The role of internally generated goodwill in choosing areas and objects of investment
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Author(s)Svitlana LabunskaLink to ORCID Index: https://orcid.org/0000-0002-0989-6806
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Ľuboš CibákLink to ORCID Index: https://orcid.org/0000-0003-3881-7924
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Mykola SidakLink to ORCID Index: https://orcid.org/0000-0001-7173-3197
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Marharyta SobakarLink to ORCID Index: https://orcid.org/0000-0003-2531-907X
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DOIhttp://dx.doi.org/10.21511/imfi.20(2).2023.19
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Article InfoVolume 20 2023, Issue #2, pp. 215-231
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195 Downloads
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Creative Commons Attribution 4.0 International License
The purpose of the study is to develop and test in practice the method of analyzing the relationship between the formation of internally generated goodwill and investment attractiveness of an enterprise based on econometric modeling in order to improve the investment management process. Attracting additional investments, both for Slovakia and Ukraine, requires the identification of promising objects of investment. Assessment of enterprise’s potential cannot be accurately performed on the base of financial statements, which reflect only the state of assets. It is necessary to take into account the prospects for development of this business unit in the future, that largely depends on effective functioning of management system. The success of business processes depends on how rationally managers use the resources of the enterprise and form the structure of assets adequate to the demands of the market. The article considers the problem of estimating the value of enterprises in order to attract investments based on internally generated goodwill, and determines the peculiarities of the formation and types of goodwill of a commercial enterprise. As the main research method, canonical correlation modelling was used to analyze data of Ukrainian machine-building enterprises for the period 2017–2020. As a result, the factors responsible for the formation of internally generated goodwill were identified and classified according to their economic nature. Correlation dependencies between groups of initial and resulting coefficients were calculated and the areas of enterprise management that have the greatest impact on the formation of its market value were identified.
- Keywords
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JEL Classification (Paper profile tab)C51, G11, G31, M21, M49
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References44
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Tables2
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Figures4
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- Figure 1. Distribution of investment values and Global Innovation Index scores in Eastern Europe
- Figure 2. Distribution of GDP per capita values and Doing Business scores
- Figure 3. Industrial production dynamics and financial results of companies in Slovak Republic in 2021
- Figure 4. The system of indicators for the canonical analysis model to measure the impact of IGG on the investment attractiveness of an enterprise
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- Table 1. Indicators for assessing the impact of factors of internally generated goodwill formation on the investment attractiveness of an enterprise
- Table 2. The most influential indicators in the factor systems of the studied enterprises
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Income smoothing and market performance: empirical study on manufacturing companies listed in Indonesia stock exchange
Kencana Dewi , Mukhtaruddin ,
Iqbal Agung Prayudha
doi: http://dx.doi.org/10.21511/imfi.15(1).2018.10
Investment Management and Financial Innovations Volume 15, 2018 Issue #1 pp. 106-119 Views: 1690 Downloads: 296 TO CITE АНОТАЦІЯIn the age of modern accounting, the era where income information is viewed to be no longer the main information that investor seeks, income smoothing is proven to be still existing. This study aims to find why income smoothing (IS) still exists in Indonesia Stock Exchange (IDX) by analyzing its effect on the market performance (MP). The study divides MP into three perspectives: market response is representing current investor; market risk (MR) is representing potential investor; and market value (MV) is representing the management. Purposive sampling method is applied in this study and 65 companies are examined throughout 2011–2013.
Using three models to analyze each of the relation, the results shows that IS only significantly affects the MP of companies in the aspect of market response, while the other aspects, MR and MV, yield insignificant results. -
The role of earnings management in the relationship between accruals and market value
Nasim Aryannejad ,
Mohammadhossein Ghaemi ,
Keyhan Maham
doi: http://dx.doi.org/10.21511/imfi.15(1).2018.20
Investment Management and Financial Innovations Volume 15, 2018 Issue #1 pp. 236-244 Views: 1467 Downloads: 191 TO CITE АНОТАЦІЯThe paper aims to clarify the role of earnings management in the relationship between accruals and the market value of companies. Previous studies suggest that some managers, for providing a desirable image of their performance, manage their profits through distorting cash or accruals. Consequently, investors rely on this information and estimate inaccurate stability of accruals which lead to mispricing phenomenon. Finally, the returns earned by the investors will not be equal to the expected return and thus the accrual anomaly will be created.
To this aim, two hypotheses were developed and three regression models were applied to analyze the data. To analyze and estimate the models employed, the financial information of 110 companies listed on the stock exchange between years 2008 to 2014 is used. A selective approach to test the hypotheses is studying cross-sectional data.
After conducting statistical tests, the results showed that discretionary accruals through which earnings management is done are improperly valued by the market, but the issue is not applicable regarding the non-discretionary accruals. Based on the close relationship between earnings management and discretionary accruals it can be found that earnings management can have an effect on the relationship between accruals and market value. -
Intellectual capital and market value: evidence from Jordan
Mohammad Fawzi Shubita
doi: http://dx.doi.org/10.21511/imfi.16(4).2019.04
Investment Management and Financial Innovations Volume 16, 2019 Issue #4 pp. 37-45 Views: 1456 Downloads: 210 TO CITE АНОТАЦІЯThis research aims to apply the value-added intellectual coefficient (VAIC) model to test the impact of intellectual capital (IC) on market value of the Jordanian industrial firms. The research increases the awareness of the need for firms of all sizes to communicate and value their business beyond capturing numbers alone. The sample for this study is 73 Jordanian manufacturing shareholders companies during the period 2005–2017. The sample employed consists of 648 firm-year observations. Market value is measured using the market capitalization over the total assets. Valuation approaches are a challenging area created to enable the stakeholders, or outside parties, to put an economic value on a firm.
The IC and its components: capital employed (CEE), structural capital (SCE), and human capital (HCE) of industrial firms have been analyzed, and their impact on market value has been estimated using regression models. The results show that there is no relationship between IC and the market value; HCE is associated with the market value, and SCE and CEE are not associated with the market value. This could be explained by the increase in employees’ training, as a regular training program is an essential factor in managers’ and employees’ performance. Practically, investors have a positive view of a firm that has higher employee expenditure than its investment in physical capital. Future research should be made on the empirical analysis of other sectors to determine whether different results and explanations can be obtained.
