Earnings management and investor protection during the COVID-19 pandemic: evidence from G-12 countries

Purpose The purpose of this paper is to examine the inter-relations among the strength of investor protection institutions, earnings management (EM) and the COVID-19 pandemic. Design/methodology/approach As a proxy for EM, the authors use discretionary accruals measure, estimated using the modified Jones model (1991). As a proxy for the strength of investor protection institutions, the study uses the Investor Protection Index, extracted from the Global Competitiveness Reports. The sample consists of 5,519 firms listed in the Group of Twelve countries during 2015–2020. Findings The study shows that firms tend to engage less in EM during the pandemic period. The authors also find a significantly negative relation between the strength of investor protection institutions and EM practices, and interestingly, this negative relation was found to be more pronounced during the pandemic period. Research limitations/implications For investors and practitioners, the findings help get insights into the behavior of firms in response of the pandemic shock in countries with solid institutional and legal protection. For policymakers, the findings reaffirm the critical role that institutional incentives and reforms can play, in influencing firms to exert more efforts to promote their financial reporting quality. Originality/value To the best of our knowledge, the study is one of the first attempts to examine the link between EM practices and investor protection during the COVID-19 pandemic. The findings extend both the literature on the role of institutional factors in promoting the earnings quality and the literature on COVID-19’s effect on firm performance and practices.

Challenging Novelties within the Circular Economy Concept under the Digital Transformation of Society

The study makes, under a new configuration of the circular economy, a cross-country analysis based on the Competitiveness and Innovation Indicators in the E.U., i.e., two sub-criteria: private investments, jobs, and gross value added; and patents related to recycling and secondary raw materials as a proxy for innovation. The analysis proved that investments influence the number of patents, and participate in societal transformation. A further cluster analysis classified countries on the level of innovation. The cluster analysis in SPSS centres on significant potential, weaknesses, impact, and waste management control through blockchain technology. It is found that the factors that influence innovation, according to the Global Competitiveness Report, link the business dynamism and innovation capability with the capacity to sustain resilient ideas, such as competitive intelligence and social entrepreneurship. The discussions aim to prove that the efforts to rethink the circular economy principles contribute to its conceptual and societal transformation role through the implementation of innovative processes, inventive solutions, and blockchain technologies, and their social consequences to solve environmental problems. Once understood and accepted, CE will drive sustainable behaviour.

African migrants plight in China: Afrophobia impedes China's race for Africa's resources and markets

ABSTRACT & RÉSUMÉ : Discrimination against the approximately 500,000 African (mostly irregular) immigrants has recently spread in China. During the corona pandemic, it degenerates into a true Afrophobia. Shortly before, five Nigerians in Guangzhou had reportedly tested positive for Covid-19. Africans are widely accused as drug traffickers and criminals. Also, they would endanger China's global competitiveness for Africa's resources through media baiting abroad. Current reports testify the displacement of African migrants from homes and hotels in Guangzhou (Canton), where most of the Africans live. They are dependent on informal, mostly illegal networks in order to be able to stay in the country. In online social networks Afrophobia as cyber racism is particularly pronounced. Thereby, racism is more deeply rooted in the mentality of many Chinese than is commonly assumed. According to a traditional Chinese proverb, the greatest evil to be avoided is ‘the destroyed nation and the annihilated race’. In addition, since 2005 land-grabbing by Chinese entrepreneurs in sub-Saharan Africa arose international attention. Its main purpose is to ensure food security in China and to profit from international grain speculation. It was racially legitimized from the start, with slogans such as, only Chinese investments could save Africans from their traditional ‘laziness’. This repeats deeply rooted neo-colonial European prejudices of a ‘wild, ahistoric and uncivilized Africa’. The prejudices are still associated with a feeling of racial superiority. The social fabric of China has always embodied essential characteristics of the exclusion of ‘foreigners’, focused on ethnicity, race, religion, sexual orientation and gender. The African Union, various African governments and even the United States have sharply criticized Beijing for mistreating migrants, particularly those from Nigeria, Ghana, Kenya and Uganda. Racist attacks on Africans in China have an oppressively long tradition, associated with the expansion of bilateral Chinese petty trade in sub-Saharan Africa in the early 2000s and the subsequent influx of African petty traders into China. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- RÉSUMÉ : La discrimination à l'encontre des quelque 500 000 immigrés africains (pour la plupart irréguliers) s'est récemment répandue en Chine. Pendant la pandémie de corona, cela dégénère en une véritable afrophobie. Peu de temps auparavant, cinq Nigérians de Guangzhou auraient été testés positifs pour Covid-19. Les Africains sont largement accusés d'être des trafiquants de drogue et des criminels. En outre, ils mettraient en danger la compétitivité mondiale de la Chine pour les ressources de l'Afrique par le biais du dénigrement médiatiques à l'étranger. Les rapports actuels témoignent du déplacement des migrants africains des maisons et des hôtels de Guangzhou (Canton), où vivent la plupart des Africains. Ils dépendent de réseaux informels, pour la plupart illégaux, pour pouvoir rester dans le pays. Dans les réseaux sociaux en ligne, l'afrophobie et le cyber-racisme sont particulièrement prononcés. Ainsi, le racisme est plus profondément enraciné dans la mentalité de nombreux Chinois qu'on ne le pense généralement. Selon un proverbe chinois traditionnel, le plus grand mal à éviter est « la nation détruite et la race anéantie ». En outre, depuis 2005, l'accaparement des terres par des entrepreneurs chinois en Afrique subsaharienne a attiré l'attention de la communauté internationale. Son objectif principal est d'assurer la sécurité alimentaire en Chine et de profiter de la spéculation céréalière internationale. Il a été légitimé racialement dès le départ, avec des slogans tels que, seuls les investissements chinois pouvaient sauver les Africains de leur « paresse » traditionnelle.

Le sort des migrants africains en Chine : L' afrophobie entrave la course de la Chine pour les ressources et les marchés de l'Afrique

ABSTRACT & RÉSUMÉ : Discrimination against the approximately 500,000 African (mostly irregular) immigrants has recently spread in China. During the corona pandemic, it degenerates into a true Afrophobia. Shortly before, five Nigerians in Guangzhou had reportedly tested positive for Covid-19. Africans are widely accused as drug traffickers and criminals. Also, they would endanger China's global competitiveness for Africa's resources through media baiting abroad. Current reports testify the displacement of African migrants from homes and hotels in Guangzhou (Canton), where most of the Africans live. They are dependent on informal, mostly illegal networks in order to be able to stay in the country. In online social networks Afrophobia as cyber racism is particularly pronounced. Thereby, racism is more deeply rooted in the mentality of many Chinese than is commonly assumed. According to a traditional Chinese proverb, the greatest evil to be avoided is ‘the destroyed nation and the annihilated race’. In addition, since 2005 land-grabbing by Chinese entrepreneurs in sub-Saharan Africa arose international attention. Its main purpose is to ensure food security in China and to profit from international grain speculation. It was racially legitimized from the start, with slogans such as, only Chinese investments could save Africans from their traditional ‘laziness’. This repeats deeply rooted neo-colonial European prejudices of a ‘wild, ahistoric and uncivilized Africa’. The prejudices are still associated with a feeling of racial superiority. The social fabric of China has always embodied essential characteristics of the exclusion of ‘foreigners’, focused on ethnicity, race, religion, sexual orientation and gender. The African Union, various African governments and even the United States have sharply criticized Beijing for mistreating migrants, particularly those from Nigeria, Ghana, Kenya and Uganda. Racist attacks on Africans in China have an oppressively long tradition, associated with the expansion of bilateral Chinese petty trade in sub-Saharan Africa in the early 2000s and the subsequent influx of African petty traders into China. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- RÉSUMÉ : La discrimination à l'encontre des quelque 500 000 immigrés africains (pour la plupart irréguliers) s'est récemment répandue en Chine. Pendant la pandémie de corona, cela dégénère en une véritable afrophobie. Peu de temps auparavant, cinq Nigérians de Guangzhou auraient été testés positifs pour Covid-19. Les Africains sont largement accusés d'être des trafiquants de drogue et des criminels. En outre, ils mettraient en danger la compétitivité mondiale de la Chine pour les ressources de l'Afrique par le biais du dénigrement médiatiques à l'étranger. Les rapports actuels témoignent du déplacement des migrants africains des maisons et des hôtels de Guangzhou (Canton), où vivent la plupart des Africains. Ils dépendent de réseaux informels, pour la plupart illégaux, pour pouvoir rester dans le pays. Dans les réseaux sociaux en ligne, l'afrophobie et le cyber-racisme sont particulièrement prononcés. Ainsi, le racisme est plus profondément enraciné dans la mentalité de nombreux Chinois qu'on ne le pense généralement. Selon un proverbe chinois traditionnel, le plus grand mal à éviter est « la nation détruite et la race anéantie ». En outre, depuis 2005, l'accaparement des terres par des entrepreneurs chinois en Afrique subsaharienne a attiré l'attention de la communauté internationale. Son objectif principal est d'assurer la sécurité alimentaire en Chine et de profiter de la spéculation céréalière internationale. Il a été légitimé racialement dès le départ, avec des slogans tels que, seuls les investissements chinois pouvaient sauver les Africains de leur « paresse » traditionnelle.

The Eurasian Development Bank as a mechanism of scientific and technological integration within the framework of EAEU: legal aspects

The subject of this research is the legal and cognate framework strategic aspects of the Eurasian Development Bank (EDB) as the key regional financial and investment institution that lend support to integration projects in the industrial sector in the countries of operations on a priority basis. The goal of this research lies in the conceptually systematization of the framework strategic and legal grounds of the  activity of the Eurasian Development Bank as the mechanism for the development of cooperation between EAEU member-states in the sphere of technological modernization of the economy and manufacturing of high-tech and science-driven products based on the cooperation projects with integration component. The author analyzes the instruments that are part of law of the Bank and determine its engagement in the integration processes in the industrial, agricultural and energy spheres, which suggest technological modernization. The conclusion us made that the current project and related analytical work of the EDB is in line with the trends of operation of the multilateral development banks, as well as correlated the requirement for increasing global competitiveness of the EAEU. The novelty of this research consists in comprehensive examination of the system of legal instruments aimed at implementation and strengthening of the potential of the Eurasian Development Bank as one of the mechanisms of industrial and technological integration within the EAEU. The author’s main contribution consists in argumentation of the position that overcoming systemic problems that persist in the activity  of the EDB, with the support of the national governments and national institutions of development, as well as active cooperation with the Eurasian Economic Commission, would most positively affect the intensification of the processes of industrial and technological cooperation and turning the EAEU into one of the most influential integration associations in modern world.

HIGHER EDUCATION AND TRAINING TOWARDS GLOBAL COMPETITIVENESS AND HUMAN DEVELOPMENT IN INDONESIA

This research explains about Indonesian labor competitiveness from perspective of the 5th pillar GCI (education and training). The purpose is to (1) measure the readiness of Indonesian labor at the ASEAN level and (2) ana-lyzed relationship between GCI and HDI. This research was using descriptive and inferential analysis. The re-sults show Indonesia is in fourth place in ASEAN. Coefficient correlation between the 5th pillar of CGI and HDI is 0.874. This explain the quality of human development is strongly related to global competitiveness. It can be interpreted that increasing human resources will also have positive impact on global competitiveness trough improving education.

ENSURING A BALANCED INNOVATIVE DEVELOPMENT OF UKRAINE'S ECONOMY UNDER THE CONDITIONS OF GLOBAL UNCERTAINTY

The need to ensure balanced innovative development of Ukraine is due to global uncertainty, dynamic processes and structural changes that are taking place today in the global economy. In these conditions, it is relevant to determine the position of Ukraine in the global coordinate system precisely in terms of innovation. Assessment of the state of the scientific and technical sphere, innovative development, research results in the countries of the world at the international level is carried out according to many indicators of various ratings, the most authoritative of which are: Global Innovation Index, Global Competitiveness Index, European Innovation Scoreboard. An analysis of the achieved level of innovative development of the Ukrainian economy in terms of international ratings requires the determination of methodological principles for their calculation. According to the results of the study, it was found that, despite some positive trends, in general, there is a significant gap between the level of innovative development of Ukraine and developed countries. It was found that the position of our country on the Global Competitiveness Index in the past few years has fluctuated between 76-89 places, in accordance with which, it is concluded that there are no effective reforms in the field of research, technology and innovation. The study of innovative activities of European countries and countries - regional neighbors demonstrated Ukraine's membership in the group with the status of «Modest Innovator». Low values of the analyzed indicators in international ratings are associated with errors in government policy and existing problems in the innovation sphere - the use of human potential, the quality of innovation infrastructure, the formation of sustainable relationships between elements of the national innovation system as a whole. The issues of cooperation with international institutions and poor integration into international scientific, technical and innovative cooperation remain unresolved. In this regard, steps are proposed in the direction of Ukraine joining the global innovation processes, which will bring the rating results closer to the level of developed countries in the future.

THE INNOVATIVE POTENTIAL OF THE INTERNATIONAL COMPANY IN TERMS OF KNOWLEDGE ECONOMY DEVELOPMENT

Theoretical approaches to the definition of the concept of “innovative potential” based on the paradigm of the knowledge economy are considered. The origin and development of the concepts of “innovative potential” and “knowledge economy” are investigated. The main types of economy are analyzed and the distinguishing features of each of them are highlighted. The main components of innovative potential in accordance with the type of knowledge are identified. The basic relationship between the knowledge economy and innovative potential at the micro and macro levels is justified. It has been confirmed that the knowledge-based economy of knowledge focuses on a person as the main source of knowledge, which it embodies in tangible and intangible forms, transfers this knowledge and aims to commercialize it. The innovative potential shows the readiness of the system to produce new knowledge by using existing knowledge. The theory of human capital and modern principles of its development are considered. The latest achievements, trends and sources of information that relate to the knowledge economy and innovative potential are analyzed: the human capital index, the global innovation index, and the global competitiveness index. The main trends in the pharmaceutical field and the state of innovation in it are considered. The practical connection between the development of the knowledge economy and innovative potential at the enterprise level is revealed. A survey of consumers in relation to pharmaceutical products of national and foreign manufacturers was conducted, because according to a statistical analysis, problems with the mismatch between the capabilities of foreign manufacturers and national manufacturers were identified, negatively affect the process of commercialization of knowledge by enterprises. The main problems of pharmaceutical enterprises from the point of view of the knowledge economy are identified. The solution to this problem will affect the economic situation of the enterprise, industry and economy of the country.

What Determines Profitability in the Indian Automobile Industry?

This study tends to examine the firm-level profitability determinants of Indian automobile and ancillary industry which is recognised for its global competitiveness. The study uses recent dataset to investigate the firm-level profitability determinants in the Indian automobile and ancillary industry and records the effect of shifts in profitability due to change in economic environment. This study intends at using real financial balanced panel data for a period 1999–2019 and applies the two-step system generalised method of moments regression model with robust standard errors. The study has found that lagged profitability, marketing and advertising intensity, firm’s market power and operational efficiency have exercised positive impact on firm-level profitability. Negative and statistically significant impact of raw material import intensity and export intensity highlights the need of planning and implementation of appropriate investment strategies. The findings of this study suggest that firms should pay more attention to optimise their operating expenditures, marketing and advertisement expenditures and expand their market power as a part of their survival and growth strategy. JEL Code: L25