the GRETL software, was chosen to be the main research method for analyzing the influence of determinants on financial performance measures. 527 Slovak agricultural companies’ activity over the period 2015–2019 was chosen as the object of the study. The analysis is carried out based on the publicly available financial information (financial statements, management reports, official company websites) and information available in the “FinStat” database. Regression analysis was performed according to four developed models based on the use of four different dependent variables (Return on Assets (ROA), Net Profit Margin (NPM), Return on Equity (ROE), Return on Sales (ROS)) and 10 independent variables same for all the models (Leverage, Long-Term Debt to Assets, Short-Term Debt to Assets, Debt to Equity, Capital intensity, Tangibility of Assets, Current Ratio, Size, Dummy variable for type of ownership, Dummy variable for legal form). Fixed Effects Method was chosen as an estimate panel data parameter on the base of F-statistics test, Breusch-Pagan test, and Hausman test use. Results. The obtained results confirm the hypothesis about the existence of a distinctive impact of financial performance determinants due to the availability of the specific environment and features typical for the Slovak agricultural sector. None of the independent variables applied has a significant effect simultaneously on Models 1–4. We observed a negative significant impact at the 1 % level of l_Size on ROA and ROE of the Slovak agricultural companies. CapInt also has a negative significant impact on NPM and ROE. DtoE is found to have a positive impact on ROE. The complete lack of influence of AsTang in determining financial performance was revealed. The used dummy variables (DVTO, DVLF) were excluded from the composition of Models 1–4 during the regression analysis due to the availability of exact collinearity. Originality / scientific novelty. The uniqueness of the present study is that we identify the impact of the financial performance determinants specifically for the Slovak agricultural companies considering the specifics of the Slovak agricultural market in the context of the current problems in the sector of the economy being investigated. Practical value / implications. The obtained results can be used to improve the management decisions of the Slovak agricultural companies, to critically evaluate the state policy in the agricultural sector in the Slovak Republic, as well as clarify the recommendations given by various institutions to improve this sector of the economy

Financial performance determinants of Ukrainian agricultural companies in the pre-war period

Purpose. The purpose of the article is to identify the determinants of the financial performance of agricultural companies in Ukraine in the pre-war period. Methodology / approach. Panel data regression analysis, carried out using the GRETL software, was used as a research method. The financial statements of thirty Ukrainian agricultural companies over the defined period 2015–2021 were selected to be data for analysis. Three models were constructed in the article based on the use of three different dependent variables (Return on Assets, Return on Equity, Return on Sales) and seven independent variables (Current Ratio, Capital Intensity, Export Intensity, Leverage, Size, Dummy variable for agricultural sub-sectors, Dummy variable for location). The selection of the mentioned independent variables was logically substantiated by the structure of the financial reports of the Ukrainian agricultural companies and analytical system “You Control”. Results. The study of the determinants of financial performance of the agricultural companies is a widespread area of research among academicians, however, is characterized by quite controversial results. Some of these conclusions were refuted, but certain results were confirmed on the example of Ukrainian enterprises. The results of the panel regression analysis with respect to Models 1-3, partially are in contradiction with the conclusions of other studies regarding the impact of the determinants on the financial performance of agricultural companies. None of the chosen independent variables has a significant effect on all the dependent variables as investigated in the article, namely ROA, ROE, and ROS. This confirms the formulated in the study hypothesis regarding the availability of a unique set of financial performance determinants for agricultural enterprises for each individual country. The independent variables used in the study have the most significant impact on ROA. Primarily, ROA is significantly affected by CAPI (5 % level), EXPI (10 % level), and DVL (5 % level). The results obtained confirm a need for improving regional support and ensuring an access to capital for agricultural enterprises in Ukraine. Originality / scientific novelty. The originality of the conducted research lies in the study of a set of factors that influenced the financial condition of Ukrainian agrarian companies in the pre-war period, considering the peculiarities of the Ukrainian agrarian sector of the economy. Practical value / implications. Investors and financial institutions can benefit from the research results. By recognizing which factors have the most significant impact on financial performance, they can make more informed decisions when considering investments in Ukrainian agricultural companies. Understanding which factors influence financial performance can help in risk management for both agricultural companies and financial institutions

Trends in research of responsible investment in the context of sustainable development: bibliometric analysis

Purpose. The purpose of the article is to outline trends and priorities for the study of responsible investment in the context of sustainable development and explore research institutions and publishing activities in this area. Methodology / approach. The study used bibliometric, structural, cluster and graphic analysis, as well as methods for visualizing the publishing activity of scientists on responsible investment according to the Web of Science platform and using VOSviewer software. Results. Based on a study of 1534 articles on the topic of responsible investment, in such areas of analysis as publication categories, dynamics of publications, types of organizations, authors' activity, publishing rating, countries of publication activity, citations of articles, clustering of terms and cited authors, the bibliometric field of this concept was characterized and visualized. The most cited articles which are directed on revealing of tendencies of disclosure and the subsequent monitoring of subjects of VI as bases of sustainable development of economy are investigated. The publishing activity of the authors and the most cited and relevant articles are analyzed. Four thematic clusters in the study of responsible investment (empirical, behavioral, generalizing and supporting) and the most famous institutions, involved in the study of responsible investment, were revealed. Originality / scientific novelty. The main parameters of the bibliometric field of responsible investment were characterized by means of cluster, structural and graphical analysis of the dynamics of individual indicators. For the first time, on the basis of the identified clusters, the affiliation of the research topic to the related “empirical” and “supply” cluster was determined. It was determined that the connection between clusters of responsible investment is manifested in their role as tools and at the same time strategies for the formation of new investment opportunities. Practical value / implications. The obtained results allow substantiating the key approaches to understanding responsible investment and the most priority areas of its research, to determine the sources of its scientific and methodological support on the way to sustainable development