France’s recovery boosts Macron’s re-election hopes

Significance Inflation is lower than in other major EU economies and unemployment is falling, albeit from a high base, as the country approaches presidential elections in April. Impacts Macron’s steady lead in the polls will boost investor confidence ahead of the presidential elections. While Spain is calling on the EU to start treating COVID-19 like influenza, France is unlikely to embrace such thinking until after April. The EU recovery fund and more flexible EU fiscal rules will enable the next government to pursue investment-led growth beyond 2022.

The Impact Of Adherence To International Auditing Standards In Increasing The Quality Of Audit Services A field study on external audit offices

The study aimed to identify the impact of adherence to the general standards of international auditing and increase the quality of audit services. Where the problem of the study was the collapse of many companies and economic institutions in recent years to filing complaints and judicial disputes against audit offices due to the poor quality of services provided by audit offices, which affected the reputation of the audit profession. Individuals to learn more effectively and use these strategies increased the quality of services provided, commitment to transparency and independence increased investor confidence and raised the level of service provided to the client, the study recommended developing the personal qualities necessary to carry out professional and technical duties throughout the auditor’s working life.

Sustainable Finance in Europe

The European Union has a clear strategy on how sustainable development should be financed. However, there is still no regulation that defines which activities can be considered sustainable and which cannot. Private initiative has taken the lead in recent years with the publication of different taxonomies and principles applicable on a voluntary basis to green financial products and social projects. The EU taxonomy, issued in 2020, establishes criteria to determine whether an economic activity is environmentally sustainable, and the green bond standard is in the consultation period in 2021. The EU taxonomy will increase investor confidence in green financial products, prevent greenwashing, and reduce information costs. This chapter reviews the evolution and future application of the EU taxonomy, the EU green bond standard, and the need to adopt a taxonomy for socially sustainable activities.

Industry Impact of Covid Epidemic based on Event Analysis

On the day of the outbreak, the Covid epidemic brought huge systemic risks in China stock market, which even offset the positive effects brought about by the epidemic. For example, industries such as medicine did not show the expected general rise on the day of the epidemic. After the outbreak, with the rapid intervention of the government, investor confidence regained and they had high hopes for the market outlook. The market rebounded quickly and returned to the pre-epidemic level in less than 10 days. However, the performance of various industries in this process is different. This paper examines the impact of Covid epidemic on various industries in China based on the event analysis method.

Bilateral Investment Treaty and Foreign Direct Investment in India

India has one of the largest Bilateral Investment Treaty (BIT) networks with other counties around the world. The BITs is to promote foreign investment by increasing investor confidence, empowering individual private parties to take international arbitral proceedings against the threat of appropriation by the government of the host country. This paper analyses the effect of BITs on FDI inflows in India using panel data for 76 countries for the time period 2000-2016 applying a dynamic panel generalised method of moments instrumental variable estimation method. The differenced GMM and system GMM estimates show a significant negative effect of bilateral investment treaties on the FDI inflows in India. While the lagged FDI has a significant positive effect, the financial openness of the source nations is reducing FDI inflows to India. The POLCON index shows that the countries with lesser political constraints have positive FDI outflow towards India. As opposed to domestic variables, the Chinn-Ito and POLCON indices have a greater share of change in FDI inflows to India. It seems that the BITs is not efficient enough to create investor confidence to invest in India.

Legal Framework for Green Finance in the EU and Russia

The climate agenda has recently taken on new significance with global climate change threatening all of humanity. The regulation of green finance instruments needs to be improved in order to attract more money to fight global warming. To ensure investor confidence in green instruments, a common standard for them must be created. The European Union and Russia have been forming a regulatory framework aiming to create national standards for green bonds. The present article analyses the European Commission’s proposed package of measures to help improve the flow of money toward financing the transition to a sustainable economy. The author explores the problems of developing legal regulation of sustainable finance in Russia, especially with regard to the creation of a national taxonomy of green projects and national verification of sustainable financial instruments. The comparative legal study of the EU and Russian draft laws on green finance has demonstrated similar approaches to establishing regulatory rules. The article describes the prospects for green finance in the context of digitalization. Based on a study of best practices (Green Assets Wallet, green bonds, etc.), it is concluded that digital solutions for sustainable finance are currently still not well-developed. In the future, however, their use will significantly increase investor trust in green instruments and reduce costs, in particular through digitalization of the verification process.

Market Reaction to Abnormal Inventory Growth: Evidence for Managerial Decision-Making

Prior research demonstrates that manufacturing firms increase production (relative to sales) to transfer fixed costs from cost of goods sold (COGS) to inventory accounts, thereby increasing income to reach or surpass earnings thresholds. We examine how the market reacts to this earnings management strategy. We find that investors respond positively to inventory growth based on an expectation of increased future sales; however, this signal is weaker for inventory manipulators. Further, the market premium from meeting or beating analyst earnings forecasts by manipulating inventory is smaller than the premium for achieving this threshold absent inventory manipulation or through accrual manipulation. Finally, we examine firms considered to be “serial” inventory manipulators, finding that the market consistently discounts earnings beats for these firms, suggesting that inventory manipulation erodes investor confidence in firms’ earnings. Collectively, our results provide new insights into a challenge facing operations managers and finance managers in manufacturing firms.

LEGAL ASPECTS OF MANAGING FAILURE OF A CENTRAL SECURITIES DEPOSITORY (CSD) PARTICIPANT

The success of the financial market in South Africa is dependent on investor confidence and such confidence is dependent on market stability and certainty with regard to the financial risks to which market participants are exposed when trading on the financial markets. Even before the global meltdown impacted on South Africa, some concerns were raised that the South African legal framework pertaining to the financial market does not contain comprehensive principles regulating the procedures and legal position after the event of insolvency of a market participant. In response, Strate Limited, with the assistance of other market players, has drafted a proposed manual, the Participant Failure Manual, regulating the event of insolvency of market participants, referred to as “Participant Failure”. This note aims to discuss the meaning of Participant Failure, provide an overview of the Participant Failure Manual and more importantly, discuss the impact of Participant Failure on settlement, and recommendations as proposed in the Manual.

Defining Nature-Based Solutions Within the Blue Economy: The Example of Aquaculture

The concepts of Nature-based Solutions (NbS) and the Blue Economy (BE) are two prominent sustainability frameworks at the forefront of policy dialogues. However, investment within the BE has been slowed by the lack of a sufficiently robust operational definition. This lack of definition reduces investor confidence and impacts adoption by policy makers and practitioners. By considering the overlap between the two sustainability frameworks it is possible to identify specific sectors and activities within the BE that also fit the operationalised criteria for NbS. Undertaking this process for one sector of the BE (aquaculture) has provided evidence that aquaculture activities, if planned and operated within the criteria, would qualify as NbS and as such may unlock financing for the provision of ecosystem services.