scholarly journals Investment-Timing and the Threat of Disruption

2021 ◽  
Author(s):  
◽  
Ryan John Campbell
Keyword(s):  
Firm Value ◽  
Consumer Preferences ◽  
Disruptive Technology ◽  
Competition Effect ◽  
Investment Opportunity ◽  
Investment Timing ◽  
Market Participants ◽  
Incumbent Firm ◽  
Growth Option ◽  
Independent Firm

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity.  In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant.  In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

scholarly journals Investment-Timing and the Threat of Disruption

2021 ◽  
Author(s):  
◽  
Ryan John Campbell
Keyword(s):  
Firm Value ◽  
Consumer Preferences ◽  
Disruptive Technology ◽  
Competition Effect ◽  
Investment Opportunity ◽  
Investment Timing ◽  
Market Participants ◽  
Incumbent Firm ◽  
Growth Option ◽  
Independent Firm

<p>An incumbent firm needs to determine how to best manage the risk of the arrival of a disruptive technology. The numerous actions available to the incumbent firm indicates a complex real-options model of investment is required. This thesis investigates the behaviour of an incumbent firm, with assets-in-place, when they have access to an investment opportunity. The incumbent must not only choose when to invest in the opportunity, but also the optimal structure with which to compete against a new entrant who also has this investment opportunity.  In order to delay competition in the market the incumbent can elect to permanently abandon the innovative option rather than seek to compete with the new entrant. The assets-in-place contributes significant value to the incumbent and by delaying the competition effect, the incumbent can reduce the cannibalization of assets-in-place. This is despite the fact that the incumbent can attempt to profitably invest in the innovation before the entrant. Clearly the assets-in-place provide a benefit to firm value for the incumbent, but act as a burden for the growth option’s development. Should consumer preferences begin to favour the innovation, then the decision to abandon the growth option loses its value. The incumbent in this instance does not care that they may accelerate the entrant’s investment as they can still profitably preempt the entrant.  In a competitive market, when the incumbent efficiently produces the innovation at no extra cost compared to an independent firm, the incumbent will elect to internalise, rather than spin off, the growth option. When the incumbent produces the innovation at a higher cost, than other market participants, they will spin off the growth option instead of internalising. When consumers favour the innovation, the incumbent becomes indifferent between spinning off and internalising the growth option as the objective functions in both cases converge to maximising the value of the growth option.</p>

scholarly journals PERAN INVESTMENT OPPORTUNITY SET SEBAGAI PEMODERASI PENGARUH KINERJA KEUANGAN, GOODCORPORATE GOVERNANCE DAN CORPORATE SOCIAL RESPONSIBILITY TERHADAP NILAI PERUSAHAAN

2019 ◽  
Vol 4 (2) ◽  
pp. 85
Author(s):  
Michael Anderson Sianipar ◽  
Susi Dwi Mulyani
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Firm Value ◽  
Good Governance ◽  
Stock Exchange ◽  
Investment Opportunity ◽  
Good Corporate Governance ◽  
Investment Opportunity Set ◽  
Corporate Social ◽  
Positive Effect

<em>Firm Values of manufacturing company in Indonesia is influenced by various factors of financial and non-financial that can be measured using financial ratios, good governance, and social responsibility practices in the company. The purpose of this study was to analyze the effect of financial performance proxied by Profitability and Solvability, Good Corporate Governance (GCG), and Corporate Social Responsibility (CSR) on the firm value,with Investment Opportunity set (IOS) as a moderating variable. The firm value in this study was proxied by Tobins’q.The population of this research is manufacturing companywith chemical industry subsectors listed in the Indonesia Stock Exchange (BEI) in 2013-2015. The sampling method used is purposive sampling and acquired 31 companies in this sample. The analytical method used is moderating regression analysis.Based on the results of hypotheses testing, there wasSolvability and IOS had positive effect on firm value, while Profitability, GCG, and CSR had no effect on the firm value. The use of a moderating variable Investment Opportunity Set (IOS) is not able to strengthen the influence of profitability, solvability, GCG and CSR on the firm value.</em>

scholarly journals Influence of Profitability, Investment Opportunity Set (Ios) Leverage and Dividend Policy on Firm Value in The L Service in Indonesia Stock Exchange

2017 ◽  
Vol 3 (2) ◽  
pp. 235
Author(s):  
Khuzaini Khuzaini ◽  
Dwi Wahyu Artiningsih ◽  
Lina Paulina
Keyword(s):  
Significant Influence ◽  
Firm Value ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Investment Opportunity ◽  
Industrial Services ◽  
Investment Opportunity Set

<p>This research was aimed to analyze the significant influence of profitability, investment opportunity set (ios), leverage and dividend policy partially or simultaneously on firm value. The sample used in this research was Industrial Services in Indonesia Stock Exchange period 2013 to 2015 as many as 28 companies taken by using purposive sampling technique. Hypothesis testing of research using multiple linear regression analysis by SPSS 21 for windows programs. This research found that: (1) profitability has significant influence partially  on firm value; (2) investment opportunity set (ios) has significant influence partially  on firm value; (3) leverage has no significant influence partially  on firm value; (3) the dividend policy has no significant influence partially  on firm value; (5) profitability, investment opportunity set (ios), leverage and dividend policy have significant influence simultaneously on firm value with influence value of 46.7%.</p>

scholarly journals Investigating Paradigm Shift from Price to Value in the Air Cargo Market

2020 ◽  
Vol 12 (23) ◽  
pp. 10202
Author(s):  
Jong Hae Choi ◽  
Yong Hwa Park
Keyword(s):  
Economic Growth ◽  
Paradigm Shift ◽  
Consumer Preferences ◽  
Granger Causality Test ◽  
Air Transport ◽  
Aviation Industry ◽  
Air Cargo ◽  
Causality Test ◽  
Market Participants ◽  
Main Growth

This study presents a paradigm shift in the air cargo market based on Korea and Incheon Airport’s empirical data. The air cargo market has traditionally handled expensive items and has been a supplier-oriented market. There has been little room for individual customers in this market. However, “value” gradually replaces “price” in this market. The value depending on consumer preferences significantly impact air cargo demand. Consequently, items transported by air cargo are changing, and airlines and other market participants are revising operation policy. Economic growth may be losing its dominant power as the main growth engine in the air cargo market. This study identifies the weakened link between air cargo increase and economic growth based on the Granger causality test. COVID-19 calls for a deeper understanding of the paradigm shift in the market for sustainable air transport because COVID-19 will further stimulate it. In this regard, the air cargo business, which maintains a stable trend even during COVID-19, is seen as a new opportunity for the aviation industry. Since sustainable air transport requires an accurate understanding of the paradigm shift in the air cargo market, this study enhances our knowledge of the paradigm shift and provides significant implications for sustainable air transport.

Revenue Manipulation and Restatements by Loss Firms

2008 ◽  
Vol 27 (2) ◽  
pp. 1-29 ◽  
Author(s):  
Jeffrey L. Callen ◽  
Sean W. G. Robb ◽  
Dan Segal
Keyword(s):  
Firm Value ◽  
Cash Flows ◽  
Positive Relation ◽  
Credit Policy ◽  
Accounts Receivable ◽  
Market Participants ◽  
Ex Ante ◽  
Value Loss ◽  
History Of ◽  
Loss Firms

SUMMARY: This paper investigates the relation between the extent of a firm’s past and expected future losses or negative cash flows and the ex ante probability that it will manipulate revenues. When a firm has a string of losses or negative cash flows, traditional valuation models do not yield reliable estimates of firm value, and traditional price-earnings ratios are not meaningful. Evidence suggests that market participants tend to value loss firms on the basis of the level and growth in revenues, rather than cash flows and earnings, thereby motivating these firms to overstate revenue. In fact, empirical results indicate that there is a positive relation between the number of years that firms exhibit and/or anticipate losses or negative cash flows and investment in receivables after controlling for credit policy. We further show that the ex ante likelihood that firms manipulate revenue in violation of GAAP is positively associated with the history of past and expected future losses or negative cash flows, as well as with the investment in accounts receivable (adjusted for credit policy). Our results suggest another indicator of manipulation that may be used by auditors and regulators in identifying firms that are more likely to overstate revenues.

scholarly journals Missed Opportunities: Optimal Investment Timing When Information is Costly

2007 ◽  
Vol 42 (2) ◽  
pp. 467-488 ◽  
Author(s):  
Graeme Guthrie
Keyword(s):  
Real World ◽  
Real Option ◽  
Optimal Investment ◽  
Investment Opportunity ◽  
Missed Opportunities ◽  
Investment Timing ◽  
Real Option Analysis ◽  
Amount Of Information ◽  
Optimal Delay

AbstractReal option analysis typically assumes that projects are continuously evaluated and launched at precisely the time determined to be optimal, but real world projects cannot be managed in this way because of the costs of formally evaluating an investment opportunity. This paper shows that immediate investment is more attractive if evaluation costs are high or the amount of information to be revealed by an evaluation is large. The optimal delay until a reevaluation is long if evaluation costs are high or the amount of information to be revealed by an evaluation is small. The reduction in the value of project rights is especially severe when the value of the completed project is strongly mean reverting because then precision in investment timing is particularly important.

scholarly journals PENGARUH KEBIJAKAN HUTANG, KEBIJAKAN DIVIDEN, PROFITABILITAS, PERTUMBUHAN PENJUALAN DAN KESEMPATAN INVESTASI TERHADAP NILAI PERUSAHAAN DENGAN UKURAN PERUSAHAAN SEBAGAI VARIABEL MODERASI

2019 ◽  
Vol 6 (2) ◽  
pp. 201
Author(s):  
Vivi Apriliyanti ◽  
Hermi Hermi ◽  
Vinola Herawaty
Keyword(s):  
Firm Size ◽  
Firm Value ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Sales Growth ◽  
Manufacturing Companies ◽  
Investment Opportunity ◽  
Investment Opportunity Set ◽  
Debt Policy ◽  
Positive Effect

<p class="Default" align="center"><strong><em>Abstract</em></strong><em></em></p><p class="Default"><em>The purpose of this study was to examine the influence of debt policy, dividend policy,profitability, sales growth and investment opportunity set on firm value with firm size as moderating variable in the manufacturing companies on the Indonesia Stock Exchange (IDX). The population used in this study is a company that is listed on the Indonesia Stock Exchange. The sample used in this study 128 companies with an observation period of 3 (three) years from 2016 to 2018. The method of determining the sample used in this study was the purposive sampling method. The data processing method used in this study is the causality test with multiple regression analysis using SPSS version 23. The independent variables in this study are Debt Policy, Dividend Policy, Profitability, Sales Growth and Investment Opportunity. The moderating variable in this study is Company Size. The dependent variable in this study is firm value. The results of this study indicate that Debt Policy has a positive effect on Firm’s Value, Dividend Policy does not effect on Firm Value, Profitability does not have a positive effect on Firm’s Value, Sales Growth does not effect on Firm’s Value, Investment Opportunity Set does not effect on Firm’s Value, Firm Size does not have a positive effect on Firm’s Value, Firm Size does not strengthen the realtionship between Debt Policy with Firm’s Value, Firm Size does not strengthen the realtionship between Dividend Policy with Firm’s Value, Firm Size does not strengthen the realtionship between Profitability with Firm’s Value, Firm Size does not strengthen the realtionship between Sales Growth with Firm’s Value, Firm Size does not strengthen the realtionship between Investment Opportunity Set with Firm’s Value.</em></p>

scholarly journals NILAI PERUSAHAAN: STUDI EMPIRIS FAKTOR-FAKTOR YANG MEMPENGARUHI

Media Bisnis ◽  
2021 ◽  
Vol 13 (1) ◽  
pp. 39-46
Author(s):  
ARWINA KARMUDIANDRI ◽  
MERRY ADITA CHANDRA
Keyword(s):  
Firm Size ◽  
Firm Value ◽  
Sampling Method ◽  
Stock Exchange ◽  
Regression Method ◽  
Managerial Ownership ◽  
Investment Opportunity ◽  
Financial Leverage ◽  
Factors Influencing ◽  
Multiple Regression Method

The purpose of this research is to analyze factors influencing firm value. The independen variable are investment opportunity, dividen policy, managerial ownership, financial leverage, profitability, firm size, board of indepedent commissioner, audit comittee. Population of this research is non-financial companies which are listed in Indonesia Stock Exchange from 2015 to 2017. The sample of this research are selected by using purposive sampling method, and 198 datas are taken. Data were analyzed using multiple regression method. The result of this research shows that financial leverage, profitability and board of independent commissioner have influence to firm value, whereas investment opportunity, dividen policy managerial ownership, firm size and audit comittee do not have influence to firm value.

scholarly journals Assets Growth, Earnings Persistence, Investment Opportunity Setand Earnings Management on Dividend Policy and Firm Value (Study at Bank Companies in Indonesia)

2021 ◽  
Vol 56 (2) ◽  
pp. 220-234
Author(s):  
Indrayati ◽  
Basuki Rachmat ◽  
Slamet
Keyword(s):  
Earnings Management ◽  
Firm Value ◽  
Earning Management ◽  
Significant Positive Effect ◽  
Investment Opportunity ◽  
Insignificant Effect ◽  
Investment Opportunity Set ◽  
Negative Effect ◽  
Asset Growth ◽  
Positive Effect

The purpose of this study was to test the effect empirically the influence of growth and earnings management on dividend payment policies and company value in as many as 40 banking companies listed on the Indonesian stock exchange in 2015-2019. The research method is explanatory research with secondary data, based on documentation data, data processing using the Structural Equation Model test. The results showed that asset growth had a negative and insignificant effect on dividends, persistence had no significant negative effect on dividends, investment opportunity set had a significant positive effect on dividends, earning management had a positive and insignificant effect on dividends, asset growth had no significant negative effect on the value company, dividends had a significant positive effect on firm value. Persistence has no significant positive effect on firm value. Investment opportunity set has a positive and insignificant effect on firm value, and earning management had a significant positive effect on firm value.

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