Does ESG Reporting Relate to Corporate Financial Performance in the Context of the Energy Sector Transformation? Evidence from Poland

This paper aims to investigate whether the environmental, social and corporate governance (ESG) score of companies operating in the energy sector is associated with their corporate financial performance (CFP). The research covered data from eight companies with a dominant position in the Polish energy sector. The research used the comparative analysis between ESG performance and accounting-based measures of profitability: return on equity (ROE), return on assets (ROA) and return on sales (ROS). Additionally, reference was also made to the DuPont model. The acquired results do not reveal repetitive dependencies that would facilitate the discovery of a pattern of the impact of the factors of ESG on the financial performance of enterprises. Despite indicating the cases of correlations between the ESG scores and CFP at a high level, indeed sometimes at a very high level, the particular case studies significantly differ from each other. This may be caused by the fact that Polish enterprises from the energy sector illustrate far-reaching specifics, among others, with regard to the key significance of the entities with a prevalent state ownership and strict administrative regulations, which are subject to the energy market, state of development and structure of the whole sector in Poland. Thus, this is also why the mechanisms or dependencies, whose existence it is possible to expect in conditions of free competition, may be weakened or even eliminated in Polish conditions.

Can market state and market volatility explain time-varying momentum profits in South Africa?

PurposeWhile the momentum anomaly is prevalent in South Africa, few have examined the reasons influencing it. This study examines whether momentum profits vary through time and are affected by the state of the market and market volatility between 1998 and 2019.Design/methodology/approachThe authors consider combinations of portfolio construction, such as the lookback period, weighting scheme, measure of volatility and the volatility window period. They further examine the interaction of momentum with sentiment, default risk and semi-deviation as a measure of risk, as a means of testing whether behavioural factors have significant influence.FindingsThe results generally show that neither volatility nor market state has explanatory power on momentum profits.Originality/valueThese results make the momentum anomaly in South Africa an even greater mystery than before as they do not conform to the existing literature from developed economies. The authors do, however, find that default risk is a significant predictor of momentum profits, which is a useful additional factor for those fund managers who utilise momentum strategies. This implies that a fundamental factor, default risk, is a potential explanation for the market-related momentum anomaly.

DIGITALIZACIJA JAVNIH USLUGA DRŽAVE KAO SEGMENT REFORME JAVNE UPRAVE U REPUBLICI SRBIJI

Information - communication technologies perhaps represent the most significant drive for the development of contemporary society and market. State is always the constant, unavoidable element in the functioning of every society and market and is, itself and through its bodies, susceptible to the influence of new trends and concepts. Their effects are so large that they change the role of the state and the nature of its bodies reflecting the need for continuous reform of public administration worldwide. One of the principal reforming elements and concepts in modern public administration refers to its digitalization, that is the process of electronization. Electronic government, that is e-government as a modern concept which assumes the digitalization of the entire work of public sector by replacing the traditional institutes and functions with modern concepts that include the application of information and communication systems. Thanks to digital reform, the work of public administration has become more transparent and efficient making it more accessible to interested parties and stakeholders, but also leading to the changed role – from public government to public service. The process of electronization and reform of public administration includes the digitalization of public services which public bodies offer to their citizens, enterprises, commercial sector and other persons they come in contact with, and whose rights and interests they protect. Public services include numerous services from different spheres of life: health, economy, ecology, internal affairs, etc. Bearing in mind the significance of public services for the citizens’ and companies’ regular work and functioning, their digitalization represents an important developmental phase which requires adequate academic and scientific approach.

A Common Market Problem Becomes More Common: the Trans-Tasman Proceedings Act 2010

<p>As part of a wider process of economic integration and the move towards a single integrated economic market, Australia and New Zealand entered into bi-lateral treaty in 2008 in order to resolve existing issues with the reciprocal enforcement of civil judgment which had arisen between the two countries. Labelled the “Christchurch Agreement” this treaty was incorporated by both countries into their domestic law in 2010 and now governs the allocation of disputes between Australia and New Zealand, where the parties are located within the common market of Australia and New Zealand and inter-state enforcement of civil judgments more generally. The Trans-Tasman Proceedings Act 2010 (Cth) and (NZ) (“TTPA”), will arguably provide significant benefits by reducing barriers to trade and improving the economic prosperity of both countries. However it is argued that, similar to other common market reciprocal enforcement schemes (such as the Brussels Model in the European Union), Australia and New Zealand failed to consider the impact of the outer world problem. The outer world problem is a recurring theme in common market arrangements, and results from a failure to provide generic proportionate jurisdictional test for cases involving foreign defendants sued in a common market state. The result is excessive jurisdictional rules within a particular state can potentially result in proceedings being retained where there is a strong argument the dispute is more closely connected with another forum. The resulting judgment (should judgment in the plaintiff’s favour be granted), can then be quickly enforced throughout the common market (specifically New Zealand) to the disadvantage of the defendant. The outer world problem is clearly present under the TTPA scheme, beginning in Australia and cumulating in enforcement of the judgment in New Zealand. It remains present even in the case of international commercial contract disputes. This is unfair and discriminatory towards foreign defendants, and arguably justifies reform, or at least discussion and justification of this approach.</p>

A Common Market Problem Becomes More Common: the Trans-Tasman Proceedings Act 2010

<p>As part of a wider process of economic integration and the move towards a single integrated economic market, Australia and New Zealand entered into bi-lateral treaty in 2008 in order to resolve existing issues with the reciprocal enforcement of civil judgment which had arisen between the two countries. Labelled the “Christchurch Agreement” this treaty was incorporated by both countries into their domestic law in 2010 and now governs the allocation of disputes between Australia and New Zealand, where the parties are located within the common market of Australia and New Zealand and inter-state enforcement of civil judgments more generally. The Trans-Tasman Proceedings Act 2010 (Cth) and (NZ) (“TTPA”), will arguably provide significant benefits by reducing barriers to trade and improving the economic prosperity of both countries. However it is argued that, similar to other common market reciprocal enforcement schemes (such as the Brussels Model in the European Union), Australia and New Zealand failed to consider the impact of the outer world problem. The outer world problem is a recurring theme in common market arrangements, and results from a failure to provide generic proportionate jurisdictional test for cases involving foreign defendants sued in a common market state. The result is excessive jurisdictional rules within a particular state can potentially result in proceedings being retained where there is a strong argument the dispute is more closely connected with another forum. The resulting judgment (should judgment in the plaintiff’s favour be granted), can then be quickly enforced throughout the common market (specifically New Zealand) to the disadvantage of the defendant. The outer world problem is clearly present under the TTPA scheme, beginning in Australia and cumulating in enforcement of the judgment in New Zealand. It remains present even in the case of international commercial contract disputes. This is unfair and discriminatory towards foreign defendants, and arguably justifies reform, or at least discussion and justification of this approach.</p>

Rent-seeking Practices in the Housing Development Approval Process

The lengthy, uncertain and onerous planning approval process in various countries around the world has prompted frustrated housing developers to seek influence by paying off approving officials. A research was conducted in Malaysia to investigate in greater detail this rent-seeking phenomenon by asking six fundamental questions. Rich data were obtained by interviewing 22 housing developers and consultants who work for them. Developers engage in rent-seeking behaviours to overcome genuine and artificial hurdles when applying for development approval. All approving agencies, though not all their staff, reciprocate to such behaviours. The monetary value of the payoffs depend on the rank of the public actor and project features. The higher the office holder is, the larger is the expected pay-off. Big and complex development projects in urban centres have a higher pay-off tag. Low value items television sets and car repairs serve to support normal lifestyle whereas high value items such as golfing and holiday trips support lavish lifestyle. Establishing good rapport is a prerequisite to the rent seeking and giving exchange. Elements which help foster reciprocity by state actors to housing developers’ rentseeking behaviours include low civil servant salary and high living cost, and weak punitive action. Common ethnicity facilitates nuanced communication by the latter, but common religion may dampen the former’s enthusiasm to accept any payoffs. Eventually house buyers and the general public are the casualties by virtue of higher house prices and substandard infrastructure. Given the combination of inherent features of the planning system and certain elements that impinge on state actors both of which promote rent-seeking practices, a realistic law enforcement solution is to prioritise illicit market-state exchanges involving grossly distorting rent extraction and pecuniary rewards of significant magnitude rather than total eradication of the practice.

LSTM-DDPG for Trading with Variable Positions

In recent years, machine learning for trading has been widely studied. The direction and size of position should be determined in trading decisions based on market conditions. However, there is no research so far that considers variable position sizes in models developed for trading purposes. In this paper, we propose a deep reinforcement learning model named LSTM-DDPG to make trading decisions with variable positions. Specifically, we consider the trading process as a Partially Observable Markov Decision Process, in which the long short-term memory (LSTM) network is used to extract market state features and the deep deterministic policy gradient (DDPG) framework is used to make trading decisions concerning the direction and variable size of position. We test the LSTM-DDPG model on IF300 (index futures of China stock market) data and the results show that LSTM-DDPG with variable positions performs better in terms of return and risk than models with fixed or few-level positions. In addition, the investment potential of the model can be better tapped by the reward function of the differential Sharpe ratio than that of profit reward function.

How to Measure a Two-Sided Market

Applying the theories of complex network and entropy measurement to the market, the two-sided market structure is analyzed in constructing the O2O platform transaction on the entropy measurement of the nodes and links. Market structure entropy (MSE) is initially introduced to measure the consistency degree of the individuals and the groups in the O2O market, according to the interaction in the profits, the time/space, and the information relationship. Considering that the market structure entropies are changing upward or downward, MSE is used to judge the consistency degree between the individuals and the groups. Respectively, considering the scale, the cost and the value dimensions, MSE is expanded to explain the market quality entropy, the market time-effect entropy, and the market capacity entropy.MSE provides a methodology in studying the O2O platform transaction and gives the quantitative index in the evaluation of the O2O market state.