Credit risk management is of considerable importance for banks, and the most common credit risk models are based on combining client’s private information with credit terms. However, if credit terms are an integral part of initial calculations, then results have to be recalculated for every alteration of credit terms. Thus, banks obtain ‘one-shot’ results from decision support systems that are built with application of these models. In the given paper a credit risk model is proposed. This model is based on a separate analysis of client’s private information and credit terms in order to construct a contour subspace for credit terms that correspond to an equal credit risk value. Application of a proposed model will add advanced options for decision support systems in loan granting, i.e. to visualize a contour subspace of credit terms for a client according to an individual creditworthiness estimation, provide options to choose credit terms from this contour subspace, and manage credit terms on-line according to the dynamics in a creditworthiness estimation.
This study explores the recovery in the Market Value Added (MVA) of European companies after the recent global economic crisis in 2008–2009. It introduces empirical evidence that intangible-intensive strategy in human and relational capital reinforces speed of the after-crisis correction for companies. Based on a panel dataset of more than 1600 listed corporations this research aims to discover drivers of Market Value Added trends in 2011–2013. The established results contribute to the understanding of the advantages that companies can exploit for the recovery after systematic shocks of markets. Our study demonstrates that intangible-intensive strategy not always enabled faster recovery speed. Meanwhile, it provided year-to-year acceleration of MVA growth after crisis.
This paper aims to analyze how ownership influences the performance of European football teams. The study of efficiency allows us to identify relative performance in the achievement of several objectives, as is the case of football teams pursuing both financial performance and sports success. The analysis shows that football teams organized as members clubs, with dispersed ownership and uncontrolled by foreign investors perform better. Thus, property structures facilitating less control over managers relate positively to performance.
This study explores the value creation and agent conflict in a company that employs intangibles. The conceptual model of value creation is used to test how intangibles affect companies' outperforming and simultaneously build investors' expectations. The research is carried out using a sample of more than 1,650 European companies covering the period from 2004 to 2011. The study reveals the diverse impact of intangibles on the outperforming of a company by Economic Value Added (EVA) and its ability to create market value (MVA). The study discovers that managers are prone to set positive signals for investors rather than create sustainable competitive advantages. This work contributes primarily to the field of corporate governance in companies that employ intangibles. The issues to be considered when designing rules and incentives for proper communication between managers and investors that drive both outperforming and sustainable value creation are emphasized.
Innovative and research activities within universities are increasingly linked with regional socio-economic conditions and innovative capacities of local business. In less innovative Russian regions, though, prospects for mid-range universities might be limited due to poor research quality and the lack of mutual trust between Academia and industry. In this paper university-level data are analysed in relation to regional innovative development. Despite gross heterogeneity within the sample, the findings suggest that research and commercialization propensities are likely to be shaped by the type of university, its proactive approach and internal structure rather than regional settings. Mid-range universities might consider less formal ways to contribute to regional innovation systems, which is more in line with ‘engaged’ rather than ‘entrepreneurial’ university approach.
Research question: Previous papers analysing broadcast demand for sports have provided general findings for the countries studied. However, each region in the same country could have different determinants. The present study aims to analyse the demand for broadcast football, emphasising the effect of the uncertainty of outcomes in Brazil’s two biggest markets: Rio de Janeiro and São Paulo.
Research methods: The dataset comprises an unbalanced panel with club fixed effects, including all 228 broadcast matches from the Brazilian League across the seasons 2013 to 2015 – 115 from the state of Rio de Janeiro and 113 from the state of São Paulo. Three linear regressions are carried out in order to determine the importance of the uncertainty of outcome, as well as the existence of win preference or loss aversion behaviours.
Results and findings: The results highlight similarities between the markets, such as higher audiences on weekdays and the strong importance of derby matches in attracting viewers. However, the findings reveal that Rio de Janeiro fans exhibit loss aversion and São Paulo supporters prefer more certain matches.
Implications: Consumer preferences may differ across a country. Hence, by understanding the diversity in fan behaviour, TV channels might more effectively adjust the matches they broadcast, increasing fan interest in these games, as well as enhancing the channels’ and the clubs’ revenues.
In this paper, we suggest an approach to the study of the financial instability based on the model of evolutionary processes. In the first place, we present some empirical facts that confirm that the stock’s price dynamics is better described by the Markov switching model rather than by the pure random walk. Further, using the equilibrium model of price formation, we show that the temporary price trends on stock market are evolutionary processes that occur in the conditions of a duality of the equilibrium between the market price and the fair value. Then, within the framework of the constructed model, we analyze the causes of the financial market instability and its impact on the real sector, and show how the financial markets create a destructive impulse under the economic growth slowdown, and therefore adversely affect the process of innovations diffusion into the market. The conducted study shows that the causes of the financial instability are the capital concentration in the narrow circles of society and the lack of investment opportunities, as compared with the available financial resources, whereas the symptoms are frequently recurring financial bubbles and crises.
In this research sex and age of the borrower are considered as factors influencing his intention to use lending services and a loan purpose. Target groups of clients are defined through logistic regression modeling. Implication of obtained results allows bank to increase efficiency of its credit policy in the retail market of bank crediting.
The article investigates the correlation between the factors of enhancing traffic safety on highways and parameters of the economic growth in Russia and in countries with transition economy; such correlation does not always lead to traffic safety enhancement. As a rule, the population motorization (car density) level growth in such countries is not accompanied by efficient actions on accident rate decrease. Among the factors enhancing traffic safety on highways are the efficiency of traffic infrastructure planning (changing and removing traffic flows from cities’ centers, creation of a large amount of pedestrian and bicycle lanes separated from traffic flows) as well as harmonization of physical infrastructure and safety goals, ensuring conjugation of the developed transport infrastructure with the decrease of the share of private vehicle fleet and increase of the share of public transport.
The paper proposes company’s investment activity simulation model; on its basis we investigate the behavior of company’s fundamental value under different control parameters. The interaction of bank and corporate borrower’s value growth is analyzed. On the basis of regularities obtained a set of decision principles has been formulated determining bank's decision on appropriateness of financial resources placement among corporate banking market aimed at bank and corporate borrower fundamental value formation.
Purpose – This study explores company strategies for intangibles. We investigate whether it is reasonable for companies to intensify intangibles when the current strategy is not intangible-intensive. This paper aims to elaborate a theoretical model to describe the strategic decision-making in companies.
Design/methodology/approach – We use the Bellman equation framework to find the conditions under which a change in strategy for intangibles is reasonable.
Findings – The results determine the parameters of returns on intangibles in different strategies, the optimal intangible stock and the influence of external economic shocks. The findings of our study demonstrate that many requirements have to be met to make intangible-intensive strategy beneficial for a company. Moreover negative shocks of crises force a company to postpone a new strategy on intangibles.
Practical implications – This research provides an insight into strategic behaviour of companies under uncertainty. The theoretical findings demonstrate under which conditions companies should decide to switch to a strategy more intangible-intensive. This model can be used to empirically test parameters of different investment strategies of companies using structural estimation techniques.
Originality/value – This work contributes to the theory of managerial economics giving closed form solutions for the dynamic optimization of company behaviour. The findings also show how this behaviour might change when economic crises are faced or expected.
Even six years after the acute phase of Great Recession 2007-2009, euro area economy does not show strong growth, which is indicating a severe structural and cyclical imbalances in the European economy. Empirical data evident that Euro area economy as the US, since 2009 are located in an unstable equilibrium that is prone to buckling under the influence of small internal or external price shocks. For the detection of the bifurcation process, i.e. transition to a state of metamorphosis, we have specially developed models of nonlinear dynamics, which describe five possible state of the economic system and, in particular, show that the Eurozone economy is entering a very important stage of bifurcation and the consequences of which are fundamental to determine the nature of the future economic development of both European and global economy.
The rapidly growing Chinese market attracted the attention of researchers. In China, as in Russia, there are major, significant transactions. It is important to study the dynamics of the insurance market through an investment deal.