Search Results (59)

Purpose: This research aims to examine the impact of accounting conservatism on investment efficiency and the cost of capital within the Saudi Arabian corporate context following the implementation of Saudi Vision 2030. Methodology: This study analyzes panel data from 105 non-financial listed firms on the Saudi Stock Exchange (Tadawul) from 2016 to 2024. To fulfill the structural requirements for measuring investment efficiency, the sample is restricted to sectors containing a minimum of 10 firms. The empirical framework relies on four robust Ordinary Least Squares (OLS) econometric models to evaluate the hypothesized relationships. Findings: The empirical findings indicate two primary results. First, accounting conservatism exerts a significant positive impact on investment efficiency. Second, statistical tests reveal that accounting conservatism has a nuanced, asymmetric, and non-linear impact on the components of the cost of capital—specifically, the weighted average cost of capital (WACC), cost of equity (COE), and cost of debt (COD)—when conditioned across three distinct regimes: the full sample, underinvesting firms, and overinvesting firms. These results challenge traditional linear assumptions, indicating that a state-contingent framework better explains market reactions to financial reporting strategies. Implications and Recommendations: The findings suggest that decision makers should abandon the assumption that maximizing accounting conservatism is a universally risk-averse or beneficial strategy. Instead, corporate managers should treat accounting conservatism as a strategic instrument governed by definite thresholds, as its impact on financing costs is deeply tied to a firm’s structural investment realities. Regulatory bodies and standard setters in the Saudi market are encouraged to integrate these non-linear insights when evaluating the capital market effects of financial transparency reforms. Full article

Real-world speech restoration must handle coupled distortions, including acoustic noise and reverberation, codec artifacts, clipping, and artifacts left by upstream enhancement systems. Token-based generative systems offer a flexible route for such universal restoration, but discrete audio tokens can discard fine acoustic detail, and aggressive generative decoding may over-process inputs that are already close to clean speech. We propose AudioVAE-MASR, a continuous-latent masked autoregressive framework for multi-distortion speech restoration. A frozen AudioVAE maps clean and degraded speech into paired continuous latent sequences; a Conformer-based branch extracts the degraded-condition sequence $C_y$ from degraded latents; a two-stream masked autoregressive encoder-decoder conditions masked clean-latent recovery on both degraded context and visible clean tokens; and a lightweight diffusion head models the masked clean tokens in the continuous latent space. On the released CCF AATC 2025 blind test set, the main inference setting ($K=16$, temperature $0.5$) achieved WAcc 0.793, SIG 3.401, BAK 3.987, OVRL 3.111, PESQ 1.780, and ESTOI 0.798. Relative to the degraded input, these results improved WAcc and DNSMOS but did not improve PESQ; relative to the organizer baseline, they improved WAcc, SIG, OVRL, and PESQ but remained lower in BAK. A local subjective MOS evaluation with five listeners gave an overall mean score of 4.08 for AudioVAE-MASR, compared with 3.70 for the degraded input and 4.59 for the clean reference. Distortion-type, ablation, and parameter-sensitivity analyses further show that codec inputs remain vulnerable to over-restoration and that longer iterative decoding does not provide a consistent gain. The study therefore presents AudioVAE-MASR as a transparent continuous-latent restoration framework and identifies the fidelity-control problems that must be solved before such generative restoration can match the strongest lightweight discriminative systems. Full article

This study investigates the relationship between Environmental, Social, and Governance (ESG) ratings and firm financial performance across a comprehensive global sample of over 10,000 companies from more than 80 countries observed in 2015–2022. Using panel data analysis, we examine how overall ESG scores and their components affect the Return on Assets (ROA), Return on Equity (ROE), and Weighted Average Cost of Capital (WACC). We employ several econometric approaches designed for panel data, including the univariate approaches; static (Pooled OLS; Fixed Effects) and a multivariate approach (Panel Vector Autoregression; PVAR) to address potential endogeneity concerns and provide robust findings. Our results revealed a complex relationship between ESG performance and financial outcomes. While OLS models generally show positive associations between ESG scores and profitability measures, Fixed Effects models indicate some negative relationships, suggesting that unobserved firm-specific factors are crucial. PVAR results highlight important dynamic interactions between ESG performance and financial metrics over time. These findings contribute to stakeholder theory by demonstrating that the financial implications of ESG performance are contingent on methodological approaches, time horizons, and specific contexts. Our research has important implications for corporate managers, investors, and policymakers seeking to understand the financial consequences of sustainability practices. Full article

Brazil possesses globally competitive offshore wind resources; however, financial viability is constrained by high capital expenditure (CAPEX) and industry risk. This study evaluates the investment feasibility of a 1 GW offshore wind project in northeast Brazil using a discounted cash flow (DCF) model. For the key parameter of CAPEX, a Baseline Case was established, assuming a 1.53% commodity price escalation from 2021 until the Financial Investment Decision (FID) date of 2027, and was sensitivity tested against an Optimistic Case, assuming 0% cost escalation and a Stress Case based on twice the commodity price escalation of 3.06% up to 2027. Each CAPEX Case was evaluated against 12 financing scenarios involving varying levels of public support through a blend of concessional debt and grants. Financial performance was measured using net present value (NPV) and Equity Internal Rate of Return (EIRR). Results indicate that project financial viability is achieved under the Baseline Case only with levels of grant funding and concessional debt that exceed realistic thresholds, unless PPA tariffs are raised by about 50% relative to current market benchmarks. The Optimistic Case is viable at current tariffs under more realistic financing structures but represents an unattainable degree of capital cost containment. The Stress Case is not viable at all without a doubling of current PPA tariffs. Sensitivity analysis further demonstrates that even the most promising financial scenarios are vulnerable to any shortening of the 20-year PPA contracting period, leading to greater merchant risk exposure. The paper concludes that catalysing Brazil’s nascent offshore wind market will therefore call for a combination of policy measures that: permit (and recoup) a transitional premium over current PPA prices; adopt structural measures to reduce associated CAPEX through local supply chain development; combine public and private sources of capital to soften financial terms; and incorporate price risk mitigation measures. Full article

The objective of this paper is to offer a mathematical formulation of economic value added (EVA) that incorporates distance-to-default (DD) and thus a default-free capital structure. The latter is extended via the weighted average cost of capital (WACC) to introduce a default-free EVA. The data include the nonfinancial firms listed in the DJIA30 and NASDAQ100 covering the period 1992Q2–2023Q3. The results of standard specification tests and the GMM estimator show that (a) DD causes an increase in WACC and thus, EVA decreases; (b) the interest coverage ratio can be used effectively to compensate for default risk, thus adjusting the default-free EVA positively; (c) both EVA and default-free EVA can effectively be managed via common determinants, namely, net working capital ratio, total liabilities to EBITDA, sales growth rate, debt–equity ratio, and earnings per share; (d) the positive impact of the inflation rate on both EVA and default-free EVA justifies the use of default-free EVA as a metric for equity risk premium; and (e) the robustness of the results via stochastic geometric Brownian motion shows that the determinants of default-free EVA are stable. This paper contributes to related studies by incorporating credit risk via the DD into default-free EVA. Full article

This study constitutes the second part of a comprehensive investigation of the persistence of weighted average cost of capital (WACC) rates despite declining risk-free interest rates. While theory suggests that WACC should reflect lower risk-free interest rates and decline with falling government bond yields, empirical evidence reveals minimal adjustment in the reported WACC figures. Disclosed WACC of DAX40 companies remain between 7% and 8% as the yield of a ten-year German government bond fell from 4.1% to −0.2%. After the quantitative risk analysis (part I) systematically lacks market-based and fundamental explanations—demonstrating that neither systematic risk, overall market risk, earnings risk nor leverage increased sufficiently to justify this stability—this article addresses the resulting explanatory gap through qualitative inquiry. Employing a grounded theory methodology, we investigate the causes and consequences of persistent WACC through systematic analysis of 18 problem-centered semi-structured expert interviews (22 respondents comprising corporate finance executives, investment bankers, strategy consultants, auditors). The investigation reveals that behavioral economics (risk aversion, opportunism, subjectivity), organizational constraints (strategic path dependency, implementation complexity, financial criterion rigidity), and model-theoretic discretion (parameter averaging, analyst influence, supplementary risk adjustments) substantially shape practical WACC determination—factors that quantitative risk analysis cannot capture. Practitioners employ disclosed WACC strategically to reconcile investor return requirements with long-term operational stability, avoid audit friction, and hedge geopolitical–monetary risks—consequences that generate capital opportunity costs offsetting traditional value-maximization objectives. Combined quantitative and qualitative evidence yields actionable insights for value-based capital cost methodologies that are aligned with organizational and market realities. Full article

The article examines the persistent stability of the weighted average cost of capital (WACC) disclosed by German DAX40 companies despite substantial declines in risk-free interest rates between 2004 and 2021. While theory suggests that WACC should reflect lower risk-free interest rates and decline as well with falling government bond yields, empirical evidence reveals minimal adjustment in reported WACC figures. Disclosed WACC of DAX40 companies remains between 7% and 8% as the yield of the ten-year German government bond fell from 4.1% to −0.2%. This study employs quantitative analyses to investigate whether systematic increases in risk exposure can explain this phenomenon. Using capital market data spanning from 2000 to 2023, we analyze five risk dimensions: systematic risk (beta factors), overall market volatility, risk aversion (lambda factors), earnings risk, and financial structure risk. Bootstrap analyses reveal a 41.5% reduction in beta factor variance, while volatility analyses demonstrate declining market risk exposure. The market price of risk analysis does not reveal definite findings. Earnings risk measures indicate improved financial stability, and debt ratios show modest declines. These findings suggest that observable risk parameters cannot explain persistent WACC levels, indicating a disconnect between theoretical WACC calculations and practitioner applications in investment project decision-making following value-based management principles. Full article

This study assesses the technical, operational, environmental, and economic feasibility of integrating alkaline water electrolysis (AEL) using on-site measured surplus electricity from two 20 MW natural-gas turbogenerators installed at a Central Processing Facility (CPF) in a Colombian oilfield. Unlike approaches based on modeled profiles, the analysis relies on more than 31,000 experimental records of gas consumption and active power, enabling an accurate characterization of the structural availability of energy surpluses under real operating conditions. A specialized industrial water treatment and purification company was consulted and provided with the physicochemical characterization results obtained from process water samples analyzed by an accredited laboratory. Based on these parameters, the technical supplier confirmed the feasibility of designing a multistage treatment train, including equalization, filtration, clarification, activated carbon, ultrafiltration, and reverse osmosis, capable of achieving final conductivities at or below 5 µS/cm. This water quality level is compatible with typical industrial alkaline electrolysis requirements and in line with technical specifications commonly aligned with ASTM and ISO standards for pressurized AEL systems. A strategic comparison between PEM and AEL technologies, supported by IFE/EFE matrices and sensitivity analyses, identified alkaline electrolysis as the optimal alternative under a stable electrical profile and capital expenditure constraints. Energy sizing for scenarios between 1.5 and 10 MW, assuming continuous 24 h operation and an average specific consumption of 50 kWh/kg H₂, yields productions between 0.5 and 3.5 t H₂/day, with electrical efficiencies above 70%. A 20-year financial analysis indicates a techno-economic threshold near 3 MW (NPV > 0; IRR > WACC), with optimal performance in the 6.5–10 MW range and payback periods between 2 and 4 years under internal valorization of the surplus electricity. From an environmental perspective, the produced hydrogen is classified as low-carbon rather than “green” due to its thermal origin; however, the integration improves the turbines’ operating regime and valorizes surplus electrical exergy that was previously unused, providing a replicable strategy for industrial assets with self-generation and treatable water availability. Full article

The growing demand for personalized human–computer interaction calls for methods that jointly model emotional states and personality traits. However, large-scale multimodal corpora annotated for both tasks are still lacking. This challenge stems from integrating diverse, task-specific corpora with divergent modality informativeness and domain characteristics. To address it, we propose SSL-MEPR, a semi-supervised multi-task cross-domain learning framework for Multimodal Emotion and Personality Recognition, which enables cross-task knowledge transfer without jointly labeled data. SSL-MEPR employs a three-stage strategy, progressively integrating unimodal single-task, unimodal multi-task, and multimodal multi-task models. Key innovations include Graph Attention Fusion, task-specific query-based cross-attention, predict projectors, and guide banks, which enable robust fusion and effective use of semi-labeled data via a modified GradNorm method. Evaluated on MOSEI (emotion) and FIv2 (personality), SSL-MEPR achieves a mean Weighted Accuracy (mWACC) of 70.26 and a mean Accuracy (mACC) of 92.88 in single-task cross-domain settings, outperforming state-of-the-art methods. Multi-task learning reveals domain-induced misalignment in modality informativeness but still uncovers consistent psychological patterns: sadness correlates with lower personality trait scores, while happiness aligns with higher ones. This work establishes a new paradigm for extracting cross-task psychological knowledge from disjoint multimodal corpora, demonstrating that semi-supervised multi-task cross-domain learning can bridge annotation gaps while preserving theoretically grounded emotion–personality relationships. Full article

The paper investigates the relationship between ESG transparency/performance and financial performance in tourism, with a focus on profitability (ROA), capital structure (D/E), and cost of capital (WACC). The empirical analysis uses a 2019–2024 panel for 10 listed tourism companies—Booking Holdings, Expedia Group, Airbnb, Marriott International, Hilton Worldwide, Hyatt Hotels, InterContinental Hotels Group, Wyndham Hotels & Resorts, TUI Group, and Carnival Corporation—covering distinct sub-sectors (OTA/Platform, Hotels, Tour Operator, Cruise). The study is based on a quantitative methodology that includes descriptive analyses and the application of advanced econometric models. Methodologically, the paper applies panel econometric models with fixed effects (firm and year), sectoral controls and robustness tests (ESG × Sector interactions, alternative size specifications). The results indicate, on average, a positive association between ESG and profitability (ROA) scores, as well as a negative relationship with WACC (indicating a lower cost of capital for firms with higher ESG), after controlling for size, country and sector. The effects are heterogeneous across sub-sectors, with the ESG–performance relationship more pronounced in hotels (where capital intensity and operational exposure are higher) and less pronounced for OTA platforms, but remain directional and statistically significant in most specifications. Overall, ESG compliance and performance emerge not only as reporting obligations, but also as strategic tools associated with sustainable competitive advantage in tourism. Therefore, the CSRD is not just a reporting obligation, but also a strategic tool that boosts financial performance and managerial innovation. The study provides directions for future research on the use of artificial intelligence in the evaluation of ESG reporting and the expansion of the analysis to other economic branches. Full article

This study investigates how environmental, social, and governance (ESG) performance influences firm-level financial outcomes using a panel of approximately 24,500 firm-year observations from 2015 to 2024, based on Refinitiv ESG scores across 12 industries and multiple European countries. To capture institutional heterogeneity, the analysis separates Nordic and non-Nordic firms and applies fixed-effects models for the latter and random-effects models for the former, as supported by Hausman diagnostics. The results reveal that ESG performance is positively associated with firm value, while its effects on short-run accounting returns differ across regions. Specifically, ESG scores are associated with a negative and statistically significant impact on ROA and ROE in the non-Nordic subsample, suggesting transitional adjustment costs and delayed financial realization. For financing outcomes, the study shows that ESG engagement reduces the Weighted Average Cost of Capital (WACC) in both samples, though mechanisms differ. In Nordic markets, a 10-point increase in ESG score corresponds to an estimated 4.2-basis-point reduction in WACC, reflecting the benefits of mature disclosure systems. In contrast, governance emerges as the only ESG pillar capable of reducing financing costs in non-Nordic countries. These region-specific patterns confirm that institutional maturity and investor orientation shape the financial materiality of ESG practices. The novelty of this study lies in jointly modeling (i) positive valuation effects, (ii) negative short-run profitability adjustments, and (iii) financing-cost reductions within a unified ESG framework while explicitly distinguishing governance regimes across Europe. The findings offer new evidence on how disclosure quality and governance structures moderate ESG’s economic impact and suggest that strengthening governance transparency can help firms in less mature ESG environments realize capital-cost advantages. Full article

This study investigates the impact of ESG practices on the financial stability in a multisector sample of 86 publicly listed Brazilian firms, focusing on the Weighted Average Cost of Capital (WACC) and Altman Z-Score (AZS) as a proxy for insolvency risk. Using Bloomberg data from 2010 to 2021, this research applies advanced econometric methods, including Ordinary Least Squares (OLS), Vector Autoregression (VAR) and Fully Modified Ordinary Least Squares (FMOLS), to capture both short- and long-term effects. The findings reveal a financial learning curve: in the short term, ESG adoption can temporarily increase WACC and insolvency risk due to initial implementation costs, whereas in the long term, it reduces financial risk, enhances operational efficiency, and strengthens corporate resilience. These results underscore ESG practices as a strategic determinant of long-term value creation and financial stability. This study offers actionable insights for policymakers, investors, and corporate leaders aiming to align sustainability initiatives with financial performance in emerging market contexts. Full article

This paper examines the impact of environmental, social, and governance (ESG) disclosure on the cost of capital for banks as well as financial technology companies in Europe, America, and Asia from 2010 to 2024. The study investigates how sustainability affects financing conditions in the two institutional settings of conventional and digital financial intermediaries. We estimate the average cost of capital using the traditional WACC (weighted average cost of capital) formula, which calculates the cost and proportions of debt and equity capital. Panel regressions with firm and year fixed effects are used, along with an instrumental variable (IV) approach (2SLS), by way of peer-based ESG instruments to correct for endogeneity. The paper also carries out robustness checks such as the Anderson–Rubin weak IV tests and over identification diagnostics. The findings indicate that more ESG disclosure has a significant negative effect on WACC and debt costs and no robust impact on equity cost. Governance disclosure is revealed to be the dominant dimension and it always correlates with lower financing costs. Environmental disclosure is occasionally associated with a higher cost of equity, owing to investors’ expectation of short-term compliance costs. The results shed light on the dynamic relationship between innovation and sustainability in driving banks and financial technology firms financing environment. Full article

This study tests whether labeled green and sustainability-linked financing complements firms’ R&D to lower the weighted average cost of capital (WACC), raise valuation, and shift innovation toward climate mitigation technologies. Using a 2012–2024 panel of S&P 500 constituents with complete coverage, this study applies a staggered-adoption difference-in-differences design with interaction-weighted event-time estimators and entropy balancing; WACC is decomposed into equity and debt components, valuation is measured by Tobin’s Q, and innovation outcomes cover patent counts and the CPC Y02 share, with matched-bond and secondary-market comparisons for the debt channel. Within two years of first-time adoption, this study observes a meaningful decline in WACC (approximately 40–60 bp) driven mainly by the cost of debt, alongside higher valuation and increased innovation intensity with a larger Y02 share. Effects are larger where R&D intensity is higher and are strongest for use-of-proceeds green bonds and for sustainability-linked contracts with material KPIs and non-trivial step-ups. These results indicate that labeled financing is most effective when aligned with credible R&D pipelines and verification mechanisms, clarifying its governance role in corporate sustainability strategies. Full article

In a context where the measurement of economic value is key for financial decision-making, Economic Value Added (EVA) stands out as a relevant indicator for assessing companies’ financial performance efficiency. This research aimed to determine the impact of the Weighted Average Cost of Capital (WACC) and profitability on the EVA of industrial sector companies in Peru. A quantitative approach was used, with a correlational-causal and non-experimental design. The sample included four industrial sector companies listed on the Lima Stock Exchange (BVL). The authors applied the document review technique, and the correlational analysis was carried out using linear regression. Results show that Return on Equity (ROE) is a statistically significant predictor of EVA across all companies analyzed, indicating a direct relationship. In contrast, WACC showed a weak relationship with the variables studied. It is concluded that profitability has a greater influence on EVA than WACC. However, the relationship between WACC, ROE, and EVA differs among companies. The model explains a moderate variability in EVA, suggesting that other factors not considered in the model also affect the generation of economic value. Full article