Market reaction to firms’ investments in CSR projects

Purpose: The purpose of this paper is to determine the impact of corporate investments in corporate social responsibility (CSR), measured by the environmental, social and government (ESG) rating, on the market valuation of a firm's stocks and to explain the regional differences in the degree of this influence. Design/methodology/approach: The empirical study uses linear and non-linear panel regression models for a panel sample of 951 firms listed in Asia, North America and Europe operating in innovative industries. Findings: The CSR score was found to be significant in terms of stock excess return on the regional level. However, this finding cannot be extrapolated to the global scale. ESG rating is priced by the European and North American markets negatively, while in the Asian market, it is positive. This penalty (negative influence) is greater than the reward for one point increase in ESG rating. Practical implications: The results of this empirical study could be used by firms' managers to adjust strategies aimed at stock value growth and by investors to select an investment strategy to maximize return. Originality/value: The impact of investments in CSR on stock excess return over a defined benchmark is assessed. The study reveals regional differences in the impact of CSR investment using a sample of Asian, European and North American firms. The authors apply a more advanced lagged CSR performance (d.ESG) assessment based on the methodology of Zhang and Rajagopalan (2010).Objetivo: El propósito de este documento es determinar el impacto de las inversiones corporativas en responsabilidad social corporativa (RSC), medida por la calificación ambiental, social y gubernamental (ASG), en la valoración de mercado de las acciones de una empresa y explicar las diferencias regionales en el grado de esta influencia. Diseño/metodología/enfoque: El estudio empírico utiliza modelos de regresión de panel lineal y no lineal para una muestra de panel de 951 empresas cotizadas en Asia, América del Norte y Europa que operan en industrias innovadoras. Hallazgos: Se encontró que la puntuación de CSR era significativa en términos de exceso de rentabilidad de las acciones a nivel regional. Sin embargo, este hallazgo no se puede extrapolar a escala global. La calificación ASG tiene un precio negativo en los mercados europeo y norteamericano, mientras que en el mercado asiático es positivo. Esta penalización (influencia negativa) es mayor que la recompensa por un aumento de un punto en la calificación ASG. Implicaciones prácticas: Los resultados de este estudio empírico podrían ser utilizados por los gerentes de las empresas para ajustar estrategias dirigidas al crecimiento del valor de las acciones y por los inversores para seleccionar una estrategia de inversión para maximizar el rendimiento. Originalidad/valor: Se evalúa el impacto de las inversiones en RSC sobre el exceso de rentabilidad de las acciones sobre un punto de referencia definido. El estudio revela diferencias regionales en el impacto de la inversión en RSE utilizando una muestra de empresas asiáticas, europeas y norteamericanas. Los autores aplican una evaluación rezagada del desempeño de la RSE (d.ASG) más avanzada basada en la metodología de Zhang y Rajagopalan (2010)

Epigenetic analyses in blood cells of men suspected of prostate cancer predict the outcome of biopsy better than serum PSA levels

Lymphocytes from the peripheral blood of patients with prostate cancer—the most frequent (noncutaneous) tumor in men—display epigenetic aberrations (altered modes of allelic replication) characteristic of the malignant phenotype. The present study aims to determine whether replication aberrations add certainty to the suspicion of prostate cancer provided by the prostate-specific antigen (PSA) blood test. The allelic replication mode (whether synchronous or asynchronous) was exemplified for RB1 and AML1. These two genes normally exhibit a synchronous mode of allelic replication. Fluorescence in situ hybridization (FISH) replication assay was used for replication analyses. The FISH assays were applied to PHA-stimulated lymphocytes, established from peripheral blood samples of 35 men referred to biopsy due to suspected prostate cancer. Following biopsy 13 out of these 35 men were found positive for prostate malignancy. The FISH assay—showing asynchronous or synchronous RB1 and AML1 replication—was able to predict, respectively, the results of all biopsy-positive men and in 18 out of the 22 biopsy-negative ones. These measurements, distinguishing biopsy-positive from biopsy-negative men, were highly significant (P < 10−8; 100% sensitivity and 81.8% specificity). Yet, distinguishing between the two groups of men based on the PSA measurements was nonsignificant (P > 0.70). The FISH replication assay applied to peripheral blood lymphocytes of 35 men referred for biopsy significantly predicted the outcome of the pathological examination, more precisely than the serum PSA test. As such, the epigenetic alteration offers a potential noninvasive blood marker, complementary to the PSA, for a preliminary prostate cancer diagnosis

Sustainability through digitalization: European strategy

The process of digitalization is quick, unstoppable and it is moving in unpredictable directions. Hence, governments and policymakers should shape a digital future that makes the most of the great opportunities that digital transformation offers, in order to improve people’s lives and boost economic growth for countries, while ensuring that nobody is left behind, i.e. secure sustainable development. The “Digital Agenda for Europe”, which was developed after the 2008-2009 economic crisis, served as a framework for ICT and digitalization to boost European economy and sustainable growth. We present the research how the European Digital Agenda is integrated with sustainable goals of “Europe 2020”

About the new industrial production management concept as the company strategy in the fourth industrial revolution

The new industrial production management requires a review of the third industrial revolution results and accounting for mass adoption of information and communication technologies to create the organizational basis of the fourth industrial revolution. The future changes will affect all components of the organization and management components of industrial enterprises, forming the potential of new competitive advantages in a global economy. The research included the identification of key factors of formation, development and destruction (absorption related branches of knowledge) the industrial production management as the theory and practical activities, given the critical approach to its nature and processes. Revealed common signs of the industrial production management need as a field of knowledge in the framework of previous and current industrial revolutions. It is shown that the industrial production management effectively solves the problem of subsistence economy, and substantiates that the modern digital economy also has the characteristics of subsistence economy. It is important the necessity of formulation of a new organizational thinking, the implementation of which is possible in the modern interpretation of the project office. The article represents the theoretical basis for developing practical recommendations for the formation of the new concept of industrial production management to take advantage of the impact of engineering component on the economic results and the creation of project offices for the development of traditional and created markets in the organization of a new production mode (based on the digital economy)

About the new industrial production management concept as the company strategy in the fourth industrial revolution

The new industrial production management requires a review of the third industrial revolution results and accounting for mass adoption of information and communication technologies to create the organizational basis of the fourth industrial revolution. The future changes will affect all components of the organization and management components of industrial enterprises, forming the potential of new competitive advantages in a global economy. The research included the identification of key factors of formation, development and destruction (absorption related branches of knowledge) the industrial production management as the theory and practical activities, given the critical approach to its nature and processes. Revealed common signs of the industrial production management need as a field of knowledge in the framework of previous and current industrial revolutions. It is shown that the industrial production management effectively solves the problem of subsistence economy, and substantiates that the modern digital economy also has the characteristics of subsistence economy. It is important the necessity of formulation of a new organizational thinking, the implementation of which is possible in the modern interpretation of the project office. The article represents the theoretical basis for developing practical recommendations for the formation of the new concept of industrial production management to take advantage of the impact of engineering component on the economic results and the creation of project offices for the development of traditional and created markets in the organization of a new production mode (based on the digital economy)

Market reaction to firms’ investments in CSR projects

Purpose: The purpose of this paper is to determine the impact of corporate investments in corporate social responsibility (CSR), measured by the environmental, social and government (ESG) rating, on the market valuation of a firm's stocks and to explain the regional differences in the degree of this influence. Design/methodology/approach: The empirical study uses linear and non-linear panel regression models for a panel sample of 951 firms listed in Asia, North America and Europe operating in innovative industries. Findings: The CSR score was found to be significant in terms of stock excess return on the regional level. However, this finding cannot be extrapolated to the global scale. ESG rating is priced by the European and North American markets negatively, while in the Asian market, it is positive. This penalty (negative influence) is greater than the reward for one point increase in ESG rating. Practical implications: The results of this empirical study could be used by firms' managers to adjust strategies aimed at stock value growth and by investors to select an investment strategy to maximize return. Originality/value: The impact of investments in CSR on stock excess return over a defined benchmark is assessed. The study reveals regional differences in the impact of CSR investment using a sample of Asian, European and North American firms. The authors apply a more advanced lagged CSR performance (d.ESG) assessment based on the methodology of Zhang and Rajagopalan (2010).Objetivo: El propósito de este documento es determinar el impacto de las inversiones corporativas en responsabilidad social corporativa (RSC), medida por la calificación ambiental, social y gubernamental (ASG), en la valoración de mercado de las acciones de una empresa y explicar las diferencias regionales en el grado de esta influencia. Diseño/metodología/enfoque: El estudio empírico utiliza modelos de regresión de panel lineal y no lineal para una muestra de panel de 951 empresas cotizadas en Asia, América del Norte y Europa que operan en industrias innovadoras. Hallazgos: Se encontró que la puntuación de CSR era significativa en términos de exceso de rentabilidad de las acciones a nivel regional. Sin embargo, este hallazgo no se puede extrapolar a escala global. La calificación ASG tiene un precio negativo en los mercados europeo y norteamericano, mientras que en el mercado asiático es positivo. Esta penalización (influencia negativa) es mayor que la recompensa por un aumento de un punto en la calificación ASG. Implicaciones prácticas: Los resultados de este estudio empírico podrían ser utilizados por los gerentes de las empresas para ajustar estrategias dirigidas al crecimiento del valor de las acciones y por los inversores para seleccionar una estrategia de inversión para maximizar el rendimiento. Originalidad/valor: Se evalúa el impacto de las inversiones en RSC sobre el exceso de rentabilidad de las acciones sobre un punto de referencia definido. El estudio revela diferencias regionales en el impacto de la inversión en RSE utilizando una muestra de empresas asiáticas, europeas y norteamericanas. Los autores aplican una evaluación rezagada del desempeño de la RSE (d.ASG) más avanzada basada en la metodología de Zhang y Rajagopalan (2010)

Measuring value created by business models in the sharing economy

The sharing economy forms a modern sustainable trend, combining the economic and social-ethical benefits of using, rather than owning. The article studies such factors as social approval, economic choice and digital coordination influencing the effectiveness of business models of the sharing economy, but the full value of which has not yet been established. The methodological basis of the research includes neoclassical and neoinstitutional economic theories and the concept of economic collaboration. Among the research methods applied are a value-based approach to discussing the substance of collaborative consumption business models, a critical analysis of the peculiarities of the economic choice between saving and consumption, and a qualitative analysis of demand on the basis of a socially confirmed interest in collaborative consumption. The research develops five types of models for creating and redistributing income in the sharing economy and finds that the key advantage of the sharing economy is the confirmed demand of a new class of consumers, which reduces the probability of marketing mistakes. The authors state that any form of collaborative consumption for ensuring transparency of transactions and correctness of taxation should be regarded as a service. We design an alternative model for assessing the lower bound of the value created, which takes into account the frequency of consumers’ repeated requests to previously provided services, assuming that social approval shifts the line of choice and does not create a new value. The theoretical and practical significance of the research lies in the contribution to the value measurement of shared consumption based on consumer signals in the form of public approval (social initiative or testing) and profitability evaluation (lower bound) of the shared use by the consumer

Strategic Innovation as a Factor of Adaptation of National Economies to the Development of Global Value Chains

In age of sustainable development, strategic innovations have become the most important factor in the adaptation of national economies to dynamic global changes, encompassing trade and economic relations between the leading and developing countries of the World. At the same time, the task of this study was to reveal the complex and contradictory role of strategic innovations in the development of national economies against the background of the transformation of global value chains (GVCs). Main methods for solving the problem were empirical methods of comparative and structural analysis, as well as econometrics. The study analyzed 44 countries classified by the World Bank in the group of countries with per capita incomes below and above the average, as well as with high income. Results of the calculations made it possible to establish a highly differentiated relationship between the share of products manufactured by foreign companies operating in the host countries, on the one hand, and indicators of the dynamics of foreign direct investment (the number of researchers engaged in R&amp;D, the number of technical specialists involved in research and development (R&amp;D), the cost of research and development in the territory of the host countries), on the other hand. This made it possible to determine the role of strategic innovation in the adaptation of national economies. The established dependencies expand the understanding of the role of strategic innovations in the formation and further development of global value chains and their significance in evolution: from process and product innovations of individual companies to the formation of global innovation ecosystems