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What external financing instruments for the development of innovation and entrepreneurship are the most effective, including financing the development of innovative, technological startups, i.e. business entities at an early stage of their dynamic development developing innovative new technologies?
In my opinion, external financing instruments play a key role in the development of innovation and entrepreneurship, especially in the case of technology startups, which often require significant capital outlays for research, development and commercialization of their solutions. Among the most effective tools for external financing of innovation and entrepreneurship development are venture capital (VC) funds, which offer not only financial capital, but also support in the form of knowledge, experience and business contacts. VC funds are particularly effective because they invest in early-stage companies, accepting high risk in exchange for a potentially high rate of return. In addition, the involvement of VC fund investors often enhances the credibility of startups, which can make it easier for them to win further rounds of funding. But there are also investment banks financing innovative startups, commercial banks, business angels and so on. Besides, there are also public institutions providing financial subsidies from the state's public finance system operating within the framework of government programs of active pro-development economic policies to support the development of innovation and entrepreneurship.
And what is your opinion on this topic?
What is your opinion on this topic?
What is your opinion on this issue?
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Thank you very much,
Best wishes,
I would like to invite you to join me in scientific cooperation,
Dariusz Prokopowicz
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Although they are not a direct funding instrument, Innovation/ Entrepreneurship Hubs can provide an enabling environment and requisite knowledge, tools and technology to assist start-ups to explore and refine their innovations to a level wherein it becomes necessary to source capital funding to establish/ upscale their operations
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How to build an effective system of activating the innovativeness of business entities financed with the use of subsidies from the system of public finances of the state?
What are the most effective measures for activating the innovativeness of economic entities, thanks to which the scale of investments made in technological branches of the economy increases and economic development accelerates?
An important factor determining the level of economic development in highly developed countries, which also translates into the level of income and general well-being of the economic, material, livelihood situation, etc. of citizens is the level of innovation of companies and enterprises. The issue of innovativeness of economic entities translates into labor productivity, efficiency of manufacturing processes and profitability of economic processes implemented by companies and enterprises. Innovation of economic entities can be realized in various spheres and areas of economic activity of companies, enterprises and also financial and public institutions. Business entities can create and develop technological, product, service, logistics, process, organizational, marketing and other innovations. In connection with the rapid technological progress and the ICT and Industry 4.0/5.0 technologies being developed, among others, technological innovations are particularly important considering the issues of improving the efficiency of manufacturing processes, increasing labor productivity, improving the profitability of production, etc. In recent years, the scale of implementation into business entities of such Industry 4.0/5.0 technologies as Big Data, cloud computing, Internet of Things, blockchain, digital twins, cyber security instruments, machine learning, deep learning, artificial intelligence, among others, has been growing. Among the important factors in the implementation of new technologies to companies, enterprises, financial and public institutions are favorable conditions for external investment financing of the creation or purchase, implementation and development of new technologies. External financing includes, among others, investment loans offered by commercial banks, equity financing offered by investment funds, national financial subsidies and financial subsidies under certain European Union programs, financing realized through the issuance of securities, i.e. shares and corporate bonds, loan funds, funds, etc. The innovativeness of business entities is often correlated with the level of entrepreneurship of these entities. Therefore, the government programs conducted to activate the innovation of business entities are often programs that also activate entrepreneurship. In recent years, the instruments of activation of innovation and entrepreneurship have included changes to the tax system as part of the fiscal policy pursued, as well as increasing outlays from the state finance system for the creation of funds for systemic support for the development of innovative business ventures initiated by startups and companies operating in the new technology sector. On the other hand, the soft monetary policy applied before and during the Covid-19 pandemic did not have significant effects in improving innovation and entrepreneurship. The interest rates lowered by the central banks to successive historically low levels did not result in a significant increase in the scale of innovation and entrepreneurship among economic agents. Lenient monetary policy improved liquidity in the financial sector, including the interbank market, activated lending in commercial banks' lending activities, improved the prosperity occurring in capital markets, including reducing the scale of the downturn in securities markets. Indirectly, therefore, an easing monetary policy can be a factor in the activation of innovation and entrepreneurship, if a significant portion of business loans, including investment loans, are taken by business entities to finance a venture involving the development or purchase and implementation of new technologies. In the context of the activation of innovation and entrepreneurship, it may also be important to improve and adapt to a specific socio-economic situation interventionist, anti-crisis and pro-development instruments and programs implemented under specific socio-economic policies, including, above all, budgetary, fiscal and sectoral policies, including sectoral policies to support the development of innovation.
I am conducting research on this issue. I have included the conclusions of my research in the following article:
In view of the above, I address the following question to the esteemed community of scientists and researchers:
What are the most effective measures for activating the innovativeness of business entities, so that the scale of investments made in technological branches of the economy increases and economic development accelerates?
How to build an effective system of activating the innovativeness of business entities financed with subsidies from the state's public finance system?
How to effectively activate the innovation of business entities using financial subsidies from the state's public finance system?
What do you think about this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Thank you,
Best wishes,
Dariusz Prokopowicz
The above text is entirely my own work written by me on the basis of my research.
In writing this text, I did not use other sources or automatic text generation systems.
Copyright by Dariusz Prokopowicz
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Effectively activate business entity innovation through financial subsidies by:
1. Providing targeted grants or tax incentives for R&D investments.
2. Offering competitive grants with clear eligibility criteria and performance metrics.
3. Facilitating collaboration between academia, industry, and government through innovation hubs or clusters.
4. Establishing venture capital funds or loan programs specifically for innovative startups.
5. Ensuring transparent application processes and monitoring mechanisms to ensure accountability and impact.
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How can green central banking motivating commercial banks to develop green banking involving the provision of green loans financing the implementation of green economic ventures develop?
How can central banks inspire commercial banks to scale up the development of green banking?
How can central banks conduct green monetary policy?
Green finance, green bonds, green credit, green banking, etc. are all important issues of a green, sustainable closed-loop economy. Banks, by providing green loans, finance green, pro-environmental, pro-climate, sustainable economic projects, which are an important part of the green transformation of the economy, in which the building of a green, sustainable closed-loop economy is carried out. This process is becoming in many countries a strategic, key program segment of environmental, climate, energy, agricultural, transportation development, construction, waste management, nature resource management, forest management, etc. policies. This process includes a strategic plan to carry out a pro-environmental and pro-climate transformation of the classic growth, brown, linear economy of excess to a sustainable, green, zero-carbon zero-growth and closed-loop economy. The financial sector, including the banking and investment fund sector, is playing an increasingly important role in realizing the aforementioned green transformation of the economy. This is due to the need to allocate more and more money to green economic ventures. Besides, taking into account the rate of progressive climate change, including, above all, the accelerating process of global warming, it is necessary to significantly increase the scale of implementation of pro-environmental and pro-climate economic projects, which should result in a significant reduction in greenhouse gas emissions into the atmosphere, reducing the level of environmental pollution, reducing the scale of waste and consumption of natural resources, including the key resources for industrial development, non-renewable raw materials and clean water resources, which should be a renewable resource, but in the increasing area of land areas subject to drought is becoming a non-renewable and scarce resource. The scale of financing for green economic projects implemented in highly developed countries is insufficient in relation to needs, and in economically underdeveloped countries there is usually an even greater deficit in financing the green transformation of the economy. This issue is particularly relevant given that most of the economically underdeveloped countries are located in tropical, subtropical areas, in zones particularly vulnerable to permanent and increasingly frequent periods of severe drought and/or violent storms and downpours, rapid soil aridity and other negative effects of the ongoing process of global warming. In this regard, highly developed countries should increase the scale of financial assistance to less economically developed countries in order to support the financing of green economic projects that play a key role in the implementation of the green economic transformation plan. Because within the framework of international finance, internationally operating banks, i.e. the World Bank, the European Bank for Reconstruction and Development, the International Monetary Fund, which also finance green economic ventures to a certain extent, play an important role. Other key institutions in financial systems include central banks, which shape monetary policy, are banks of the state and banks of banks, influence the level of liquidity in the banking sector and the level of credit, investment, etc. risks taken by financial institutions and non-financial sector operators. Accordingly, central banks can also play an important role in the context of green finance, green financing, influencing commercial banks' lending activities of granting green loans and issuing green corporate bonds. In view of the above, central banks acting as a bank of banks vis-à-vis commercial banks can therefore motivate commercial banks to conduct green banking, including granting green loans and issuing green bonds. In the framework of what could be called green central banking, central banks could provide loans on preferential terms to commercial banks for the development of green lending, with the help of which pro-environmental, pro-climate and/or pro-environmental economic ventures would be financed, e.g. by financing the development of energy based on renewable energy sources, development of sustainable organic agriculture, improvement of waste separation and recycling technologies, development of electromobility, sustainable construction, development of green smart cities, construction of rainwater harvesting facilities, seawater desalination, reforestation of industrially degraded areas, etc. In the context of this issue, there is the question of possible opportunities and conditions for the creation of a strategy involving central banks conducting what could be described as a green monetary policy.
I am conducting research on this issue. I have included the conclusions of my research in the following article:
IMPLEMENTATION OF THE PRINCIPLES OF SUSTAINABLE ECONOMY DEVELOPMENT AS A KEY ELEMENT OF THE PRO-ECOLOGICAL TRANSFORMATION OF THE ECONOMY TOWARDS GREEN ECONOMY AND CIRCULAR ECONOMY
I invite you to discuss this important topic for the future of the planet's biosphere and climate.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
How can green central banking motivate commercial banks to develop green banking involving green loans that finance the implementation of green economic ventures?
How can central banks inspire commercial banks to scale up the development of green banking?
How can central banks conduct green monetary policy?
How can green central banking develop by motivating commercial banks to develop green banking, including green lending?
What do you think about this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Best wishes,
Dariusz Prokopowicz
The above text is entirely my own work written by me on the basis of my research.
In writing this text, I did not use other sources or automatic text generation systems.
Copyright by Dariusz Prokopowicz
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Green central banking can motivate commercial banks to develop green banking by incorporating environmental criteria into lending policies, offering preferential rates for green loans, and providing regulatory incentives for sustainable practices.
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What could be the factors for the decline in the overall level of investment in the economy despite the available various instruments for external financing of economic activity, low inflation, normalized economic situation?
What could be the factors of the demonstrated for the period of the last few quarters decline in the overall level of investment in the economy in a situation characterized, among others, by such factors of influence on economic processes as available various programs and instruments of external financing of economic activity, low inflation, low unemployment, normalized general economic, macroeconomic situation, etc.?
According to the prevailing macroeconomic forecasts, the Polish economy in 2024 and 2025 should be in a trend of improving economic growth rates. In February and March 2024, inflation fell to a low level close to the inflation target. In addition, in the second half of 2023, there was a clear improvement in the residential real estate sector, due to the introduction of a government program to activate the purchase of real estate by citizens on credit, i.e. the “2% Safe Credit” program.” A year ago, the macroeconomic situation in Poland indexically looked much weaker than now. The level of economic growth was lower and was below zero, i.e. there was a recession. This was the second recession since the Covid-19 pandemic, i.e. since 2020, and the first after the end of the pandemic. The recession of the first half of 2023 was due to a decline in the economic activity of companies and businesses, as a result of the various crises that occurred during and after the Covid-19 pandemic. These downturn factors include the pandemic economic crisis with the deep recession of the economy, which occurred mainly during the first wave of the pandemic, i.e. in the spring of 2020. In addition to this, the rapid increase in inflation, which in Poland began from the 2nd quarter of 2021. This growth continued until February 2023, when consumer inflation, according to the Central Statistical Office, reached 18.4 percent. In 2022, Poland experienced a deep energy crisis generated by the increase in fossil fuel prices. The energy crisis was deep in Poland due to the still high share of up to three-fourths of conventional energy sources, i.e. based on burning fossils, mainly coal and lignite, against the background of the overall mix of energy sources. The increase in costs associated with high fossil fuel prices, high energy prices, and more expensive bank loans generated a downturn in the economy in the 2022-2023 period. The increase in interest rates on bank loans, including business loans, investment loans offered to companies and businesses by commercial banks was a derivative of the anti-inflationary raising of interest rates by the central bank, i.e. the National Bank of Poland, which lasted from October 2021 to September 2022. In addition, the changes in the fiscal system carried out in 2022 under the government's Polish Deal program also caused many organizational and financial problems in a significant part of the functioning business entities. In addition, all of the aforementioned crises and the changes applied by the central bank in terms of the monetary policy pursued also negatively affected the PLN exchange rate against other currencies and generated a high amplitude of changes in the PLN exchange rate, which also negatively affected many business entities operating in non-financial sectors of the economy. The increased scale of exchange rate volatility primarily negatively affected enterprises that exported a significant part or most of their production to countries with a different currency. The amount and share in terms of production of products against the economy for such enterprises has increased significantly since 2004, when Poland became a member of the European Union. An important issue confirming the not-so-good economic and financial situation of companies and enterprises in Poland recently is the fact that in 2023 the historically largest scale of declared bankruptcies of business entities and the termination of their activities occurred. All of the above-mentioned issues have negatively affected the operation of many companies and enterprises operating in Poland over the past few years. Currently, in 2024, positive in its content forecasts of macroeconomic developments in the domestic economy determined for the next few quarters prevail. In addition to the currently low inflation and stabilized economic situation, there has recently emerged an important pro-development factor, which is additional subsidies from the European Union. Well, at the end of 2023, previously granted EU subsidies and low-interest loans were unblocked for Poland under a financial program referred to as the National Recovery Plan. Because the funding Poland will receive in the 2024-2025 period from the National Reconstruction Plan program and also funding under the European Union's Cohesion Programs will be historically record high. Consequently, many new investment projects will probably be carried out using this money. In view of the above, the macroeconomic situation is highly complex and presents an ambiguous picture when it comes to diagnosing the sources of the decline in investment.
The key issues of the impact of the Covid-19 pandemic on the economy and financial markets are described in my article below:
IMPACT OF THE CORONAVIRUS PANDEMIC (COVID-19) ON FINANCIAL MARKETS AND THE ECONOMY
IMPACT OF THE SARS-COV-2 CORONAVIRUS PANDEMIC (COVID-19) ON GLOBALIZATION PROCESSES
In view of the above, I address the following question to the esteemed community of scientists and researchers:
What could be the factors of the demonstrated for the period of the last few quarters decline in the overall level of investment in the economy in a situation characterized, among others, by such factors of influence on economic processes as available various programs and instruments for external financing of economic activity, low inflation, low unemployment, normalized general economic, macroeconomic situation, etc.?
What could be the factors for the decline in the overall level of investment in the economy despite the available various instruments for external financing of economic activity, low inflation, normalized economic situation?
What do you think about this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Best wishes,
Dariusz Prokopowicz
The above text is entirely my own work written by me on the basis of my research.
In writing this text, I did not use other sources or automatic text generation systems.
Copyright by Dariusz Prokopowicz
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I think there are a couple of explanations for that. From a top-down perspective, one could argue that the decline in investments is the result of the change in the global macro backdrop particularly after the GFC, as the main driver of investments, namely growth / economic activity, has been replaced with global liquidity(thanks to QE).
Also, low, if not negative, rates might also have an impact as in an environment of declining return on investments (RoI), the focus switched to those projects that has the potential to offer high RoIs, such as start-ups, tech companies etc.
On top, the de-globalization trends and rising protectionism has curbed foreign direct investment flows, particularly in emerging markets, which negatively affect the investment prospects.
From a bottom-up perspective, I would argue that the decline in RoI is responsible. Given the low RoI levels, most of the corporates turned their focus to shareholders, and start offering share buybacks, or increasing their dividends etc.
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Hello Scholars,
Can you please tell me how do I measure whether any country is using (mandatory) personal credit rating? Is there any database that can help to find out the mandatory personal credit rating score?
Regards
Dr. Aziz
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Apart from the United States, other countries that use credit scores include (visit Wikipedia):
1. Canada,
2. Germany,
3. Australia,
4. China, and
5. the United Kingdom.
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Dear Scholars,
I wish that researchers from all over the world are linked through this portal. Would you kindly enlighten me by naming the country where (mandatory or optional) "personal credit scoring" is used?
Regards
Dr. Aziz
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as a rule, a credit card is a type of credit, so scoring is also checked with this form of financing.
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Is Time Money? Does Using Your Time Adequately Impact Your Financial Performance?
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Yes,
  • Your primary source of income often comes from the time you spend working. The more productive and efficient you are during your working hours, the more you can earn. For example, if you're an assistant professor, dedicating your time to teaching, research, and other productive tasks can lead to promotions, higher salaries, and better financial stability.
  • Investing your time in learning about financial matters, such as stocks, real estate, or entrepreneurship, can lead to wise investment decisions. This, in turn, can increase your wealth over time. Learning and making informed financial choices require an investment of time.
  • Many people use their free time to start side businesses or freelance work. This extra effort can generate additional income, which can significantly impact your financial well-being. For instance, if you have programming skills, using your free time to freelance can boost your earnings.
  • Spending time on acquiring new skills and knowledge can open up better job opportunities or entrepreneurial ventures. A well-educated and skilled individual often commands higher pay or can create a successful business.
These are points I believe that can proove that Time is Money, Hope it helps Kwadwo Boakye
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How should credit risk management systems and procedures be improved at investment banks investing clients' money in securities so as to significantly reduce the levels of potential systemic credit risk generated and reduce the frequency and scale of financial crises developing?
The bankruptcy of Silicon Valey Bank and Signatire Bank, i.e. banks operating within the framework of investment banking based on equity investments in securities has resulted in investor anxiety, increased levels of uncertainty in financial markets, including equity markets, securities markets. Once again, the question of the possibility of a repetition of the situation of the global financial crisis of 2007-2009 has resurfaced, with central banks intervening swiftly and efficiently to fully guarantee all deposits and bank deposits above the statutory limits set for deposit guarantee institutions. This raises the debatable question of why, 15 years after the global financial crisis of 2007-2009, there are still cases of large investment banks failing when, moments afterwards, the central bank announces the full guarantee of all bank deposits and bank deposits and without quota limits in each of the remaining functioning banks. And this is what happened moments after Silicon Valey Bank and Signatire Bank declared bankruptcy. In addition to this, another debatable issue arises regarding the potential for an increase in the scale of moral hazard in both the commercial and investment banking community as well as in bank customers, which could lead to a significant increase in the level of acceptable investment, credit, liquidity, debt, etc. risks for many businesses. If this were to happen, the result could be an increase in systemic credit risk in the banking sector, which is hardly the purpose of central banking, but rather the opposite. But, on the other hand, some central banks also carry out financial operations on international financial markets, often making substantial revenues and profits. This raises a third debatable issue, which is to consider the key priorities of central banks' activities in addition to looking after the value of money and the stability of the banking system. The central bank's participation in the process of injecting additional money into the economy through the purchase of treasury bonds and carrying out financial operations in the international financial markets, including the foreign exchange markets and with the use of securities to a significant extent can influence the formation of the national currency exchange rate on the one hand and can be a way to generate profits for the central bank on the other. Obviously, the issue of the stability of financial markets, the security of the banking system, the formation of the value of the currency within a certain range, not allowing too high a level of overcredit for investment processes carried out by various economic entities also operating in non-financial sectors of the economy and not allowing too high a level of systemic credit risk in banking are key priorities. These priorities are legally anchored both in the Constitution, i.e. the Basic Law, and in the legal norms defining the functioning of the central bank. Of course, the high-security banking system thus built does not exempt commercial banks and investment banks from the need to continually improve their credit risk management systems. New information technologies and Industry 4.0 are emerging and are also being implemented into banking. New risk factors that are difficult to predict are emerging, such as the occurrence of the SARS-CoV-2 (Covid-19) coronavirus pandemic in 2020. Situations continue to arise where the optimum levels of credit risk are exceeded with regard to the investment banks' equity investments in securities. Consequently, there is still a high degree of possibility that investment banks operating in the capital markets may permanently lose liquidity as a result of certain investment decisions and the quality of the credit risk management improvement process carried out. Also, the banking supervisory institutions, the institutions supervising the financial system should review the issue of the adequacy of the prudential instruments applied by banks, instruments for controlling credit risk, liquidity risk, debt risk, operational risk, market risk, foreign exchange risk, interest rate risk, cyber risk, etc. in view of the changing reality in which banks and the whole banking system operate. It is therefore necessary, in this regard, for banking supervisory institutions, institutions overseeing the financial system, to carry out a kind of ongoing monitoring of the adequacy of the credit risk management systems applied in banks and other risk categories, in order to continually answer the question of whether these systems have become obsolete in the context of the technological progress taking place and the emergence of new risk factors not previously known or not previously present on a large scale in the banks' environment or occurring in their customers. Therefore, both the financial supervisory institutions and the risk management departments of commercial banks, deposit and credit banks and investment banks are once again reviewing the adequacy of the applied prudential and risk control instruments, procedures and credit risk management systems in relation to the situation of the growth of investment and other risks, the possibility of a deepening of the downturn in the economy, in the reality of high inflation, high interest rates, the possibility of stagflation.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
How should credit risk management systems and procedures be improved at investment banks investing investor clients' money in securities so as to significantly reduce the levels of potential systemic credit risk generated and reduce the frequency and scale of the development of financial crises?
What do you think about this subject?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Warm regards,
Dariusz Prokopowicz
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Will the recent economic crises, i.e. the 2020 pandemic economic crisis and the 2022 energy crisis, soon be followed by a financial crisis in the banking sector and/or a debt crisis in the public finances of states?
When, in March 2020, following the WHO's declaration of a global epidemic or pandemic, there was a panic sell-off of investment assets on the capital markets and the risk of a deep, double-digit recession of the economy emerged, central banks cut interest rates and the governments of some countries launched financial assistance programmes on a record scale, consisting of non-refundable financial subsidies for commercially operating companies and enterprises in various sectors of the economy, refinancing of fixed costs of economic activity, deferral of payments of contributions to the social security system, tax reductions, etc., the state's financial resources for these large assistance programmes will be used to finance the crisis. The state drew its financial resources for these large financial aid programmes from additional issues of treasury bonds, which were purchased by commercial banks, investment banks, enterprises, citizens and in some countries, such as Poland, mainly by the central bank. Additional, huge amounts of money introduced into the economy without being covered by manufactured products and services, as predicted in mid-2020, generated a strong increase in inflation on the basis of an increase in the prices of raw materials, products and services, which began almost at the beginning of 2021. Additional large amounts of money without coverage in economic goods in some countries such as Poland were introduced into the economy outside the budget, i.e. by transferring this additional money to special purpose funds created for this purpose functioning in institutional government agencies bypassing the state budget. These institutions distributed this money in the form of mainly non-refundable subsidies to companies and enterprises, some of which did not function because they were temporarily in lockdowns introduced by the government. During the 2020 pandemic economic crisis, therefore, interventionist, historically large bailout programmes based on so-called Crisis Shields were applied, and in some countries mainly on the basis of issuing and selling to commercial banks, companies and citizens additional Treasury bond issues. Many banks purchased these treasury bonds in large quantities when, prior to the pandemic, inflation and interest rates were much lower than in the 2021 - 2023 period. During the 2020 pandemic, central banks further reduced interest rates to interventionist low levels. Some commercial and investment banks, with the economic downturn and recession deepening during the pandemic, bought government bonds treating these instruments as safe assets during the economic crisis and as they reduced the scale of their lending and/or investments in securities generating higher levels of investment and credit risk such as shares issued by listed companies due to the recession of the economy. However, when central banks started a cycle of interest rate increases from 2021 and 2022 onwards, then the prices of previously issued government bonds with lower interest rates on stock exchanges began to fall, as these securities lost their previous attractiveness. At that point, rating agencies began to downgrade the ratings of banks that had previously purchased large volumes of previously issued sovereign bonds with significantly lower interest rates, in view of the average market interest rate levels already prevailing from 2022 onwards, then the problem was recognised. This problem was the potential insolvency and large financial losses of these banks. However, when analysed on a macroeconomic level, the problem is now much broader. Well, public debts have increased strongly in many countries after the pandemic economic crisis of 2020. The increase in inflation already predicted from mid-2020, which started to materialise from 2021, caused central banks to raise interest rates. On the one hand, some investment banks like Silicon Valey Bank and Signature Bank, which had invested a large part of their funds in government bonds just before the cornovirus pandemic at several times lower oproc. levels for these financial instruments, generated large financial losses and collapsed. On the other hand, thanks to high inflation, the real value of public debt in many countries is falling.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
Following the recent economic crises, i.e. the 2020 pandemic economic crisis and the 2022 energy crisis, will there soon be a financial crisis in the banking sector and/or a debt crisis in the public finances of countries?
What do you think about this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Warm regards,
Dariusz Prokopowicz
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The following 2 papers give some answers to your query, dear Duan Xian Xiang
Both of my papers contain relevant formulae as per your query Duan Xian Xiang
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How can cryptocurrency trading be formalised, institutionalised and made more secure?
How to build formalised and high-security transaction institutionalised cryptocurrency trading markets?
In recent years, many technology startups have based their growth and competitive advantage on business, technological, product, service, marketing or other innovations. Banks are reluctant to provide investment loans to emerging startups basing their growth on innovative technologies. In such a situation, innovative startups emerge and are financed through such external sources of funding as investment funds, business angels, securities issuance, crowdfunding and others. Crowdfunding will develop intensively in the future as an alternative to classic forms of external financing for business ventures. It is an alternative to the financial service offerings of financial sector institutions, particularly in the segment of financing innovative start-ups. Commercial banks operating within the framework of classic deposit and credit banking often avoid lending to innovative start-ups due to difficulties in assessing credit risk. In such a situation, crowdfunding can be a good solution to the problems of finding external funding. On the other hand, cryptocurrencies, which operate outside institutionalised and centralised financial systems, are growing in importance. Perhaps in the future, cryptocurrencies will displace traditional currency from online financial transactions between fintechs, financial institutions, innovative start-ups, online technology companies running social media portals and their customers, and between users of these online portals. In addition to this, it is becoming essential to improve the security of online financial transactions and settlements carried out through online mobile banking. In this connection, blockchain technology is developing as an application for securing online transactions and data transfer. An increasing number of large companies are announcing the creation of their own cryptocurrency. Some investment banks such as JP Morgan have announced the creation of their own cryptocurrency for settlements with key counterparties. The development and implementation of ICT information technologies, advanced data processing technologies Industry 4.0 and Internet technologies into the business activities of companies and enterprises facilitates the execution of financial operations on the Internet and ensures a high level of security of Internet data transfer. The development of technological innovations, ICT information technologies, advanced information processing technologies co-creating the current technological revolution Industry 4.0, financing through crowdfunding, securing online transactions with blockchain technology, the increase in the use of cryptocurrencies in these settlements, etc. are likely to be important determinants of the development of innovative, technological start-ups operating on the Internet and factors in the development of the knowledge economy in the years to come. Consequently, the development of open innovation is correlated with the issue of innovation and entrepreneurship development in the economy. A significant proportion of innovative startups develop their business model based on open innovation. On the other hand, in macroeconomic terms, the development of open innovation can be an important determinant of economic development in developing countries and in developed knowledge-based economies. In view of the above, research shows that the spread of open innovation and open knowledge bases is an important issue for building a sustainable economy in a technologically developed and developing country. A number of predictive studies show that cryptocurrencies will grow in importance in the future in financing various transactions and settlements carried out electronically, through the Internet, on social media, in investment banking, etc. Currently, many technology startups base their growth and competitive advantage on technological, product, service, marketing or other innovations. However, in order for the financing of new business ventures, innovative startups to develop using cryptocurrencies it is necessary to increase the scale of systemic formalisation and institutionalisation of transactions carried out using cryptocurrencies, to build formalised cryptocurrency markets and to increase the security of transactions carried out using cryptocurrencies in the future.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
Can the planned taxation of cryptocurrency transactions be a first step for increasing the scale of systemic formalisation and institutionalisation of cryptocurrency transactions, building formalised cryptocurrency markets and increasing the future security of cryptocurrency transactions?
How to build formalised and highly secure transaction institutionalised cryptocurrency trading markets?
How can cryptocurrency transactions be formalised, institutionalised and made more secure?
What is your opinion on this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Warm regards,
Dariusz Prokopowicz
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How can corruption in the national system of awarding non-refundable financial grants for innovative business ventures undermine the development of innovation and science?
In what way can corruption in the national system of granting non-refundable financial subsidies from the public finance system for innovative business ventures be an important element in the decline of the credibility of key public institutions supporting cooperation between business and science, a decline in the level of innovation in the economy, a decline in the effectiveness of the implementation of innovative solutions and patents created during research work, a weakening of the development of national science?
An important factor for the effective economic development of the country is the development of innovativeness, including the creation of new, innovative technologies and their implementation and development in business applications. Important factors for the activation of innovation and entrepreneurship in the economy include efficiently and reliably functioning systems of financial subsidies la innovative startups and companies and enterprises implementing and developing new, innovative technologies in business applications. However, when this system is flawed, does not function efficiently and reliably, is permeated with corruption and the extortion of funds from the state's public finance system, then the process of activating innovation and entrepreneurship in the economy does not work. This is particularly relevant in a paradise where investment banking is underdeveloped and, as a result, the development of innovative startups is, outside of grants from the national public finance system and outside of financial grants from the European Union, financed mainly on the basis of family loans, equity financing provided by business angels, specialised investment funds and crowdfunding available on the Internet. These are therefore not great opportunities to finance the development of innovative startups in a situation where commercial banks avoid lending to this type of entity. Commercial banks are unlikely to grant loans to finance the development of an innovative startup because they assess the credit risk as high for this type of business venture or they are also unable to precisely quantify the credit risk for startups that plan to implement and develop new, innovative technologies. In such a situation, a system of non-repayable financial subsidies coming from the public finance system and distributed systemically to such ventures can be of great help in activating the development of innovation and entrepreneurship. In order for this kind of system of distributing grants for innovative projects to work efficiently and effectively, the process of distributing funds under this kind of non-returnable grant schemes should be conducted in the form of competitions, during which genuinely innovative technological solutions should be selected. The competitions should be carried out taking into account the real expertise in innovation, reliable processes of analysis and evaluation of the level of innovation and determination of the level of usefulness, possibilities of practical applications, improvement of the effectiveness of economic processes, improvement of the level of profitability, obtaining specific positive effects of applying new innovations in a company or enterprise, etc. It is also necessary to carry out a number of market studies and analysis of the demand in specific markets, in specific spheres of economic activity, the demand from specific types of economic entities and/or citizens for products and services that will be created by the implementation and development in business of specific new innovative technologies. However, when corruption, including embezzlement of public money, occurs in this system of distributing financial subsidies then the whole system does not work effectively. When corruption occurs in public institutions distributing financial subsidies then the process of activating innovation and entrepreneurship does not work effectively. In view of the above, corruption in the national system of awarding financial grants from European Union funds for innovative business ventures may be an important element of a decrease in the credibility of key public institutions supporting cooperation between business and science, a decrease in the level of innovation in the economy, a decrease in the effectiveness of implementation of innovative solutions and patents created during research work, a weakening of the development of national science. In the country in which I operate, further cases of this type of corruption have been detected, which has been taking place in the National Centre for Research and Development, i.e. in the institution that distributes European Union financial grants to innovative start-ups and companies and enterprises implementing and developing new, innovative technologies in business applications.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
In what way can corruption in the national system of granting non-refundable financial subsidies from the public finance system for innovative business ventures be an important element in the decline of the credibility of key public institutions supporting cooperation between business and science, a decline in the level of innovation in the economy, a decline in the effectiveness of the implementation of innovative solutions and patents created during research work, a weakening of the development of national science?
What do you think about this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Best regards,
Dariusz Prokopowicz
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Corruption can have a significant impact on the development of innovation and entrepreneurship, and can ultimately limit a country's economic development opportunities. Here are some ways in which corruption can undermine innovation and entrepreneurship:
1.Lack of investment: Corruption often diverts resources away from productive uses and towards personal gain. This can result in a lack of investment in research and development, which is crucial for innovation and entrepreneurship.
2.Limited competition: Corruption can create an uneven playing field where only a select few have access to business opportunities, contracts, and licenses. This can limit competition and stifle innovation.
3.Weak institutions: Corruption undermines the rule of law and weakens institutions such as the judiciary and law enforcement agencies. This can create an environment where intellectual property rights are not protected, contracts are not enforced, and entrepreneurs do not feel secure in their business activities.
4. Lack of trust: Corruption erodes trust in government and institutions, making it more difficult for entrepreneurs to do business. This can lead to a lack of confidence in the market, a reluctance to invest, and a lack of motivation to innovate.
5.Brain drain: Corruption can also lead to a "brain drain" where talented entrepreneurs and innovators leave the country in search of a more stable and fair business environment.
All of these factors can limit the development of innovation and entrepreneurship, which are critical drivers of economic growth and development. By promoting transparency, accountability, and a level playing field, countries can create an environment that fosters innovation and entrepreneurship, leading to greater economic opportunities for all.
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What are the key determinants of building a risk management system for investing in cryptocurrencies conducted in speculative financial operations and investment transactions carried out on online trading platforms?
In recent years, there has been a rapid development of cryptocurrencies and their applications in online payments and settlements and their treatment as alternative investment instruments. Internet-based trading platforms are being developed, where speculative trading and investment using cryptocurrencies is expanding. Some investment banks, internationally operating corporations, social media sites are creating their own cryptocurrencies. Some investment funds have been investing part of their active funds in selected cryptocurrencies for many years. However, due to the lack of a developed institutional oversight system for transactions, payments and investments using cryptocurrencies. Consequently, speculative financial operations and investment transactions carried out on online trading platforms are characterised by a high level of investment risk. Consequently, it is important to build a risk management system for investing in cryptocurrencies.
In view of the above, I address the following question to the esteemed community of researchers and scientists:
What are the key determinants of building a risk management system for cryptocurrency investment conducted in speculative financial operations and investment transactions carried out on online trading platforms?
What do you think about this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Best wishes,
Dariusz Prokopowicz
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Building a risk management system for investing in cryptocurrencies involves identifying and addressing various potential risks associated with speculative financial operations and investment transactions conducted on online trading platforms. Some key determinants of building such a system include:
  1. Understanding the Market: A solid understanding of the cryptocurrency market is essential for managing risks associated with investments in cryptocurrencies. This includes knowledge of market trends, the factors that drive price movements, and an understanding of the technology behind cryptocurrencies.
  2. Setting Investment Objectives: Investors need to define their investment objectives clearly, including their risk tolerance and the expected return on investment. This can help guide investment decisions and inform the risk management strategies employed.
  3. Assessing Counterparty Risk: Investors need to assess the counterparty risk associated with their investments. This includes evaluating the reputation and financial stability of the online trading platform, as well as considering the risks associated with other parties, such as custodians and intermediaries.
  4. Implementing Risk Management Strategies: A comprehensive risk management strategy is essential for minimizing the potential risks associated with investing in cryptocurrencies. This may involve diversification of investments, setting stop-loss orders, and employing other hedging strategies.
  5. Monitoring Market Conditions: Investors must stay informed about market conditions and changes in the cryptocurrency market to identify potential risks and opportunities. This includes tracking market trends and staying up-to-date on news and events that may impact the cryptocurrency market.
  6. Regularly Evaluating and Adjusting Risk Management Strategies: Finally, investors need to regularly evaluate and adjust their risk management strategies based on market conditions and changes in their investment objectives or risk tolerance.
Here are some commonly used risk management strategies:
  1. Diversification: Diversification is a key risk management strategy that involves investing in a variety of cryptocurrencies and spreading investment across different sectors or asset classes. By diversifying, investors can reduce the risk of a single cryptocurrency or sector having a significant impact on their overall portfolio.
  2. Stop-loss orders: Stop-loss orders can be used to limit potential losses by automatically selling a cryptocurrency at a predetermined price. This strategy can be particularly useful during times of high market volatility.
  3. Hedging: Hedging involves taking positions that offset the risk of potential losses. For example, investors can hedge their cryptocurrency positions by buying put options, which allow them to sell a cryptocurrency at a predetermined price.
  4. Position sizing: Position sizing involves determining the appropriate size of each investment based on an investor's risk tolerance and investment objectives. By limiting the size of each position, investors can reduce the potential impact of any individual investment on their portfolio.
  5. Monitoring and adjusting: Monitoring market conditions and adjusting investment strategies accordingly is essential for effective risk management. Investors should regularly assess their investment strategies and make adjustments as needed to reflect changes in market conditions, investment objectives, and risk tolerance.
  6. Technical analysis: Technical analysis involves using chart patterns, indicators, and other market data to identify potential market trends and make informed investment decisions. This strategy can be particularly useful for identifying entry and exit points for cryptocurrency trades.
Key elements of an INSTITUTIONAL RISK MANAGEMENT system for investing in cryptocurrencies:
- Risk Management Policies and Procedures: Institutional investors should establish clear risk management policies and procedures to guide investment decisions and manage risk. These policies should include guidelines for selecting cryptocurrencies, setting investment objectives, and monitoring market conditions.
- Investment Committee: An investment committee comprised of experienced professionals with diverse backgrounds can help ensure that investment decisions are informed and well-considered. The committee should be responsible for setting investment policies and monitoring performance against established benchmarks.
- Due Diligence: Institutional investors should conduct thorough due diligence on potential cryptocurrency investments to assess risks and identify potential red flags. This may include evaluating the reputation of the cryptocurrency, conducting security audits, and assessing the regulatory environment.
- Diversification: Diversification is a key risk management strategy for institutional investors. By investing in a variety of cryptocurrencies and spreading investments across different sectors or asset classes, institutional investors can reduce the risk of a single cryptocurrency or sector having a significant impact on their overall portfolio.
- Risk Assessment and Monitoring: Institutional investors should regularly assess and monitor risks associated with their cryptocurrency investments. This includes monitoring market conditions, tracking the performance of individual cryptocurrencies, and identifying potential risks and opportunities.
- Contingency Planning: Institutional investors should establish contingency plans to prepare for potential market disruptions or other events that could impact their cryptocurrency investments. This may include setting up risk reserves, establishing exit strategies, and developing contingency plans for managing liquidity.
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مؤتمر جدة الدولي الرابع للبحوث التطبيقية
4th Jeddah International Conference on Applied Research (ICAR-2023)
In Jeddah, on 20-23 June, 2023
جدة ٢ إلى ٥ ذُو ٱلْحِجَّة ١٤٤٤
Organized by:
Qura Al-Saud Research Society for Applied Research (QARSAR), Jeddah
Kingdom of Saudi Arabia
جمعية قرى السعود للبحوث التطبيقية جدة ، المملكة العربية السعودية
Dear Scholar,
Welcome to ICAR-2023,
4th Jeddah International Conference on Applied Research (ICAR-2023) is a prestigious event organized with a motivation to provide an excellent international platform for the academicians, researchers, engineers, industrial participants and budding students around the globe to share their research findings with the global experts. ICAR-2023 will be held at QARSAR conference auditorium in Jeddah, 20-23 June 2023.
The key intention of ICAR-2023 is to provide the opportunity for the global participants to share their ideas and experience in person with their peers expected to join from different parts of the world. In addition, this gathering will help the delegates to establish research or business relations as well as to find international linkages for future collaborations in their career path. We hope that ICAR-2023 outcome will lead to significant contributions to the knowledge base in these up-to-date scientific fields in scope.
Note: Abstract submission deadline is 10th February, 2023, and abstract submission is acceptable by using online form available at; https://qarsar.org/current-conference/
Publication opportunity in the following Journals:
  • International Journal of Energy Economics and Policy - (SCOPUS, ABDC)
  • Science, Technology and Society - (SCOPUS, WOS, ABDC)
  • Journal of Applied Science and Engineering - (SCOPUS, WOS, ABDC)
  • Kuwait Journal of Science (SCOPUS, WOS, ABDC)
  • Early Science and Medicine - (SCOPUS, WOS, ABDC)
  • ScienceAsia - (SCOPUS, WOS)
  • Computer Languages, Systems and Structures - (SCOPUS, WOS)
  • Chilean Journal of Agricultural and Animal Sciences - (SCOPUS, WOS, ABDC)
  • Asia Pacific Journal of Tourism Research - (SCOPUS, WOS, ABDC)
  • Psychotherapy and Politics International - (SCOPUS, WOS)
  • Journal of Mathematical and Fundamental Sciences - (SCOPUS, WOS)
  • International Journal of Language and Culture - (SCOPUS, WOS)
  • History of Education Review (SCOPUS, WOS, ABDC)
  • Journal of Business Finance & Accounting (SCOPUS, WOS, ABDC
The participants will have the following privileges;
  • Publication of Accepted Papers in Partner Journals
  • Welcome Reception
  • Printed Name Card
  • Conference Kit
  • Participation in the Technical Sessions
  • Attending All Conference Sessions and/or Tutorials
  • Lunches
  • Tea/Coffee Breaks and Networking Activities
  • Printed Participation & Presentation Certificate
  • Visa Letter to Embassy or Issuance of Visa Letter Depending On Country Need
  • 4 Nights and 5 Days Accommodation in Guest Houses.
  • Single Day City Tour to Makkah
  • COVID-19 Test Before Entering in Makkah
  • Shuttle to Makkah from Jeddah
  • Airport Transfer
For more details please visit https://qarsar.org/current-conference/.
Regards,
Prof. Dr. Hatim Bin Hijazi Maktoom
Conference Chair, ICMI-2023
WhatsApp/Call: +966 5756 46799
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600 pounds is equal to RM3152.03. I wonder if this conference is really a platform to help postgraduates or to boost capitalism education. Sadly it is organised by Muslim Nation and where Kaaba is located. Allah knows best. Likely, any link to MDPI, Frontier, or Hindawi is now banned by China and Indonesia due to a series of predatory and controversial publications. Allah knows best.
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What forms of external financing of pro-climate and pro-environmental economic ventures within the framework of green finance dominate now and will dominate in the future?
In recent years, various forms of financing pro-environmental business ventures within the framework of green finance have been growing in importance.
Within the framework of green financing of pro-environmental and pro-climate economic ventures, e.g. in the development of renewable and emission-free energy sources, improvement of energy transmission and storage systems, development of sustainable organic agriculture, improvement of waste sorting and recycling systems, construction of wastewater treatment plants and recovery of clean water, development of electromobility, zero-energy construction, etc. Commercial banks offer green loans, internationally operating investment banks and investment funds provide financing combined with equity participation in green investment, enterprises and companies provide green loans to their subsidiaries, the state offers green subsidies offered by government agencies as part of programs to activate the green transformation of the economy. At the UN Climate Summit COP27 in Sharm el-Sheikh, Egypt, which began on 6.11.2022, discussions are expected to focus on financial needs and commitments, financing pro-climate and pro-environmental business ventures within the framework of green finance, and shaping the tools needed to respond to the damage that climate change is causing. At the aforementioned COP27 Climate Summit in Egypt, delegates from nearly 200 countries are holding lectures and discussions on the issue of financial compensation to poor countries for the growing damage from global warming. This is a new topic on the agenda, appearing at the UN Climate Summit COP27 for the first time in a decade, i.e., since the start of such conferences and climate talks. At last year's UN Climate Summit COP26 in Glasgow, Scotland, one of the new topics and agreements was a commitment to end forest deforestation by the end of the current decade, i.e., by 2030. However, in connection with the new agenda topic that emerged at UN Climate Summit COP27, viz. the issue of financial compensation to poor countries for the growing damage of global warming is an important issue that needs to be elaborated is the identification of key sources of financing, types of external financing within the framework of green finance, clarification of the objectives of financial support, i.e. the key types of negative effects of the progressive global warming process in countries characterized by low levels of economic development, low incomes and the ability to implement pro-climate and pro-environmental economic projects on their own. First of all, most of the poor countries, characterized by low income and low level of economic development are located in the tropical and subtropical climate zones and therefore in zones particularly vulnerable to the negative effects of climate change. In these countries, the problem of droughts is intensifying, and they are becoming more severe and prolonged every year. Droughts, declining rainfall, declining supplies of clean water are serious problems for agriculture, causing a decline in the production of agricultural crops and a growing problem of food shortages. In a large part of the mentioned poor countries, large-scale predatory logging has been implemented in recent years, the scale of deforestation has significantly increased, including natural biodiverse forest ecosystems, various forest formations, including, among others, the largest natural complex of forest ecosystems, known as the lungs of the planet, i.e. the rainforests of the Amazon. In this regard, it is a necessary issue to increase the scale of international cooperation and assistance regarding the transfer of green technologies, capital to enable the pro-environmental and pro-climate transformation of the economy, the realization of sustainable development goals, the implementation of investments enabling the development of renewable and emission-free energy sources, etc. Rich countries (mainly of the north, temperate climate zone), characterized by a high level of economic development, high incomes, high levels of productivity and equipment of production processes with modern technologies should help poor countries (of the south and the tropical, subtropical climate zone) to a greater extent, to reduce the scale of disparities, differentiation in the issue of sustainable development, activities and investments implemented to carry out pro-climate transformation of the economy and reduce the scale of the negative impact on the economy, agriculture and people of the progressive process of global warming and reduce the scale of the operation of the negative effects of this process. This is a key issue of international cooperation for the implementation of the concept of sustainable economic development, taking into account environmental, climate and energy policies on an international scale. The problem of global warming is a global problem and should be solved on a global scale through the development of international cooperation. This is part of the developing pro-climate and pro-environmental globalization.
In view of the above, I address the following question to the esteemed community of researchers and scientists:
What forms of external financing for pro-climate and pro-environmental green finance business ventures are dominant now and will be in the future?
What forms of external financing of pro-climate and pro-environmental economic ventures within the framework of green finance currently dominate internationally?
What are the international forms of external financing of green economic transformation?
What do you think about this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Best regards,
Dariusz Prokopowicz
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Green external financing can be direct or indirect: Direct is a connection between two parties between borrowers and lenders without the intervention of a financial intermediary in exchange for credit risk guarantees, and the loan is in the form of financial instruments or direct securities such as green shares and bonds. And indirect green external financing is done through a financial intermediary such as commercial banks, insurance companies, savings and loan associations to finance green projects
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On what determinants are based the credit risk management procedures applied to green loans that are granted by commercial banks to finance pro-environmental and/or pro-climate, sustainable, green business ventures?
In recent years, commercial banks have been providing financing in the form of loans for pro-environmental, pro-climate, green investment projects and/or for the development of sustainable economic activities. Such credit offerings by commercial banks are referred to as green loans. Since in recent years the issue of the climate crisis is becoming one of the key topics and influential factors vis-à-vis the future development of civilization, so the scale of pro-environmental and pro-climate awareness of citizens is growing. More and more companies and enterprises are adding to their missions and development strategies the issue of achieving certain sustainable development goals and implementing pro-environmental business ventures. More and more economic entities are complicit with their green business in the issue of carrying out a pro-environmental and pro-climate transformation of the classic growth, brown, linear economy of excess to a sustainable, green, zero-carbon zero-growth and closed-loop economy Commercial banks have been building and improving their credit risk management procedures for many years, in Poland since about the mid-1990s, including procedures for analyzing the creditworthiness of potential borrowers applying for a bank loan and analyzing the credit risk taken by the bank in the situation of granting a loan. However, the growing pro-environmental and pro-climate economic activities, green investments, green businesses, green finance, green credit is a relatively new issue in Poland. Pro-environmental and pro-climate business ventures have been developed in Poland for a short time and are still a small part of the overall economy. Pro-environmental and pro-climate transformation ventures in the energy sector, including primarily the development of renewable and emission-free energy sources, have been developing particularly slowly in Poland over the past few years. The policy of blocking the development of renewable and zero-emission energy sources and the small relative to the possibilities financial subsidies offered to citizens under government public assistance programs have led to a low scale of green energy transformation, a high share of dirty combustion energy in the energy source mix, a low level of energy security and a high scale of negative effects of the energy crisis in the country. As a result, commercial banks in recent years have begun to offer green loans, with the help of which borrowers implement pro-environmental, pro-climate, pro-environmental business ventures within the framework of their chosen new strategy and mission, according to which they conduct green business, pursue sustainable development goals and their business activities are characterized by pro-environmental corporate responsibility. In terms of banking credit risk management procedures, a particularly important issue is the measurement of risk, the analysis of individual impact factors, the probability of their occurrence, the scale of negative impact on the borrower's enterprise, the scale of impact on the finances of the business entity, etc. Considering the implementation of pro-environmental, pro-climate, green investment projects, banks should also take into account new risk categories related to the specifics of sustainability, pro-environmental, etc. of green business ventures and investment projects. When new green technologies and eco-innovations are applied to investment projects, new categories of operational and other risks emerge. Various categories of environmental risks may be taken into account and arising from the ongoing process of global warming and the various negative effects of climate change taking place, as well as increasing levels of environmental pollution, dwindling supplies of clean water, increasingly severe periods of drought, etc. Such new categories of risk in a situation of high levels may cause the bank to change its credit policy and no longer lend to certain types of business ventures. For example, in some countries, commercial banks avoid lending to tourist companies operating in the mountains, hotels, restaurants, companies operating ski lifts and ski slopes due to the falling scale of snowfall in the winter. On the other hand, the emergence of new risk categories can be an important factor in the changes made in the credit risk management process, including those relating to green lending activities.
In view of the above, I address the following question to the esteemed community of researchers and scientists:
On what determinants are based the credit risk management procedures applied to the green loans that are granted by commercial banks to finance pro-environmental and/or pro-climate, sustainable green economic ventures?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Best regards,
Dariusz Prokopowicz
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Dear Darius,
Very good question.
It feels to me, being feeling under hopeless kind of state, looking for any possibilities! Pardon me I see as such!
Banking is essential . Yes, why not to go green!
"the growing pro-environmental and pro-climate economic activities, green investments, green businesses, green finance, green credit is a relatively new issue in Poland. Pro-environmental and pro-climate business ventures have been developed in Poland for a short time and are still a small part of the overall economy. Pro-environmental and pro-climate transformation ventures in the energy sector, including primarily the development of renewable and emission-free energy sources, have been developing particularly slowly in Poland over the past few years. The policy of blocking the development of renewable and zero-emission energy sources and the small relative to the possibilities financial subsidies offered to citizens under government public assistance programs have led to a low scale of green energy transformation, a high share of dirty combustion energy in the energy source mix, a low level of energy security and a high scale of negative effects of the energy crisis in the country. As a result, commercial banks in recent years have begun to offer green loans, with the help of which borrowers implement pro-environmental, pro-climate, pro-environmental business ventures within the framework of their chosen new strategy and mission, according to which they conduct green business, pursue sustainable development goals and their business activities are characterized by pro-environmental corporate responsibility".
I wrote previously suggestion Ruskins theory with Hayeks to be brought in implementing. We certainly needs political parties leading government to be into the scene for safety for justice by political correctness. Globalization has to be sustained.
Corporal Banking cannot be separated per it is the vital (cooking pot) the institute of fiscal brewery, We can say. Then again, to totally rely on corporal Banking system without governing linking, law making, would you expect to trust upon?
Surely not, as we understand the monopoly game system and risky of beaurocratic manipulations.
Loans we talk about, the banks borrow from Landers. Those borrow there are two splits. A) Totally burdened down under debt in failing to ruling up. b) fill up pockets at the cost of labourers deprivation and sweat.
Then again. Why Individuals alone to take on burden of borrowing for environmental and climatic cause ?
Certainly time has come to refer back to traditionalism with the techno advancement, to be bringing the knowledgeable and wise, into policy making, board of director, and observations, for example of scientific and academics to be brought into also.
Regards,
Fatema Miah
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What are the main items for proper due diligence, when dealing with special purpose vehicles or SPVs for construction projects?
What are the main steps for effective due diligence of an SPV to be created for a construction project?
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I think the following paper will help you out in this regard:
Types and functions of special purpose vehicles in infrastructure megaprojects
T Sainati, G Locatelli, N Smith, N Brookes… - … Journal of Project …, 2020 - Elsevier
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What is the technique which I use to convert the annual ESG score data to (Monthly, weekly, or daily data) with good accuracy?
AND how can I apply via Python?!
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I agree with Yongkang Stanley Huang and Michel Charifzadeh. Because ESG score is not a periodic data ( such as contineous data) rather a score usually provied with symbols such as A, B and C...
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Is green finance conducted under green banking, green lending by commercial banks truly green, i.e. pro-climate, pro-environment and sustainable?
To what extent does green lending by banks contribute to the development of pro-environmental, pro-climate, sustainable business ventures?
Are commercial banks that advertise themselves as green banks conducting sustainable banking with a portfolio of banking products really green banks?
Do commercial banks that have added sustainability, climate protection and planetary biosphere protection issues to their new development strategy and/or bank mission promoted in the media really provide many green loans that finance real pro-climate, pro-environmental, sustainable economic ventures conducted by borrowers?
Have the credit risk management procedures resulting from green lending been adequately adapted to the ongoing process of global warming, climate and biosphere change and other impacts of this process?
When assessing the creditworthiness of entrepreneurs planning to realise viable pro-climate, pro-environmental, sustainable business ventures, do banks take into account the issue of the risk of climate change and the specific impacts of this process that may affect the green investment planned for implementation?
How do commercial banks advertising themselves as green, sustainable banks improve their lending procedures and green credit risk management process?
What do you think?
What do you think about this topic?
Please reply,
I invite you all to discuss,
Thank you very much,
Regards,
Dariusz Prokopowicz
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One of the principles of credit risk is to establish a long relationship with the customer, which means that the bank can know the policy and method of spending the loan by the loan because it has historical information about the borrower.
The bank can also set a condition, which is to follow the progress of the loan and where it was spent by putting forward the idea that there are risks to the borrower in spending the loan. Through this principle, it can follow the progress of the loan and the place of its spending and identify whether it was spent in the direction and location of green projects or what.
My greetings ( Dariusz Prokopowicz )
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If you were managing a startup fund and had USD 1 billion to invest, what kind of business ventures would you fund?
What kind of startups would you co-found? What types of industries, themes, business development goals would you financially support if you were managing a fund investing in startups?
In which business fields of operating or start-ups would you financially support and develop?
What do you think?
Please reply,
I invite you all to discuss,
Thank you very much,
Greetings,
Dariusz Prokopowicz
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Irrespective of the industry (or sector or theme), investors favor star-ups that :
  • Make clear the passion, commitment, and integrity of the founders;
  • Suggest that the market opportunity being addressed (and so the potential for the company) will grow;
  • Demonstrate a well thought-out business plan and evidence early progress toward its accomplishment;
  • Embody interesting technology or intellectual property;
  • Are appropriately valued, with reasonable terms; and
  • Offer the promise that additional rounds of startup funding can be raised if continuing progress is made.
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Innovative Startup & Venture Capital?
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This guide will give you a better context to understand the language of startups, venture capitalists, angel investors, and incubators.
If you wish to pursue a career in Venture Capital or in any startup, knowledge of these commonly used VC terms may be beneficial: https://in.prosple.com/resources/common-venture-capital-terms?utm_medium=social&utm_source=researchgate
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Dear All,
I’m conducting an event study for the yearly inclusion and exclusion of some stocks (from different industry sectors) in an index.
I need to calculate the abnormal return per each stock upon inclusion or exclusion from the index.
I have some questions:
1- How to decide upon the length of backward time to consider for the “Estimation Window” and how to justify ?
2- Stock return is calculated by:
(price today – price yesterday)/(price yesterday)
OR
LN(price today/price yesterday)?
I see both ways are used, although they give different results.
Can any of them be used to calculate CAR?
3- When calculating the Abnormal return as the difference between stock return and a Benchmark Return (market return), The market (benchmark) return should be the index itself (on which stock are included or excluded) ? Or the sector index related to the stock?
Appreciate your advice with justification.
Many thanks in advance.
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Hi there, I am using Eventus software and I am wondering how the software computes the Market index in order to calculate abnormal returns?
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I propose the following research topics in the field of behavioral finance operating on securities markets:
Analysis of the correlation of changes in the market valuation of securities on the stock exchange with the economic and financial situation of the issuer's company and external factors such as:
- changes in interest rates of central banking and commercial investment instruments offered by banks,
- changes in the level of income of individual stock investors,
- business cycle in the economy and in the sector in which the company operates, issuer of securities,
- increase in the importance of technical analysis in the face of fundamental analysis in a situation when the share of stock exchange investors using computer programs used for technical analysis increases,
- increase in the importance of stock exchange transactions concluded by computerized transaction systems working on behalf of investment banks, including transactions that last for a short period of time, sometimes a few seconds or part of a second, but for large amounts of funds,
- securities and brokerage houses run by the stock exchange and individual issuers, advertising and image campaigns on the occasion of the public offering of a new issue of acacia or corporate bonds or in other situations,
- change of the state's economic policy, change of the tax system regarding investment in securities, eg by introducing or reducing tax on capital income,
- change in the ratio of investors from foreign exchange investors to domestic investors in connection with the activities of international rating agencies, funds and investment banks.
In view of the above, what other interesting research topics do you offer in the field of behavioral finance operating on securities markets?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
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Dear Vivek Pandey,
Thanks for your suggestions for research topics in the field of behavioral finance. The topics are interesting and developmental. In terms of the behavioral consequences of blockchain integration in financial transactions, interesting research can be carried out on improving the security of transactions.
Thank you very much,
Best wishes,
Dariusz Prokopowicz
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Something that is related to Accounting and Business Finance course degree. I'm interested in accounting related to technology. Marketing not really my interest. Maybe the issues that has been occurring that is accounting related. Or cybersecurity related accounting. I want to make sure that it benefits someone. The solutions to solved I will think of it.
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A good topic would be on the Importance of Ethics on cybersecurity to mitigate risks etc.
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Banks are reluctant to provide investment loans to newly established startups based on their development on innovative technologies. In such a situation, innovative startups are created and financed from such external sources of financing as investment funds, business angels, issue of securities, crowdfunding and others. Which of these external financing sources predominate in the financing of the assumption and development of innovative startups?
In view of the above, I am asking you the following question:
What sources of external financing are used by innovative startups?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
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Innovative project is the govt will make financing
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How would you design a similar or different futurological energy and civilization project, containing renewable energy sources of renewable energy and recreation of natural conditions, referring to natural ecosystems, which after years would gain the possibility of self-recreating?
For example, whether with unlimited investment funds or whether it would be possible to achieve a sustainable economic ecosystem from scratch to achieve economic efficiency at least at the zero growth level as follows: Can a large solar power plant be developed in the desert and water obtained from energy to develop agricultural production and plant ecosystems, including forest ecosystems, which, after several dozen years, could almost function themselves? An important factor would be the possible progressive climate change in a given area and the geographical scope of the area covered by this investment project.
In some science fiction movies there are scenes that suggest that it is possible, economically justified and real. However, the vision presented in science-fiction movies to create real projects can, however, be a very big difference. But many futurological visions that were created in the past have been implemented, so it is justified to undertake such attempts to create further futurological projects.
In connection with the above, I would like to ask you the following question: How would you design energy if you had unlimited financial resources? How would you design a similar or different futurological energy and civilization project, containing renewable energy sources of renewable energy and recreation of natural conditions, referring to natural ecosystems, which after years would gain the possibility of self-recreating?
Please reply. I invite you to the discussion
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Dear Farid Ali David,
Thank you for your valuable substantive contribution to our discussion on innovative projects implemented in the field of energy technologies.
Thank you, Regards,
Dariusz Prokopowicz
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We know that with Basel all banks adopt a rating system to evaluate their loans and to calculate their regulatory capital. companies have always had problems with the rating calculated by banks and now with COVID-19 what will happen?
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It's been 9 months since my last comment. Since then, the sale of loans in banks has decreased. The SARS-CoV-2 (Covid-19) coronavirus pandemic has caused an economic recession, a decline in investment and a decline in demand for economic loans. In addition, the anti-crisis public financial aid addressed to enterprises resulted in an excess of money that did not generate additional investments. Even the lowered interest rates did not help to generate a significant increase in the economic activity of enterprises.
Regards,
Dariusz Prokopowicz
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Hello, could any kind soul pls recommend me reading material on "Cross subsidization model for social enterprise financing"?
I am working on a project that addresses how social businesses finance themselves through revenue cross-subsidization in developing economies.
thanks in advance.
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Thank you Lilian Mboya
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Why did the governments of many countries, despite a good economic situation, not reduce the debt of public finances of the state and budget deficits in the state budgets?
Unfortunately, for several decades in most countries permanently budgets of public finances, state budgets are unbalanced, they are usually in deficit. Such a situation generates the risk of excessive indebtedness and loss of liquidity in public finances of the state. In a good economic situation, deficits tend to fall, but in a period of declining economic growth, deficits are rising and there is a risk of a public finance crisis. In such a situation, the state, in order to maintain liquidity, raises interest rates on treasury bonds in order to find buyers from domestic and foreign investors. This problem appeared in the countries of the south of Europe after the appearance of the global financial crisis in the autumn of 2008.
In connection with the above, the governments of individual countries should from year to year reduce the state of public finance debt, ie reduce public debt and budget deficit. However, for many years, in many countries, public debt and budget deficit, despite good economic conditions, were not reduced despite good economic growth. Why despite the good economic situation in the 90s and the beginning of the 21st century, ie before the emergence of the global financial crisis in 2008, public debt of the state finances and budget deficit in the state budget were not significantly reduced or reduced?
A fully balanced state budget should not have any deficit. Why do not the governments of many countries care about this issue and forward this unresolved problem of state funs to the subsequent ruling teams? Perhaps the answer to this question arises from this question. Well, usually several summer political cycles of exercising power by a specific government team are not correlated with the period of the business cycle.
Do you agree with me on the above matter?
In the context of the above issues, I am asking you the following question:
In connection with the above, I ask: Why did the governments of many countries, despite a good economic situation, not lower the debt of public finances of the state and budget deficits in the state budgets?
Please reply
I invite you to the discussion
Thank you very much
Dear Friends and Colleagues of RG
This issue is described in the following publication:
I invite you to discussion and cooperation.
Best wishes
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Cutting government spending can increase the budget deficit at zero interest rates according to a standard New Keynesian model, calibrated with Bayesian methods. Similarly, increasing sales taxes can increase the budget deficit rather than reducing it. Both results suggest limitations of ‘austerity measures’. At zero interest rates, running budget deficits can be either expansionary or contractionary depending on how they interact with expectations about long‐run taxes and spending. The effect of fiscal policy action is thus highly dependent on the policy regime. A successful stimulus, therefore, needs to specify how the budget is managed not only in the short but also medium and long run... Denes, M., Eggertsson, G. B., & Gilbukh, S. (2013). Deficits, public debt dynamics and tax and spending multipliers. The Economic Journal, 123(566), F133-F163.
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Companies were already in crisis before the pandemic. What will happen now that many workers are layoffs and sales have fallen?
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Many businesses operating in sectors where sales revenue has decreased due to the SARS-CoV-2 (Covid-19) coronavirus pandemic, will report either financial losses or small gains in 2020 reports. The scale of the losses will be correlated with many factors. Among others, with the following factors:
1. The scale of correlation between the development of the SARS-CoV-2 (Covid-19) coronavirus pandemic and the consumption of specific types of products and services by citizens.
2. Possibilities of developing sales for citizens of particular types of products and services via the Internet.
3. The scope of time and the level of rigors for the introduced lockdown of the economy, i.e. the legally required temporary closure of shopping centers, service plants, restaurants, hotels, cinemas, museums, city parks, schools, kindergartens, offices, etc.
4. Scale of citizens' compliance with state-established anti-pandemic and sanitary safety instruments (eg wearing face masks, home quarantine, restrictions on the movement of citizens in public places, etc.).
5. Information policy shaped by public institutions and central states dealing with the sphere of public safety and health, and information on the SARS-CoV-2 (Covid-19) coronavirus pandemic disseminated socially through citizens on social media portals.
6. The level of financial support for enterprises operating commercially by the state, from the state's public finance system, in order to maintain their continuity of operation during the pandemic, despite the real decline in the scale of economic activity (as part of the interventionist socio-economic policy and the so-called Anti-Crisis Shields).
7. The period of the SARS-CoV-2 (Covid-19) coronavirus pandemic, the scale of the pandemic development rate, the number of new coronavirus infections and deaths caused by severe Covid-19 disease. Best wishes,
Dariusz Prokopowicz
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The level and organization of the financing system for research and development is one of the most important development-related issues in contemporary knowledge-based economies.
(The continuation of these considerations can be found in the comments below).
In view of the above, the current question is: The issue of financing research and development works from the funds of the national public finance sector?
Please, answer, comments. I invite you to the discussion.
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Revered Professor Dariousz Prokopowicz,
This is my opinion. The finance for R&D is to be allocated by the Government that is usual practice but now a days the Private Organisations are ready to find for R&D in order to strengthen the system functioning well.
It is possible in Developed Countries where as in the Developing Countries situation are totally different. In such case, it is welcomed to finance from Private Institutions also.
Regards
Senapathy
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How are investments in renewable energy sources financed in your country?
Are pro-ecologic investments financed in your country mainly by commercially operating enterprises or from the public finance system of the state?
Will the state co-finance new pro-ecological investments from the state budget funds in a situation of low-cost ecological projects developing renewable energy sources?
In my opinion, in the situation of low profitability of investments in pro-ecological undertakings, in the absence of pro-ecological projects financing by the private sector, the state should co-finance new pro-ecological projects from public funds, including primarily the development of energy based on renewable energy sources, infrastructure for development electromobility, etc.
Do you agree with my opinion?
Please reply
Best wishes
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Dear Prof. Dariusz Prokopowicz
I agree with your opinion
In my country (Iraq) there is no support or investment for renewable energies..
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Kindly, could you suggest references in Business and / or Finance studies associated methodologies ? Thanks in advance
What are typology of reviews scientific papers in Business and Finance studies associated methodologies ? And the mapping review is one independent type or is one of the known types?
There are many review types and associated in Business and Finance studies such as:
1. Critical analysis
2. Systematic review analysis
3. Narrative review
4. Structural review.
.
.
.
.
What else, .... ?!
Also the the mapping review can be categorized as systemic review or independent type?
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Synthesizing information
systems
informationsystems
knowledge:
A
typology
of
literature
reviews
Guy
Pare ´ a,*,
Marie-Claude
Trudelb,
Mirou
Jaanac,
Spyros
Kitsioud
aChair
in
Information
Technology
in
Health
Care,
HEC
Montre ´al,
3000,
Cote-Sainte-Catherine
Road,
Montreal,
Quebec
H3T
2A7,
Canada
bDepartment
of
Information
Technology,
HEC
Montre ´al,
Canada
cTelfer
School
of
Management,
University
of
Ottawa,
Canada
dCollege
of
Applied
Health
Sciences,
University
of
Illinois
at
Chicago,
United
States
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In your country, do banks cease to finance investment projects related to traditional energy based on the burning of minerals?
Do banks start to finance environmentally friendly investment projects in your country, thus supporting the processes of transformation of the economy towards the implementation of sustainable pro-ecological development?
Please, answer, comments.
I invite you to the discussion.
I pointed out the high level of relevance of the issue taken up in the above question in the article:
Please respond with what do you think about the issues described in this article?
Best wishes
Dariusz Prokopowicz
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Dariusz Prokopowicz till now, Iraqi banks could not launch such projects. The reason behind that is business environment in Iraq, where no eco-friendly project.
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What are the variables that venture capital takes into consideration when choosing the company in which to invest?
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Business theories and empirical studies have identified so many variables that venture capital takes into consideration when choosing the company in which to invest such as the capacity of the business partners, risk & profitability, long-term sustainability, cultural aspects and innovative ideas for the project. However, the last variable is the most important factor. Anyway, you can go through the following articles to find out more.
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We are coming to the end of a study and it contains some determinants over shaping methodology and research design. We call them a set of assumptions regarding and comparing the extant literature studies. But we already created a methodology section and filled up with our methodology, data set and main charecteristic of the population etc.
So finally what's your opinion in which section do we have to locate these determinative assumptions? To the end of introduction section or somewhere else?
Thanks in advance,
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It should be at the start of the Hypothesis section.
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Is crowdfunding common in your country? Many Businesses aware of this online platform?
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Yes, in Russia, crowdfunding has recently become widespread around 2012. Currently in Russia there are more than a dozen crowdfunding platforms in various areas. The most popular are the platforms in the organization of financing of creative and original projects in any field of activity - Planeta.ru and Boomstarter.
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What are the documents normally required by banks when a micro or small enterprise apply for business loan in your country?
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Tones of them. 99% of banks in Croatia are foreign owned and are not particulary interested in crediting business, especially SMEs.
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Commercial banks are interested in financing pro-ecological projects, also referred to as green projects, if they are profitable projects. In many countries, commercial banks provide commercial loans for the implementation of economic projects in the field of green projects if the borrower has creditworthiness.
It is increasingly common for commercial banks to finance economic projects in the field of green projects for marketing purposes and to improve their image in the context of interbank competition.
In connection with the above, I am asking you the following question:
Should commercial banks increase the scale of financing pro-ecological projects?
Please reply
I pointed out the high level of relevance of the issue taken up in the above question in the article:
Please respond with what do you think about the issues described in this article?
Best wishes
Dariusz Prokopowicz
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In my opinion, both large investment banks as well as many smaller commercial, deposit and credit banks should increase the scale of financing of pro-ecological projects every year. This issue is particularly important in connection with the progressive global warming of the Earth. Global warming is recognized by many scientific centers as one of the greatest threats to humanity and life on Earth in the perspective of the end of the 21st century. Therefore, it is necessary to develop environmentally friendly projects, such as the development of renewable energy sources, reduction of classic energy sources based on mineral incineration, improvement of waste segregation techniques, recycling, development of electromobility, sustainable agricultural production, environmental protection, etc., by all possible means.
In connection with the above, I am asking you the following question:
Should commercial banks increase the scale of financing pro-ecological projects?
Please reply
Best wishes
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In my opinion, in the future the most important proecological technologies that should be improved and implemented are renewable energy technologies based on solar energy. Solar power plants should be developed. Commercial banks should provide loans for these purposes. However, in order for commercial financing programs to develop, the role of the State as potentially the main subject of financing large pro-ecological energy projects is also important. Similarly with nuclear energy, which is so very expensive to build, that without financial support from state finances, it would often not be possible to build a nuclear power plant.
In view of the above, I would like to ask you: How should the financing of the development of environment-friendly technologies be developed?
Please, answer, comments. I invite you to the discussion,
I pointed out the high level of relevance of the issue taken up in the above question in the article:
Please respond with what do you think about the issues described in this article?
Best wishes
Dariusz Prokopowicz
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I agree about the state support and financing the environment friendly technologies. I like the EU support for housing isolation investments and solar energy implementation in Croatia, for example.
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Generally, the stock price indices are classified into two different categories namely global indices and national indices, the national indices, which are more commonly quoted, represent the performance of the stock market of given country such as Brazil's BOVESPA, India's NSE or BSE, China's Hang Seng or the Shanghai SE Composite Index...etc, these type of indices are provided by the local financial authorities. The global equity indices, on the other hand, are calculated and provided by world agencies such as Thomson DataStream, Standard and Poor, Morgan Stanley...etc. In addition, these agencies also offer stock price indices at country level, the methodology used to calculate the stock price index may differ from agency to another, which may affect the return and volatility. For instance, the datastream market indices offer stock prices indices for 53 countries all over the world, each index covers at least 75-80% of market cap of the publicly listed companies in the country. The Standard and Poor agency has its own indices known as the Broad Market Index (BMI) and covers most of the developed and emerging countries, the method used by Standard and Poor to calculate the stock price index is called the adjusted float or free float methodology, which according to "Investopedia" is the best measurement of stock price movements. The same methodology is used by other agencies such as Morgan Stanley (MSCI), Financial Times and Stock Exchange (FTSE). The investors frequently use these indices as benchmarks for their equity portfolios.
As previously mentioned, these global agencies maintain a record of stock price index for many countries, even sometimes for period longer than the periods covered by national indices.
So, are these global indices suitable for academic researches and papers? Is it used in academic researches, especially in researches concerned with stock prices volatility? or it can only be used as benchmarks for the investors' portfolios?
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Dear Aboubakr
The choice of national stock indices versus global stock indices depends on the portfolio performance you are measuring. That is, if your portfolio is comprised of stocks from around the world then the better fitting benchmark is a global stock index. If instead the investor's portfolio is limited to 1 country then the national stock index is more appropriate to compare. Note, the global stock index return and risk will be made up of both investment risk as well as currency risk, especially the home currency of the investor's (owner) portfolio.
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1. ABC had a positive and NON-SIGNIFICANT impact on XYZ
2. ABC had a positive and NOT-SIGNIFICANT impact on XYZ
3. ABC had a positive and INSIGNIFICANT impact on XYZ
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None is adequate but i can see how attempting to meet an editor‘s restriction on page or words will make one to squeeze in that. When one is writing to
other professional who understand restrictions by editor, one tries to get in the most Important results first before worrying about those that supports the null.
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Currently I'm doing a research on IPO underpricing? for those who are not familiar with the concept, IPO underpricing happens when companies sell equities in the market for the first time, they tend to set the offer price at low level which allows their equity price to increase after the first trading day and make huge profits, traditional views such as asymmetric information argue that because of the uncertainty about the firm value, the issuers deliberately decrease the offer price to keep the demand on their offered equities high, but even some aspects of asymmetry information assume that the issuing corporations are more informed about the intrinsic value of their companies than outside investors, so why don't they set the offer price at level close to the intrinsic value? probably because they will sacrifice the money they would get if they offered a price lower than the intrinsic value.
Some researchers believe that the underpricing cost the issuers to lose money because they are selling at low price, but this has been proven untrue, Loughran and Ritter (2002) examine the covariance between the issuers’ capital sacrifice and their overall wealth after listing. By integrating the loss with the gain, they find that issuers are wealthier than they would expect.
Therefore, the issuers are not scarifying anything because they know damn well that price will rise quickly in the first trading day. The problem here is the information hidden by the companies and use them for their interests. So in the end isn't it just a scam and ruse to use for realising greater profits in the future.
After reading so many articles and reviews I could not think of it another way, your thoughts are cordially welcomed.
------------------------------------
Loughran, T., Ritter, J.R., 2002. Why don’t issuers get upset about leaving money on the table in IPOs? Review of Financial Studies 15, 413-443.
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Thanks Mr Pinfold for taking time to enrich this discussion
In most of cases of IPO underpricing the balance between the risk factors whether it's endogenous or exogenous is broken, that is the bone of discussion in most of IPO underpricing studies. In fact it would not have gotten this great deal of attention by researchers if the pricing is well balanced. The underpricing some times is so extreme and researchers have not been able to be justify it even when considering the legal and institutional differences beside the traditional views, the explanations based on asymmetric information has been reasonable but it has been found inadequate, as pointed out Welch and Ritter (2002) in their review of IPO theories and activities. The risk in subscription to IPO may apply only to group of investors usually the uninformed ones, but the well informed investors such as the institutional investors does not subscribe unless they know they going to be rewarded with huge profits surpass the expected risk by miles. Uninformed investors, on the other hand, their expectations may fall short because they are not as adept as the institutional investors in term of risk measuring. The institutional investors by nature hold and buy shares over a short period of time, this allows them to sell their holdings before deteriorating in the long run which is the case in the post-market performance of many IPOs, I understand that this is the way market works and using the word "scam" may be was too harsh and generalises the issue, but some times it looks unfair especially if your in the other end. I would have agreed with you if the offer price is completely justified by the hazards the subscribers would endure, but the underpricing has gone a way far beyond that. Note that the IPO is most of the time oversubscribed, so it can be said that the IPO underpricing is in favor of the investors, however the shares are not justly distributed between the investors, this unfairness only become an issue when the institutional investors started taking over the stock markets, especially after the global financial crisis. Against this backdrop, one could relate the underpricing to this factor. Finally I respectfully disagree with you that issuers wanting a higher price, because many studies show that the issuers are the ones who were pushing the offer price down.
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I'm studying C/P issue and now applying a multi lineer regression model to my project. I added some variable such as ROA and debt to equity ratio as financial variables and size and age as corporate control variables. In addition my dependent variable is ROE. I choose the Denison's Organizational Culture Model for the corporate culture variables and added them in a row, finally added organizational culture itself to the model. I wonder how I can get and assembly the results in a discussion section and whether this model may be enough for my analysis?
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Dear professor Samaeizadeh,
Thanks for sharing your paper with me. It sounds very successful paper. Congratulations. But I use regression analysis instead of CFA or SEM. Also I prefer hard financial indicator for financial corporate results. So as to my financial variables, they are just different from yours and established to regression analysis.. This is a secondary way for me. Maybe I yield to another topic for this method. Thanks for sharing your opinion anyway.
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HR is an important business function. In these days of competition and dynamic economic environment, we can never undermine the importance of HR functions. But how do we check if HR function can have an impact on profitability of business....?
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Hi,
I think that Edmans' paper could be of some help for you since he studies the correlation between employees satisfaction and shareholder returns. He thinks that nowadays human capital is more and more important, and stresses the inaptitude of the market to fully incorporate these intangibles into share prices. For him employees become the key assets. Thus he considers a portfolio of the "'100 best companies to work for in America" published each year by Fortune, and finds superior performance of stock returns with respect to benchmarks. See below:
Edmans A "Does stock market fully value intangibles: Employee satisfaction and equity prices", Journal of financial economics , 2011,  101, p 621-640.
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I am trying to study the financing behaviour of Indian Corporates. Through my study I will try to find the factors that motivate firms to change their financing pattern. Whether it is because of change in other factors such as firm size, earnings volatility, etc. Please give me your suggestions. Your suggestions would add value to my research.
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I suggest that you take into account the "trade-off theory" (Fisher Heinkel and Zechner, 1989), the "pecking order theory" (Myers Majluf, 1984),  and the market timing theory (Baker and Wurgler, 2002).
Some interesting papers concerning the behavior of firms were published by Graham and Harvey(2001), by Byoun (2008) concerning the speed of adjustement to a specific ratio, by Faulkender, ,Flannery, Hankins, and Smith (2012) and so on.
You may want to distinguish between bonds issued on the financial market an loans granted by banks. You may also want to consider ythe maturity of the debt and the refinancing risk associated.(Hardford, Klasa Maxwell, 2014). At last you may be inclined to consider the managerial incentives for designing a specific portofolio of debt (Coles Naveen, Naveen, 2006). Good luck!
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I am looking to map the business model in an entire industry, so I am looking for a valid instrument to use it in a survey.
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It depends on what you mean with quantification... I understand your question in the way that you want to compare business models in an industry, which does not necessarily mean that the study itself has to be of quantitative data. E.g., if you want to build BM typologies you can also use qualitative data, like Amit and Zott 2001.
In our study we did 18 case studies to map the possible characteristics of industry specific BMs for the diagnostic industries and finally send out a questionnaire to 100 companies in this sector with these different characteristics. The aim was to identify BM clusters. In the end we got a “business model landscape” for the German diagnostic industry.
If you plan something similar, than I can recommend an overview of typologies and taxonomies in BM literature, which is published under the following link and contains a literature review from a conference paper, I presented in 2012.
If you think in BM and quantitative dimensions like Thomas, I know this dissertation from Uni St. Gallen about “Management of Art Galleries–Business Models“, http://www1.unisg.ch/www/edis.nsf/syslkpbyidentifier/3927/$file/dis3927.pdf
Hope it helps…
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I currently test some ways to figure about whether a business model is stable or not like for example the usage of the coefficient of determination used over 10 years. Till now all tests are negative which means that there is no method out there which  can help investors to define businesses as stable fist just based on financial data. Maybe someone has an idea.
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I read in the book from Benjamin Graham "Security Analysis" that there is a methode to test the stability. I now tested the Methode and it turned out that it does not totally work. So I wondered whethers there are other methodes. But generally I would also say from my Point of view now, that it is not possible to do that. I used for the testing a database with 30.000 companies and Basic data over 20 years.
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I think the process of business financing in Asia, particularly in the Middle East, is different from that in the USA or Europe.
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Venture capital does not fund small business in the US, why should it do so in the Middle East?