Problematic issues of determining the parties of relations of venture investment into innovation activities

2021 ◽  
pp. 104-111
Author(s):  
Yurii Zhornokui

Problem setting. Nowadays, given that public relations, as a rule, are ahead of the development of legislation that does not have time to adapt and modernize to new economic relationships, such relations do not receive adequate legal provision. Relations on venture investment into innovation activities are no exception. It is related both to the lack of a mechanism for legal provision, as well as scientific and practical best practice of its basic categories, one of which is the parties of the relevant legal relations. Analysis of recent researches and publications. The current state of the research on the selected issues indicates the imperfection of the current legislation and the lack of legal doctrine in the context of determining the parties of relations of venture investment into innovation activities. The doctrinal works of domestic and foreign experts, although contain analysis and reasoned conclusions about the participants of innovation relations, but do not provide unambiguous answer to the question on their parties. Target of research. The purpose of the research is to outline the parties of relations of venture investment into innovation activities. Article’s main body. The venture capital market is represented by two sectors: formal (venture funds) and informal (individual investors). Studying the essence and specifics of venture entrepreneurship is due to the fact that different countries have their own specifics of its implementation, and, accordingly, different parties of the relevant relations. It is mainly applied to organizational and legal forms of legal entities. At the same time, the implementation of corporate venture investments provides a significant number of new opportunities for a corporations, related to the reduction of costs for the purchase of new technologies, reduction of risks from the development of technologies, etc. The parties of venture investment into innovation activities can be represented by institutional investors, which should be understood as financial institutions that attract a large number of investors to combine them into a single money pool with the subsequent placement at the securities market and (or) investing into real estate. Thus, one can distinguish two groups of institutional investors depending on the subject matter of activity: universal investors (commercial banks, professional participants of securities market) and specialized investors (venture funds, incorporated investment funds, asset management companies, private pension funds). Conclusions and prospects for the development. There is currently no clear definition of organizational and legal forms of venture funds, because they are created as legal entities (corporate funds) or a set of assets (share funds) according to the current legislation. Venture funds should be created and should operate exclusively as legal entities – corporate investment funds. It provides certain guarantees to their individual investors, since the legislator establishes special conditions for the participation of individuals in venture funds. Organizational and legal forms of legal entities in the field of venture entrepreneurship should be a joint stock company or a limited liability company. The entities of venture investment into innovation activities are: 1) entities that bring the object of intellectual property to the status of an innovative product; and 2) entities that implement innovations and / or produce innovative products.

2003 ◽  
pp. 95-101
Author(s):  
O. Khmyz

Acording to the author's opinion, institutional investors (from many participants of the capital market) play the main role, especially investment funds. They supply to small-sized investors special investment services, which allow them to participate in the investment process. However excessive institutialization and increasing number of hedge-funds may lead to financial crisis.


2016 ◽  
Vol 12 (4) ◽  
pp. 422-444 ◽  
Author(s):  
Priyantha Mudalige ◽  
Petko S Kalev ◽  
Huu Nhan Duong

Purpose – The purpose of this paper is to investigate the immediate impact of firm-specific announcements on the trading volume of individual and institutional investors on the Australian Securities Exchange (ASX), during a period when the market becomes fragmented. Design/methodology/approach – This study uses intraday trading volume data in five-minute intervals prior to and after firm-specific announcements to measure individual and institutional abnormal volume. There are 70 such intervals per trading day and 254 trading days in the sample period. The first 10 minutes of trading (from 10.00 to 10.10 a.m.) is excluded to avoid the effect of opening auction and to ensure consistency in the “starting time” for all stocks. The volume transacted during five-minute intervals is aggregated and attributed to individual or institutional investors using Broker IDs. Findings – Institutional investors exhibit abnormal trading volume before and after announcements. However, individual investors indicate abnormal trading volume only after announcements. Consistent with outcomes expected from a dividend washing strategy, abnormal trading volume around dividend announcements is statistically insignificant. Both individual and institutional investors’ buy volumes are higher than sell volumes before and after scheduled and unscheduled announcements. Research limitations/implications – The study is Australian focused, but the results are applicable to other limit order book markets of similar design. Practical implications – The results add to the understanding of individual and institutional investors’ trading behaviour around firm-specific announcements in a securities market with continuous disclosure. Social implications – The results add to the understanding of individual and institutional investors’ trading behaviour around firm-specific announcements in a securities market with continuous disclosure. Originality/value – These results will help regulators to design markets that are less predatory on individual investors.


2020 ◽  
pp. 68-72
Author(s):  
Igor Borysov

Relevance of the problem. Economic (financial) dependence of legal entities today is manifested either in the control of their activities by another person so that they take into account its interests and will [1], or in the form of participation in the statutory fund and/or management of the legal entity. However, the lack of comprehensive and systematic research on the problems of dependence of economic entities does not allow to properly assess the compliance of those methods that are regulated by law and implemented in practice, turning an independent legal entity into a dependent. In addition, there are other types of dependencies that need to be studied, in particular, the dependence that arises when creating mutual investment institutions. Target of research. To analyze the current legislation on those methods (techniques) of legal regulation that are used in the creation of mutual investment institutions – corporate investment and mutual investment funds, creating a special relationship of interdependence between these institutions and asset management companies, in order to assess their compliance (sufficiency). Analysis of recent researches and publications. In the domestic scientific literature, the problem of dependence of legal entities has been studied by such scientists as V. I. Borisova [1], E. M. Dyadyuk [2], K. A. Karchevsky [3], Ya. V. Klimenko [4], from foreign – O. G. Sergeev [5], V. V. Tikhonov [6] and other scientists. At the same time, as already mentioned, a comprehensive, systematic study of the problems of dependence of economic entities of various types and forms, in particular, holdings, subsidiaries, as well as the application of these institutions in practice, has not been conducted in domestic science. There are no studies and relationships of dependence in the creation of collective investment institutions. In view of this, the study of problems of essential understanding of the relationship of dependence that arise when creating such intermediaries in the financial services market as mutual investment institutions. Article’s main body. The author investigates the essence of dependence relations arising in the creation of joint investment institutions – corporate investment funds and mutual investment funds in comparison with the dependence relations of business entities. Conclusions and prospects for the development. The concept of «dependence» in domestic law is not generalizing, because to characterize economic (financial) dependence, along with it, other concepts are used, in particular, «affiliate», «related person», «associates» and so on. In addition, the methods (techniques) of legal regulation used in the creation of mutual investment institutions – corporate investment and mutual funds, create a special relationship of interdependence between the CIF, which is a legal entity, and AMC, as well as between the mutual fund, who is not a legal entity is recognized as a quasi-subject that has incomplete (partial) legal personality, acts in economic turnover separately from other entities using corporate mechanisms of capital formation from the issuance of securities, and has a property separation from the AMC, which performs management functions about him.


Author(s):  
A. Shevchenko ◽  
R. Zadorozhna ◽  
M. Tkachenko

One of the important contemporary problems is to provide sustainable economic growth by attracting investment capital to all sectors of the national economy. According to world experience, the main role in this process belongs to the securities market. It is an important tool for the development of the national economy, as it promotes the redistribution of capital between its spheres and industries. Institutional investors as professional financial intermediaries play a decisive role in the mechanism of capital flows allocation. Collective investment institutes are large-scale financial institutions that accumulate significant amounts and manage them. The article investigates the role and importance of institutional investors as a special type of financial intermediaries in the Ukrainian financial market. Institutional investors are professional participants of the stock market and financial intermediaries between citizen’s savings and the investment needs of the domestic economy. Their mission is to promote the more effective realization of the function of transforming savings into investments. Significant amounts of free cash owned by small investors and the large needs of a real sector of the economy in free investment resources require the search for effective means of fundraising from small owners to collective investment institutions. The importance of institutional investors activity is great since they are the leading suppliers of investment resources in the country’s economy and determine the level of its economic development. The trends and results of Ukrainian institutional investors activity over the last five years is investigated in the article. From the quantitative side, the collective investment institutions are the dominant kind of institutional investors in Ukraine, and their number is constantly increasing. For the beginning of 2018, 292 asset management companies, 235 collective investment institutions, 58 non-state pension funds and 3 insurance companies with assets in AMC management were registered in Ukraine. We can see the largest increase in the value of assets in non-diversified investment funds – 146.3%. At the same time, mutual funds increased on 23.8%. However, this is not enough for the Ukrainian stock market. A small number of derivatives in circulation and low liquidity of securities restrict the activity of domestic collective investment institutes. The critical analysis of the long-term working practices of Private joint stock company «KINTO» is performed. PJSC «KINTO» is one of the most successful asset management companies on the domestic securities market. Currently, PJSC «KINTO» is an investment manager of twelve investment funds and one non-state pension fund. Asshown by analysis, the final financial results of the collective investment institutes (CII) depend on the choice of investment strategies. The features of the use of various investment strategies by CII at the stock market are investigated. It is proved that the passive-active strategy using is the most effective because of maximizing income while minimizing risks in the medium and long-term. To achieve this aim, the majority of investment funds of AMC «KINTO» forms a diversified investment portfolio based on the securities of the most investment-attractive companies of the real sector of the economy, belong to the «blue chips» of the domestic stock market. Also, the company «KINTO» uses all advantages of collective investments by applying both different trading platforms and investment instruments (instruments of stock, bond and money markets). Key words: institutional investors, net asset value, closed-end non-diversified corporate investment fund, interval diversified unit investment fund.


2021 ◽  
Vol 10 (1-2) ◽  
pp. 29-46
Author(s):  
Valentina I. Borisova ◽  
Igor V. Borisov ◽  
Farkhad S. Karagussov

Abstract Financial institutions are the centre of economic and legal interests of participants of the financial services market, which is itself characterised by a high level of conflict of interests of its participants. The purpose of the article is the scientific development of the legal structure of organisational and legal forms of financial institutions, in the market of financial services, as a legal mechanism for reconciling the economic and legal interests of the main participants of this market. The features of basic and modified legal forms of legal entities are elaborated in this article. It is determined that financial institutions are established and operate in ‘modified’ legal forms. Such forms emerge due to the supplementation of the structure of the main elements of the basic legal forms of legal entities. This refers to additional functional legal means that reflect special requirements for the relevant types of legal entities, depending on the economic and legal interests of their founders/participants.


Author(s):  
Helen Campbell Pickford

The adoption of the Economics of Mutuality will depend on institutional investors promoting it through active engaged investing. Chapter 18 describes how some investment funds are taking an active role in managing the companies in which they are invested. It involves them acquiring significant blocks of shares that are held for extended periods of time and managed directly by asset owners themselves instead of by intermediary asset managers. Critical to this is the way in which the performance of their investments is monitored and measured. Alongside measuring financial performance over longer periods of time than is conventionally the case, performance needs to be assessed in relation to other indicators of performance related to human, social, and natural capital.


Author(s):  
O.I. Zozuliak

The article is devoted to the theoretical and legal analysis of issues related to the range of problems connected with development of such legal model as ‘nonentrepreneurial legal entity’. In the scientific work the author makes an analysis of those concepts which are submitted by the leading Ukrainian scholars and concern the formation of civil-law terminology in general and that is applied to the nonentrepreneurial legal entities, in particular. The author has concluded that it is expedient to apply the set of criteria during formation of the non-entrepreneurial legal entity. The article gives the definition of non-entrepreneurial legal entity in the narrow and broad meanings. It is proved that a non-business entity should be singled out as a separate category according to the non-distribution of profit (income) rather than to the specifics of its business activity. The author demonstrates the feasibility to change classification criteria and levels while classifying the legal entities and on the mentioned ground she has singled out: 1) procedure for establishment of the legal entity; 2) structure of the legal entity as a criterion of the second classification level; 3) specific character of the profit distribution as a criterion of the third level of classification. It is based on the argument that non-business entities are an independent group of the legal entities, which is divided into subgroups: the non-business entities of corporate type and the non-business entities of unitary type. Each subgroup of the non-business legal entity distinguishes several legal forms within of which specific types of non-business entities are allocated. The author presents one’s own definition of the non-entrepreneurial legal entity, as a legal entity of public or private law, whether of corporate or unitary type, which is specially established in the different areas of social life and endowed with a special legal capacity. The non-entrepreneurial legal entity shall be entitled to carry out activities with a view to profit but it doesn’t distribute it among participants (members).


2019 ◽  
Vol 11 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Aliya Zahera ◽  
Rohit Bansal

Purpose The purpose of this paper is to study the disposition effect that is exhibited by the investors through the review of research articles in the area of behavioral finance. When the investors are hesitant to realize the losses and quick to realize the gains, this phenomenon is known as the disposition effect. This paper explains various theories, which have been evolved over the years that has explained the phenomenon of disposition effect. It includes the behavior of individual investors, institutional investors and mutual fund managers. Design/methodology/approach The authors have used the existing literatures from the various authors, who have studied the disposition effect in either real market or the experimental market. This paper includes literature over a period of 40 years, that is, Dyl, 1977, in the form of tax loss selling, to the most recent paper, Surya et al. (2017). Some authors have used the PGR-PLR ratio for calculating the disposition effect in their study. However, some authors have used t-test, ANNOVA, Correlation coefficient, Standard deviation, Regression, etc., as a tool to find the presence of disposition effect. Findings The effect of disposition can be changed for different types of individual investors, institutional investors and mutual funds. The individual investors are largely prone to the disposition effect and the demographic variables like age, gender, experience, investor sophistication also impact the occurrence of the disposition effect. On the other side, the institutional investors and mutual funds managers may or may not be affected by the disposition effect. Practical implications The skilled understanding of the disposition effect will help the investors, financial institutions and policy-makers to reduce the adverse effect of this bias in the stock market. This paper contributes a detailed explanation of disposition effect and its impacts on the investors. The study of disposition effect has been found to be insufficient in the context of Indian capital market. Social implications The investors and society at large can gains insights about causes and influences of disposition effect which will be helpful to create sound investment decisions. Originality/value This paper has complied the 11 causes for the occurrence of disposition effect that are found by the different authors. The paper also highlights the impact of the disposition effect in the decision-making of various investors.


2019 ◽  
Vol 27 (3) ◽  
pp. 329-364
Author(s):  
Kyoim Lee

This study investigates domestic individual, institutional and foreign investors’ trading, to test Hong and Stein (1999)’s behavioral explanation that momentum profit is generated as some uninformed investors underreact to information on medium-term prices. Using Hvidkjaer (2006)’s methodology, we examine the respective investors’ trading tendencies reflected in their active price-setting orders. We analyze a special database compiling details on every transaction for the stocks listed on the KSE during 1996:12~2009:08. During 2001~2007, individual investors’ underreaction in trading large-size winner stocks contributes to positive momentum profits. They seem to induce weak negative profits to emerge in 1997~2000, too. Foreign investors underreact to small-size loser stocks, incurring positive momentum profits during 2001~2007. They engage in positive feedback trading, when they trade large-size winner stocks. This trading tendency does not seem to be based on information on firm fundamentals, as we find those winner stocks’ returns are not sustained. Institutional investors’ trading seems to be relatively in line with future returns, but evidences are not strong enough to support they are informed investors. Overall, the behavioral hypothesis on investors’ underreaction seems to explain medium-term momentum profits in Korea, but evidences differing across subsamples suggest possibility of other unknown influences.


2017 ◽  
Vol 43 (5) ◽  
pp. 567-594 ◽  
Author(s):  
Kyung Soon Kim ◽  
Jinwoo Park ◽  
Yun W. Park

Purpose The purpose of this paper is to investigate whether there is any difference across individual investors, domestic and foreign institutional investors in trading volume responses to analyst reports. The authors also examine the determinants of trading volume responses using firm as well as forecast characteristics. Design/methodology/approach The authors use trading data from the Korean equity market. The authors divide investors into three classes of investors; namely, individual investors, domestic institutional investors, and foreign institutional investors. The authors then examine whether the trading responses to analyst reports vary across investor types, and how firm characteristics and characteristics of analyst reports influence the trading activities on the release dates across investor types. Findings Individual investors are the most responsive investor group, being responsive to analyst reports on small, neglected firms with large inside ownership as well as to analyst reports with optimistic forecasts. Domestic institutional investors are responsive to reports on neglected firms with high return volatility while foreign institutional investors show least responses. Originality/value There are few studies that investigate whether the trading responses to analyst reports vary across investor types and how firm characteristics and characteristics of analyst reports influence the trading activities on the release dates across investor types. Taking advantage of the trading volume data for the three main investor types in the Korean stock market, the authors study the trading volume responses for each investor type and make comparisons across investor types.


Sign in / Sign up

Export Citation Format

Share Document