An Advised Indirect-Utility Ranking of Opportunity Sets

There is a substantial strand of literature about ranking the subsets of a set of alternatives, usually referred to as opportunity sets. We investigate a model that is dependent on the preference of a grand set of alternatives. In this framework, the indirect-utility criterion ranks the opportunity sets by the following rule: a subset A is weakly preferred to another subset B if and only if A contains at least one preference maximizing element from A∪B. This criterion leads to the indifference of each subset of alternatives to a singleton; symmetry appears at this stage, as the property holds true for any one of the maximizers in A. Conversely, suppose that a ranking of opportunity sets satisfies the property that each opportunity set is indifferent to a singleton contained within it. Then, we prove that such a ranking must use a generalized form of the indirect-utility criterion, where maximization is applied to a selection of the alternatives. Altogether, these results produce a characterization of the advised indirect-utility criterion for ranking opportunity sets.

Analisis faktor-faktor yang mempengaruhi struktur modal di Bursa Efek Indonesia

Capital structure is a combination of capital and debt so that it is very influential on the company's financial position. To finance operations, companies can use funds from debt or capital. However, the company's management must know whether the company is able to bear the financial risks or costs of these funds to prevent the company's bankruptcy. The purpose of this research is to analyze the factors that influence the capital structure. The independent variables are corporate tax rates, non-debt tax savings, investment opportunity sets, sales growth, and profitability. The sample data tested were obtained from the annual reports of companies listed on the Indonesia Stock Exchange (IDX). The reporting period used in this study was five years and amounted to 2,210. The data obtained were then processed through the SPSS 25 and Eviews 10 systems. The results revealed that corporate tax rates and profitability have a significant negative effect on capital structure. There is a significant positive effect of the investment opportunity set variable and sales growth on the owned capital structure. Another finding is that non-debt tax savings have no significant effect on capital structure.

What Motivates Paternalism? An Experimental Study

We study experimentally when, why, and how people intervene in others’ choices. Choice Architects (CAs) construct opportunity sets containing bundles of time-indexed payments for Choosers. CAs frequently prevent impatient choices despite opportunities to provide advice, believing Choosers benefit. They violate common behavioral welfare criteria by removing impatient options even when all payoffs are delayed. CAs intervene not by removing options they wish they could resist when choosing for themselves (mistakes-projective paternalism), but rather as if they seek to align others’ choices with their own aspirations (ideals-projective paternalism). Laboratory choices predict subjects’ support for actual paternalistic policies. (JEL C92, D12, D15)

Measuring multidimensional investment opportunity sets with 10-K text

We show that firms' investment opportunity sets (IOS) are multidimensional. Analyzing Form 10-K texts, we identify 445 unique keywords that predict firms' future investments during 1995-2009 and combine them into 43 underlying factors. Industry-specific factors include BioPharma, Banking, Information Technology, Oil & Gas and Retail Stores, while more general factors include Equity Intensity, Debt Intensity, Lease, Going Concern and Acquisition. These factors form our multidimensional measures of IOS. They outperform Tobin's Q and/or industry fixed effects, in predicting future out-of-sample (2010-15) investments and related corporate policies, and even inform incrementally over lagged dependent variables. We trace the factors' improved predictive power to their multidimensional nature, which captures IOS-related variation within and between industries, and stability in IOS that allows 10-K texts to be more informative.

Finance and economic evolution

The final chapter of Part II highlights Schumpeter's seminal theory of economic development as a deliberate monetary conception and its genuine account of the nexus between finance and the real economy. Innovation and creative destruction critically depend on the creation and reallocation of purchasing power through finance. The chapter offers a brief reconstruction, which assimilates Schumpeter's further elaborations on selected themes in his later publications along several basic premises, such as open opportunity sets, entrepreneurship and innovation, temporary monopoly profits, or discontinuous change. Furthermore, venture investors must trust the entrepreneurs' vision and provide them with the purchasing power needed to control the means of production in advance. Successful innovations induce imitation and their progressive diffusion annihilates the temporary monopoly surplus, thereby decreasing prices, raising demand and fostering the overall growth of real income. Moreover, innovations do not occur independently, but are clustered, generating overlapping waves of business fluctuations.

THE ROLE OF MANAGERIAL ABILITY IN INDONESIA: INVESTMENT OPPORTUNITY SETS, ENVIRONMENTAL UNCERTAINTY, TAX AVOIDANCE

Purpose of the study: This study aims to obtain empirical evidence of the effect of investment factors that consist of investment opportunity sets and environmental uncertainty on tax avoidance and the role of managerial ability in moderating these effects. Methodology: The analysis was conducted on 49 manufacturing companies listed on the Indonesia Stock Exchange from 2012 to 2018. It was chosen through a purposive sampling method, so 343 observations were obtained. This study engages two-panel data regression models, a model with and without moderation managerial ability. Also, this study employs factor analysis to produce investment opportunity sets that can represent this variable. Main Findings: This study reveals that investment opportunity sets and environmental uncertainty positively affect tax avoidance. Meanwhile, managerial ability failed to moderate the effect of investment opportunity sets and environmental uncertainty on tax avoidance. Implications: The results of the profiling can be used as an early warning, especially for account representatives and tax auditors at the Indonesia Tax Authority, so that potential tax exploration and examination can be more in-depth for firms that fulfill these characteristics. Also, this study provides advice to the Government of Indonesia to provide tax holidays for firms with high IOS who invest in the real sector and tax incentives for firms that are facing an environment with high uncertainty. Novelty: This study deploys managerial ability as a moderating variable between the relationship of investment opportunity sets and environmental uncertainty to tax avoidance. The managerial ability has an important role in firms' IOS and environmental uncertainty faced by the firms because the level of managers will produce differences in the economic outcomes and the effectiveness of the discretion.

Pengaruh Investment Opportunity Set Terhadap Kualitas Laba Dengan Konservatisme Sebagai Variabel Moderating

This study aims to examine the factors that affect earnings quality, namely investment opportunity sets that are moderated by conservatism in manufacturing companies listed on the Indonesia Stock Exchange in 2014-2018. The selection of a sample of 50 companies uses a purposive sampling method. This study uses the MRA (Moderated Regression Analysis) analysis technique for testing moderating variables by comparing the coefficient R² before and after the moderating variable. The results of this study indicate that the investment opportunity set does not significant affect on earnings quality. Conservatism is able to moderate the relationship between investment opportunity set and earnings quality, which is to strengthen the relationship between these variables. This is indicated by an increase in the coefficient value of R².