Is this time different? Reflections on recent emerging-market turbulence
R&D projects in pharmaceutical industry are extremely risky and bring benefits in long-run period. Self-interested managers try to avoid risk and underinvest in R&D. In this paper we study the effect of independent directors, insider ownership and scientific connections on R&D investments. Independent directors and insider ownership can mitigate agency problem by additional monitoring and convergence of interests. Scientific collaborations promote technological development and increase R&D. The research reveals the difference of the effects in emerging and developed market.
> Poland. The Polish economy is growing like a DM economy, while Bulgaria is still searching for a new growth model. Unlike many other countries, Poland was able to avoid recession in 2008-09, and it continues to demonstrate sustainable growth, albeit the threat of deflation exists. Polish economic growth is expected to accelerate this year, supported by a strong performance in construction. Consistent and strong macroeconomic policy kept the country's debt/GDP ratios at bay during the crisis, and has contributed to steady deleveraging in recent years. > Bulgaria. Bulgaria's economic growth remains slow, and after a sharp correction in 2009 the economy saw little restructuring in recent years. There has been deflation since mid-2013, but economic growth is set to accelerate this year to around 1.5%, which could offset the negative impact of deflation on the budget. The country's industrial output improved in 2013-14, but domestic demand has weakened in recent months. > Latvia. Latvia's economic growth still remains strong but may decelerate this year as a side effect of instability in the region and mounting complications in relations between Russia and the EU. Heavily indebted Latvia tightened its macroeconomic policy in the aftermath of the 2008 crisis and remains committed to maintaining macro stability, having joined the Eurozone. Deflation cannot be ruled out as a result.
The paper discusses corporate performance modeling through the integrated conception of corporate financial architecture. We examine the influence of financial architecture based on ownership structure, capital structure and corporate governance over strategic performance of Russian nonfinancial companies. First, we conduct a comparative analysis of different measures for corporate performance using economic profit and Tobin’s Q as dependent variables. Second, we test our model using the unique research database of 70 Russian companies that allowed us to test different dimensions of corporate governance quality and to demonstrate the high correlation between the quality of corporate governance and Russian companies’ performance. Third, we contribute to the challenging issue of exploring the relationship between boards and corporate performance before the global crisis and within the crisis. We contribute to the literature by applying new approach derived from corporate financial architecture concept to economic profit modeling in an emerging market.
Emerging market companies typically have lover values than their counterparts in developed markets. In order to account for this practitioners typically use an ad hoc premium in discount rate in their DCF models – so called country risk premium. Approaches for this premium calculation do not have adequate theoretical basis in the literature. There is an alternative to premium which is in accounting for a country risk through scenario approach. However it is difficult to implement practically because of the calibration problem. Thus there is a problem of a country risk.
The concept of country risk premium has to be abandoned. We propose following procedure in emerging company DCF valuation.
1) Calculate theoretical discounted value as if the business is from developed country.
2) Account for the risk of an emerging market applying the discount. The discount can be obtained through analysis of differences between emerging and developed stock market multiples. As a result the problem of an emerging country risk stops being "black box" and becomes clear, observable and verifiable.
This paper proposes critical analysis of the theory and practice of discount rates. In addition paper gives a theoretical basis for country risk from the prospective of New Institutional Economics.
Building long-term customer relations plays a pivotal role in contemporary management practice. Customer relationship management process in a company involves various different actors ranging from top management to line-level employees. One of the key areas of it is related to the utilization of corporate CRM system which serves as crucial information source in providing better customer insight. This article explores directions for improving the use of CRM system through analyzing the gaps between its perception by managers and sales representatives in a multinational pharmaceutical company. The field research is based on a quantitative data from online questionnaires. The sample consists of 219 representatives based in four emerging markets. These initial findings could be useful for other pharmaceutical companies in emerging markets.
Smoking is a problem, bringing signifi cant social and economic costs to Russiansociety. However, ratifi cation of the World health organization Framework conventionon tobacco control makes it possible to improve Russian legislation accordingto the international standards. So, I describe some measures that should be taken bythe Russian authorities in the nearest future, and I examine their effi ciency. By studyingthe international evidence I analyze the impact of the smoke-free areas, advertisementand sponsorship bans, tax increases, etc. on the prevalence of smoking, cigaretteconsumption and some other indicators. I also investigate the obstacles confrontingthe Russian authorities when they introduce new policy measures and the public attitudetowards these measures. I conclude that there is a number of easy-to-implementanti-smoking activities that need no fi nancial resources but only a political will.
One of the most important indicators of company's success is the increase of its value. The article investigates traditional methods of company's value assessment and the evidence that the application of these methods is incorrect in the new stage of economy. So it is necessary to create a new method of valuation based on the new main sources of company's success that is its intellectual capital.