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on Corporate Finance |
| By: | Haris, Faldi; Rahadi, Raden Aswin |
| Abstract: | VC investment has undergone a substantial transition, particularly in emerging countries, where there is a growing entrepreneurial culture. Southeast Asia (SEA) has emerged as an image of trust due to its remarkable accomplishments in venture capital funding. Notwithstanding, the VC success rate is quite low, with up to 75 percent of venture-backed businesses failing to return cash to their investors and 30 to 40 percent of those 75 percent liquidating their assets, resulting in their investors losing their entire investment (Ghosh, 2012). In light of this context, this study sets out to investigate the behavior of venture capital firms in Southeast Asia and the complex decision-making processes involved. This research aims to enhance the success rate of VC firms and contribute to the advancement of VC literature by precisely identifying the relevant parameter. This study seeks to analyze the complex landscape of venture capital activities in a highly dynamic entrepreneurial ecosystem, using the complete framework created by Gompers et al. (2023). A case study, a widely recognized method in exploratory research, is used as the primary methodology to reveal novel themes and insights obtained from respondents in venture capital firms. Using a semi-structured interview, this study implies that VC fund structure and strategy, start-up screening criteria, start-up valuation, exit, and risk management have a significant effect on determining SEA VC firm investment decisions. This study is one of the first efforts to utilize Gompers et al.'s (2023) framework in the specific setting of Southeast Asia. This study contributes to the current research on venture capital decision-making by providing innovative measurement parameters, with a particular emphasis on the notion of "runway." These features, which relate to a startup's expenditure rate and its long-term viability offer a broader understanding of the financial factors that impact investments made by SEA VC companies. |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:t3byd_v1 |
| By: | Suhasto, RB. Iwan Noor; Anggraeny, Shinta Noor; Kirowati, Dewi; Khasanah, Alif Fidyah Nur |
| Abstract: | The aim of this research is to examine the effects of firm size, leverage, and free cash flow on earnings management and firm value. The population for this study consists of all companies listed on the LQ45 index at the Indonesia Stock Exchange from 2018 to 2022. The sample was selected using purposive sampling, resulting in 22 companies. This study employs a quantitative approach, utilizing IBM SPSS 23 for data analysis, with hypothesis testing conducted through Structural Equation Modelling (SEM). The results indicate that the proportion of firm size has a negative and insignificant effect on earnings management and firm value. Conversely, leverage growth and free cash flow have a positive and significant impact on both earnings management and firm value. |
| Date: | 2024–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:bj4cr_v1 |
| By: | Alfahiz, Anang Rizky |
| Abstract: | This study analyzes the relationship between Retained Earnings to Total Equity (RE/TE), Return On Assets (ROA), and inflation to Dividend Payout Ratio in conventional banks during the 2020 period. The author uses secondary data from 40 conventional banks listed on the Indonesia Stock Exchange (IDX) for 2020 in this study. The analysis method used is multiple linear regression to test the influence of the independent variable on the dependent variable. The results showed that RE/TE and ROA had a positive and significant influence on the Dividend Payout Ratio, while inflation had a negative but not significant influence. These findings indicate that a bank's internal financial performance, such as profitability, is more important in determining dividend policy than external factors such as inflation during the period. This research contributes to the understanding of the factors influencing dividend policy in the banking sector, as well as practical implications for bank management and investors in formulating effective dividend and investment strategies. |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:zvb2t_v1 |
| By: | Yan Li |
| Abstract: | As the global economic environment becomes increasingly unstable, enhancing financial flexibility to cope with risks has become the consensus of many companies. At the same time, environmental, social, and governance (ESG) performance may be one of the effective ways. We studied the impact of a firm's ESG performance on its financial flexibility with a sample of companies listed on the Hong Kong stock market from 2018 to 2022. The empirical results show that good environmental, social and governance performance can significantly improve a firm's financial flexibility. In addition, this paper also finds that the influence of ESG performance on financial flexibility is weak for state-owned enterprises due to the influence of governance structure and market characteristics. Finally, the further analysis shows that there is a mediating role played by financing constraints in this process. This study can provide background information for state-owned enterprises' governance, information disclosure, and corporate operations. It also has guiding significance for relevant investors, management and officials. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.14261 |
| By: | Bonthala, Ram; Purohit, Advaith; Haile, Dagim; Munipalle, Pravith; Krishnan, Pranav |
| Abstract: | This paper explores the evolution of private equity (PE), tracing its origins to early investment models and analyzing its modern developments. The focus is on understanding the dynamics of PE performance during downturns, the role of dry powder, and the challenges of regulation and transparency. Additionally, insights from interviews with local private equity professionals shed light on decision-making, risk management, and valuation methods in the private equity industry today. |
| Date: | 2024–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:8t7rx_v1 |
| By: | Vazirani, Ashish; Bhattacharjee, Titas |
| Abstract: | New venture investment decisions reflect misvaluations as many deserving proposals are rejected, while most invested proposals fail to provide the required financial returns. This suggests that investors overvalue and undervalue investment proposals. We have used the arguments of dual process theory and salience theory to explain the cause of misvaluations. An experimental setup is used where the treated group is given time constraints to make the investment. Results show that investors under time constraints overvalue investment proposals, while reference-based comparison of salient information signals results in undervaluation. Results further show a significant impact of time constraints on the reference for comparison of proposals. Investors under time constraints consider only the last proposal as a reference to compare salient information signals, in contrast, they consider information from multiple previous proposals in the absence of time constraints. This study provides the specific source of misvaluations as per the context of overvaluation and undervaluation of new venture investment proposals. |
| Date: | 2024–04–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:az4yr_v1 |
| By: | Chuan Chen; Michele Fioretti; Junnan He; Yanrong Jia |
| Abstract: | We examine the growing gender gap in venture capital funding, focusing on accelerator programs in the U.S. We collect a unique dataset with detailed information on accelerators and startups. Using a two-stage methodology, we first estimate a matching model between startups and accelerators, and then use its output to analyze the gender gap in post-graduation outcomes through a control function approach. Our results show that female-founded startups face a significant funding disadvantage, primarily due to relocation challenges tied to family obligations. However, larger cohorts and higher-quality accelerators help reduce this gap by offering female founders better networking opportunities and mentorship. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.14984 |