We investigated 34 empirical studies aimed at examining the capital structure determinants in firms operating in Poland to test to what degree the financing patterns were steady during the observed ...period (2001-2012). Specifically, in conducting the survey we were motivated by the following research questions which constitute the objectives of the article: (1) which factors - country or firm-specific - are more relevant in explaining leverage in Poland, (2) which theory - trade-off or pecking order - gains greater support in Poland, and (3) what is the significance of the optimal capital structure notion in Poland. Our results show that financing patterns changed importantly during the last 20 years, which manifests itself mainly in gradual increase in debt ratios with a dominant role of short-term debt, along with the decrease in the importance of country-specific factors (especially in large-sized, listed firms). The signs of the associations between leverage and the key firm-specific factors remained relatively stable during the investigated period, with the exception concerning tangibility. These signs provide greater support for pecking order theory, with at most a moderate role of the target capital structure.
RIBV is one of the possible variants of residual income calculation based on unadjusted book values. The usefulness of residual income should always be evaluated separately from the point of view of ...its motivational function and informational function. From the first perspective, RIBV is weak goal-congruent (in a decisional sense), although more goal-congruent than traditional accounting metrics. Problems implied by weak goal-congruence of RIBV can be solved by utilization of a tool allowing for reduction in managerial myopia (e.g. a bonus bank). However, such tools do not resolve the problem of the low informative usefulness of RIBV, that was confirmed by the empirical research presented in the article. The problem manifests itself in the fact that RIBV can signal value creation (destruction) when it is not created (destroyed), it can also exhibit value created (destroyed) sums that are not true. Thus, periodic performance measurement, evaluation and a compensation system that is to be based on RIBV must include not only a tool resolving problems resulting from the low motivational usefulness of the residual income version, but also a tool resolving problems resulting from the low informational usefulness of RIBV. Multidimensional evaluation of RIBV performance, utilizing RIBV radar presented in the article, can serve as such a tool. PUBLICATION ABSTRACT
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We investigated 34 empirical studies aimed at examining the capital structure determinants in firms operating in Poland to test to what degree the financing patterns were steady during the observed ...period (2001-2012). Specifically, in conducting the survey we were motivated by the following research questions which constitute the objectives of the article: (1) which factors - country- or firm-specific - are more relevant in explaining leverage in Poland, (2) which theory - trade-off or pecking order - gains greater support in Poland, and (3) what is the significance of the optimal capital structure notion in Poland. Our results show that financing patterns changed importantly during the last 20 years, which manifests itself mainly in gradual increase in debt ratios with a dominant role of short-term debt, along with the decrease in the importance of country-specific factors (especially in large-sized, listed firms). The signs of the associations between leverage and the key firm-specific factors remained relatively stable during the investigated period, with the exception concerning tangibility. These signs provide greater support for pecking order theory, with at most a moderate role of the target capital structure.
Periodic performance measure should be goal-congruent: it ought to motivate managers to achieve firm's goals, including its ultimate goal, i.e. NPV maximization (owners' wealth maximization). It ...should also be controllable and simple. There is a measure especially promising in the field of congruity—residual income and its most popular variant, economic value added (EVA). One can distinguish three versions of EVA using three different methods of depreciation: EVA based on book depreciation (EVABV), EVA based on annuity depreciation (EVAANN) and EVA based on economic (present value) depreciation (EVAPVD). First version—EVABV—offers so called weak goal-congruence, second one—semi-strong goal-congruence and finally there is strong goal-congruence in the case of EVAPVD (with IRR as discount rate). In practice the difference in the level of congruence between EVABV and EVAANN is relatively small. They are also equally controllable because they do not include expectations concerning future performance. EVAPVD is much less controllable because of its dependency on expectations via economic (market) values. From the point of view of simplicity, EVABV is the most preferable version. EVAANN and EVAPVD are much less practical. Ultimately, it seems that EVABV can offer the most beneficial proportions of congruity, controllability and simplicity, especially if one take into account the fact that stronger congruity can be achieved by imposing a special mechanism, e.g. bonus bank.
The article discusses ten versions of residual income known in the literature from the point of view of four criteria that are of special importance if the measure is to be the basis of managerial ...bonuses: goal-congruity, controllability, understandability and practicability. There is – on average – a considerable trade-off between goal-congruity and the three remaining criteria. However, there are residual income versions – like net economic income (NEI) and the variant of residual income that is based exclusively on unadjusted book values (RIBV) – which demonstrate outstandingly favorable levels of goal-congruity, controllability, understandability and practicability. Although NEI exhibits the highest level of goal-congruity among the ten versions of residual income studied in the article and acceptable levels of three remaining features, it is deficient of intensive scientific examination which is necessary to make such a new tool the subject of justified recommendation. On the other hand, RIBV is the most controllable and seems to be the most understandable and the most practicable among the ten versions analyzed in the paper. However, its goal-congruity is relatively low. Yet, it can be improved without making the computational formula more complex simply by including some mechanisms making managers less myopic in bonus plan architecture.
Residual income should be considered a specific class of metrics rather than just one particular metric. There are at least several concepts of the way residual income should be measured known today. ...They differ in the degree to which expectations concerning future performance are included in the formula (through economic values). This determines controllability of the measure. High controllability is considered one of two primary properties of a good performance metric (the second one is high goal-congruity). From this perspective, residual income variants known today can be divided into three groups having different levels of controllability: low (expectations affect return on capital as well as cost of capital in the residual income formula), medium (expectations affect only one variable in the residual income formula) and high (expectations do not affect the residual income formula). PUBLICATION ABSTRACT
Demographic changes along with shifts in pension system in Poland lead to increasing interest in investment products allowing for voluntary cumulation of retirement capital. What is key for the ...selection of such product, is its effectiveness measured by the relation of benefits to costs, including risk. The article demonstrates the results of study in which we estimated and evaluated the effectiveness of unit-linked insurance funds which represent such class of financial products. The examination was aimed at checking whether the funds under research generate abnormal and superior rates of return as well as whether they are managed actively or passively. We utilized OLS method to estimate CAPM parameters for studied funds and we calculated Treynor ratios, Jensen alphas and tracking errors for them. As the result, we obtained estimations evidencing negative abnormal and negative superior rates of return for almost entire observation period. We also reported passivity in managing the funds.
We applied Bayesian networks to distinguish groups of countries different in terms of their level of entrepreneurship growth as measured by new business density and to find factors responsible for ...the differences. The objective of the article is to check the applicability of Bayesian networks in filtering variables critical for entrepreneurship and its growth in the multidimensional data environment, and hence to shed a new light on the forces underlying the phenomenon. We detected considerable differences in the sets of key factors responsible for entrepreneurship growth among five groups of countries sorted out on the basis of their performance in terms of the entrepreneurship growth. Except the positive dimension, our study has also a normative value as the empirical findings gathered by us can help to formulate fitted recommendations as to the entrepreneurship stimulation in various socioeconomic and political settings.
W ocenie wynikow dzialalnosci kazdego przedsiebiorstwa szczegolna role odgrywa jego rentownosc, czyli zdolnosc do generowania zyskow (dochodowosc). Dzialalnosc biznesowa jest przeciez podejmowana i ...prowadzona ze wzgledu na jej potencjal zarobkowy. To, czy przedsiebiorstwo jest rentowne czy tez nie, jest swoistym kryterium podsumowujacym wszystkie dzialania podjete wczesniej w jego ramach. Nie bez przyczyny na szczycie piramidy DuPonta znajduje sie wlasnie miernik rentownosci i nie bez przyczyny jest to miernik korzysci, jakie przedsiebiorstwo przynosi swoim wlascicielom (ROE). Przedsiebiorstwa dzialaja przeciez przede wszystkim po to, by to im przynosic maksymalnie wysokie (finansowe) korzysci. Ze struktury modelu DuPonta wyraznie wynika, ze rentownosc wlascicielskiego kapitalu zainwestowanego w przedsiebiorstwo jest "zbiorczym" wynikiem, na ktory wplyw maja zarowno poziom zadluzenia przedsiebiorstwa, jak i jego aktywnosc oraz plynnosc...>>
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