Country Risk Decision-Maker in Applying the Yield Cash-Flow Estimate

Cârstina, Silviu; Siminică, Marian; Cîrciumaru, Daniel; Bandoi, Anca

doi:10.35808/ijeba/64

Cited by 3 publications

(3 citation statements)

References 3 publications

(3 reference statements)

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“…It was initiated by researchers arguing that DC MNEs have specific features that differentiate them from "conventional" MNEs from developed countries in terms of ownership advantages, directions of geographical expansion, and the mode of overseas activity (Lecraw, 1977;Kumar and McLeod, 1981;Lall, 1983;Khan, 1987). In the first wave, DC MNEs made foreign investments in neighboring countries and countries with a similar or lower development stage (Heenan and Keegan, 1979;Wells, 1983;Yeung, 1994;Carstina et al, 2015). The choice was dictated, among others, by little experience in conducting foreign activity (Narula, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

The Largest Non-Financial Multinational Enterprises in the World and Those in Developing and Transition Economies

Jaworek¹,

Karaszewski²

2021

ERSJ

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Purpose: The purpose of the article is to present selected manifestations of the process of approaching the scale of foreign investment activity of entities from developing countries to entities from developed countries, as well as the potential of the largest investors from these two groups of countries. Design/Methodology/Approach: The study is based on information obtained from the United Nations Conference on Trade and Development and Brand Finance's statistical sources. The study uses statistical and economic analysis, comparison, analogies, synthesis, and the method of measuring and aggregating data and tabular method. The choice of economic parameters presented below and the related parameter formulas, as proposed by the authors, are based on the preliminary query of the scientific literature on the subject. Findings: The FDI outward stock at the end of the second decade of the 21st century show a clear increase in the share of developing countries, however, the distance between them about developed countries is still considerable. The convergence is evidenced, e.g., by the growing share of MNEs in both groups representing highly technologically advanced industries, although in the 100 largest MNEs from developing and transition economies, it is clearly lower. At the same time, significant differences in the structure by countries both in FDI outward stock and in the largest MNEs of the presented groups persist or intensify. Practical Implications: The presented results prove that companies from developing and transition economies find an effective tool for building international competitiveness by making foreign direct investments. Their experiences may serve as an example and encouragement for local companies to undertake an international expansion through capital allocation. Originality/Value: The article presents the process of approaching FDI outward stock from developed and developing and transition economies in the past thirty years. The inference basis was not only data specifying changes in the share of both groups of countries in the value of FDI outward stock, but also data describing the largest MNEs worldwide and MNEs from developing and transition economies. This approach has the value of originality.

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Section: Literature Reviewmentioning

confidence: 99%

The Largest Non-Financial Multinational Enterprises in the World and Those in Developing and Transition Economies

Jaworek¹,

Karaszewski²

2021

ERSJ

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“…The central bank's foreign exchange reserves' purpose is to guarantee the credibility and financial stability of a country, including its financial liquidity and the security of foreign exchange transactions. The size and structure of foreign exchange reserves should also guarantee the possibility of conducting an effective monetary and exchange rate policy in the country (Tingting and Jiajie, 2020;Carstina et al, 2015;Thalassinos et al, 2015).…”

Section: The Essence and Reasons For Having Foreign Currency Reservesmentioning

confidence: 99%

The Size and the Main Determinants of China’s Official Currency Reserves in the Period 1990-2019

Misztal¹

2021

ERSJ

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Purpose: This paper aims to analyze the size of China's Central Bank's foreign exchange reserves and the main determinants of changes in China's foreign reserves. The publication attempts to prove two theses. According to the first thesis, the current foreign exchange reserves level in China has been higher than the optimal level suggested by the foreign exchange reserves adequacy ratios. However, in line with the second thesis, the most important factors determining China's foreign exchange reserves were changes in the value of imports and changes in the level of China's short-term foreign debt. Design/Methodology/Approach: The study uses a research method based on literature studies in the field of banking and international finance and econometric methods (the classic least squares method). The selection of these research methods and their use are elements of the author's approach to the problem of the optimal level of foreign exchange reserves in China. Findings: Research revealed that for almost the entire period 1990-2019, the value of China's foreign exchange reserves was higher than the optimal values, as suggested by the adequacy ratios of currency reserves. The exceptions were the ratio of the optimal level of foreign exchange reserves, calculated as 20% of the M2 money supply, and the ratio calculated by the IMF methodology for countries with constant exchange rates. China's relatively high foreign exchange reserves were adequately hedged against the possible effects of economic crises, while the relatively high level of these reserves led to their low profitability. The analysis results indicated that changes in the value of China's foreign exchange reserves were, to the greatest extent, determined by the inflow of foreign direct investment and changes in import expenditure. Practical Implications: The discussion on the accumulation of foreign reserves should have practical implications and be set to eliminate threats, not to individual economies but to maintain global financial stability in the world. On the other hand, the currency reserves adequacy indicators themselves should be used flexibly and should reflect individual countries' economic specificities. Originality: So far, no such comprehensive research has been carried out on the magnitude and determinants of China's foreign reserves changes. What is more, the analysis covers a long period of research (1990-2019) and is based on the proprietary model, estimated with the use of econometric tools.

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“…The examination additionally verifies this by featuring how higher the remote trade presentation of industry, estimated in terms of professional career balance (net inflows), the higher is their affectability to swapping scale hazard. A conceivable purpose behind such premium could be the deficient support by Indian firms to moderate the conversion scale hazard (Carstina et al, 2015). Piyali and Anuradha (2018) studied the impact analysis of macroeconomic variables on the stock market.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Currency Fluctuations on Equity and Debt Market

Kotishwar¹

2020

IJEBA

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Purpose: This study attended to investigate the impact of currency fluctuations on equity and debt markets. Furthermore, the study deals with investments in equity considering the currecy as rupee vs. dollar relationship. The European Central Bank has been considered for the external debt market investments considering the euro as the currency. The study mainly focused on the impact of rupee vs. dollar on equity and the euro impact on ECB for debt market investments. Design/Methodology/Approach: The tools applied are Bivariate Correlation, Ordinary least square method, ARCH model and Vector autoregressive model. Findings: The study reveals that from 2008 to 2019, the bivariate correlation result indicates that equity investments have a significant relationship with the rupee vs. the dollar. It has been observed that the euro has also a moderate relationship with the debt investments and the OLS result indicated that the euro impact on debt investments is observed to be insignificant. The ARCH result stated that the currency is having a significant effect on the fund's volatility. The VAR estimated that future equity and debt markets are expected to go up shortly. Practical Implications: The present study result stated that the rupee vs. dollaris having the impact on the equity investments but the euro impact is observed to be insignificant. Therefore, the equity investors should focus more on the rupee vs. dollar fluctuation, so that inflows and outflows of FII funds in to Indian equity market can be identified. Originality/value: The present study added the scholarly value to the equity markets with regard to the currency fluctuations effect on the equity and debt market investments. The investors of equity and issuers of ECB's investments can consider this study for their decision making.

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Country Risk Decision-Maker in Applying the Yield Cash-Flow Estimate

Cited by 3 publications

References 3 publications

The Largest Non-Financial Multinational Enterprises in the World and Those in Developing and Transition Economies

The Largest Non-Financial Multinational Enterprises in the World and Those in Developing and Transition Economies

The Size and the Main Determinants of China’s Official Currency Reserves in the Period 1990-2019

The Impact of Currency Fluctuations on Equity and Debt Market

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