Diversification of the economy of Kazakhstan as a priority of industrial development in post-pandemic conditions

The purpose of the scientific article is to substantiate the expediency of the diversification of the industrial sphere to ensure the economic growth of Kazakhstan in post-pandemic conditions. In this work, the following methods were used: synthesis, integrated assessment, analysis, consistency, logical generalization. The state of economic development of the republic in the conditions of a pandemic is shown. Substained the necessity of continuing modernization and intensification of the diversification process in post-pandemic conditions. Analyzed the development of industrial production over the 30 years of independence of the republic, where the mining sector takes priority. The essential role of the share of mechanical engineering in the structure of the manufacturing industry is determined. Significant measures of state support have been identified, which activate the course of diversification of the real sector of the national economy. Summarized the main problems of diversification of the industrial sphere of Kazakhstan. They include a low degree of digitalization and automation, technological conversion and qualified personnel. Forecasts and recommendations for the effective implementation of industry diversification in the postpandemic period are given. Important proposals here are to optimize the spending of the National Fund, to create the same economic activity regime for business and state-owned companies, to promote the principles of healthy competition and labor productivity growth.

Evolution of industrial diversification and its determinants in West Germany: Evidence from population data of enterprises

Germany is among the largest countries in the world in terms of total GDP, owing largely to rapid industrialization and expansion of economic activities into several sectors. This paper contributes to the literature on German economic development by investigating the evolution of industry diversification in Germany; particularly focusing on the recent concepts of related (RV) and unrelated variety (UV) in West German regions. It also identifies the statistical and economic determinants of variation in variety over time. Among several industry structure measures; RV is the only measure that reveals a pronounced increasing trend. Since RV is composed of two parts: 1) entropy at five-digit within a two-digit classification, and 2) shares of two-digit sectors in total output, we examined which of the two components dominate. Our findings suggest that the entropy component within two-digit sectoral shares of the RV index is more dominant than the two-digit sectoral shares themselves. We further examined entries and exits of the firms among regions with top and bottom rankings in RV. Findings suggest that both the top and bottom regions experienced an increase in the total number of industries, however, exits were much less pronounced in the bottom regions. It suggests that an increase in variety among top regions is the result of the creative destruction type effect where new industries force inefficient old industries to leave the region. Finally, analysis shows support for the inverse u-shaped relationship between development and diversification.

Synthesis of stable coalitions in the economy based on fundamental criteria of the portfolio theory

Subject. The article outlines basic principles of a mathematical model for formation of stable coalitions in the economy at the interstate level. Objectives. We focus on developing a mathematical model to build such coalitions. Methods. The study employs the portfolio theory, risk-return model, correlation and regression analysis, technical and fundamental analysis. The proposed model rests on fundamental provisions of creating a multicomponent, widely diversified investment portfolio. The model uses the key concepts, like expected profitability, risk level, industry diversification and hedging, in combination with the synthesis of a diversified group of leading commodity indices. Results. We show possibilities of using internal (based on the country’s indices) and external (based on other countries’ indices) correlation analysis, according to data on trends in economic indices, to ensure sectoral diversification within the country and maximize the international level of sectoral diversification, respectively. We performed a fundamental analysis of the condition of economies of the countries included in the coalition, and of the countries, which are considered to be included in the coalition as appropriate. The paper assesses positive and negative factors of joint functioning of the economies of the coalition countries, from the point of view of their geographic location. Conclusions. The model makes it possible to build new optimal coalitions in the economy, to analyze the practicability of further existence of previously formed coalitions, and to update the composition of coalitions, according to trends in the world economy development.

Determints of CEO Bonus Compensation

The primary purpose of this study is to explore the determinants of CEO bonus compensation: to examine CEO bonuses and to explore whether or not the independent variables are associated with CEO bonus compensation. For the purposes of this study, a sample of 2,448 CEO bonus compensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses. The dependent variable in this model is the CEO bonus compensation. Bonus is the dollar value of the bonus (cash and non-cash) earned by the named executive officer during the fiscal year. Corporate diversification was divided into two categories; international diversification and industry diversification. Firm performance is measured by both Market-based, Performance (RET) and Accounting-based, Performance (ACE). The results show that the higher the degree of international diversification, and the higher accounting earnings performance, the more CEOs receive in bonuses. In addition, this study found that international diversification is associated with a greater use of bonuses and with a greater reliance on accounting-based, rather than market-based measures of firm performance. The results also demonstrated that CEOs in firms with more investment opportunities will receive higher bonuses than CEOs in firms with fewer investment opportunities and CEOs in larger firms will receive higher bonuses than CEOs in smaller firms.

Effect of Net Profit Margin and Company Size on Risk Disclosure

Net Profit Margin is part of the profitability ratio, which is a ratio to assess the company's ability to seek profit. Company size is a value that shows the size of the company. Both of these factors have a relationship with risk disclosure. This study aims to determine the Net Profit Margin, Company Size, Risk Disclosure, and the effect of Net Profit Margin and Company Size on Risk Disclosure in Property and Real Estate Companies. Registered with the ISSI 2016-2018 period. This study uses a quantitative approach. The data used is secondary data, analyzed using correlation analysis and multiple linear regression. The sample in this study amounted to 84 annual financial reports. The results showed that Net Profit Margin, Company Size, and Risk Disclosure were in the poor, suitable, and adequate categories, respectively. The partial calculation results show that the Net Profit Margin has no effect on Risk Disclosure, but Company Size affects Risk Disclosure. Meanwhile, the simultaneous calculation results show that Net Profit Margin and Company Size have a significant effect on Risk Disclosure with a value of 13.6%, while other factors explain the remaining 86.4% outside of this study, such as the ratio leverage, liquidity ratios, and product or industry diversification.

About the project approach to diversification management of defense industry enterprises

The diversified growth strategy is one of four reference strategies that have been actively pursued by companies operating in open markets since the middle of the last century. Today, this task at the state level has been set for defense enterprises, where the production process is fundamentally different from civilian production. The article discusses the directions of the defense industry diversification. The author's approach to the classification of strategies for diversified growth in relation to the defense industry enterprises is proposed. A review of regulatory legal acts on the use of the term "Defense industry enterprises diversification" is carried out; the author's interpretation of the definition is given. Current problems of the production of high-tech civilian and dual-use products by enterprises of the Sverdlovsk region are considered; the project approach to diversification management is proposed.

Equity crowdfunding: Determinants of company’s success on a crowdfunding platform

Equity crowdfunding, a form of company financing through equity investments, has become increasingly relevant in recent years. This paper analyzes the advantages of this financing mechanism, the motives of issuers and investors — participants of the crowdinvesting process. Most participants of investing are non-professional investors, for whom recommendations for choosing companies on the platform based on the determinants of investment attractiveness are of practical value. The authors conducted an empirical study to establish the relationship between investment attractiveness and the characteristics of issuing companies emerging on the crowdfunding platforms. The study sample includes 299 companies that raised equity capital on one of the leading platforms in the UK, Crowdcube, between 2011 and 2020. The results of the study showed that the investment attractiveness of companies is higher if during placement they offer a larger share proportion of non-voting than voting shares during the placement. Companies in which managers own a share in capital, firms with registered patents as an indicator of their innovative activity, and companies that do not demonstrate industry diversification have a higher attractiveness for investors. This research contributes to the existing studies of determinants of the success of equity crowdfunding, provides recommendations to investors on the choice of companies with particular characteristics that determine the investment attractiveness of issuers on crowdfunding platforms.