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  • Research of Corporate Financial Decisions of Russian Companies and Companies of other Emerging Capital Markets under the Pressure of Global Markets Transformation and Knowledge  Economy Development

Research of Corporate Financial Decisions of Russian Companies and Companies of other Emerging Capital Markets under the Pressure of Global Markets Transformation and Knowledge  Economy Development

Priority areas of development: economics
The project has been carried out as part of the HSE Program of Fundamental Studies.

The goal of the project is to identify common and specific characteristics of corporate financial decisions of Russian companies aimed at building financial architecture and its influence on company performance. Decisions are evaluated in comparison with those of companies from a number of emerging markets (BRICS countries) and European companies, which we suppose operate under conditions of extensive transformations of financial markets. 


We study corporate decisions including financing decisions, specifics of venture investments, investment decisions, payout decisions, corporate financial architecture and corporate control strategic deals. Most of corporate decisions are examined from value-based standpoint and motivation for value creation is the major interest. Regression analysis is the basic instrument for hypothesis testing.

Empirical base of research:

Datasets for analysis are created specifically for hypothesis testing. Sources include: Bloomberg database, Reuters database, company yearly report, open internet sources to search for announcement dates and rumors.

Results of research include:

  1. There is a relationship between speed of adjustment of corporate capital structure to its targeted capital structure and economics characteristics.
  2. There are determinants of financing policy of corporations that use no-debt policy. Growth opportunities don’t explain no-debt policy as they usually do on developed markets. However, the percentage of management shareholdings does explain.
  3. There are specific macroeconomic indicators explaining no-debt financing policy of companies from emerging capital markets.
  4. An approach was offered to study relationship of corporate governance and capital structure based on simultaneous equations to fight with endogeneity. 
  5. Agency costs happen to be a significant factor in explaining capital structure decisions. They are supposed to be minimized using corporate governance mechanisms.
  6. M&A deals in the financial sector from Western Europe are studied (2000-2013 period). There is a negative relationship between the numbers of deals and market values initiators in short run.
  7. Common determinants of M&A efficiency are: acquirer’s size, internationality of the deal, acquirer’s experience in M&A activity.
  8. Based on 117 international and 247 local deals it is discovered that capital markets favor acquisitions that are global rather local.
  9. Common determinants of short–term and long-term abnormal returns are exchange rate appreciation, bidders’ free cash flows and level of business diversification.
  10. Size and B/M premiums are evaluated and their emerging markets specifics are examined.
  11. A number of endogenous and exogenous factors are discovered affecting asset returns. A number of additional factors are studied including exchange rates, financial leverage and investments.
  12. It is shown that corporate governance of large European banks is positively related to value creation during the periods of high volatility on financial markets.
  13. Determinants of strategic bank performance are discovered and they include board size, director’s age, number of meetings, number of insiders, committee existence.
  14. An updated firm growth model is proposed to evaluate the role of human capital in boards.
  15. It is discovered that boards and managers’ intellectual capital is related to sustainability of company growth.
  16. An updated smoothing dividend model is proposed to evaluate corporate payout decisions.
  17. Lagged dividend is discovered to explain current level of dividend payouts in Russian companies.
  18. Common determinants of venture investments in Russian companies are discovered. They include size of first level investment, existence of an experienced investor and market growth potential. Factors affecting volume and probability of venture investment are studied.
  19. It is showed that direct investment funds in Russia positively influence operating performance (measured as return on sales and sales growth rates) of portfolio companies. It is discovered that funds invest in equity of Russian companies exhibiting high growth rates.
  20. It is discovered that bankrupt companies compared to their alive comparable companies generate yearly report in a different manner. It was possible to discover expressions that are common to bankrupts.
  21. A model was proposed to predict corporate bankruptcy. It allowed to evaluate weather a symantec index play influence probability of bankruptcy. It happed to be significant together with other common indicators based on financial reports.

Level of implementation,  recommendations on implementation or outcomes of the implementation of the results

Research results were presented in different ways including local and international conference presentations and discussions. 2014 conferences include: Moscow (Russia), Venice (Italy), Ferrare (Italy), Munich (Germany), Budapest (Hungary), Saint-Gallen (Switzerland), Singapore. Research results are presented in 7 papers published in local and international academic journals.


Kokoreva M., Ulugova A. The Impact of Corporate Governance on Financing Policy: Evidence from Emerging Markets / NRU Higher School of Economics. Series FE "Financial Economics". 2014.
Grigorieva S., Morkovin R. The Effect of Cross-Border and Domestic Acquisitions on Shareholder Wealth: Evidence from Brics Acquirers // Journal of Corporate Finance Research. 2014. No. 4 (32). P. 34-45.
Улугова А. Э., Кокорева М. С. Влияние корпоративного управления на политику финансирования компаний на развивающихся рынках // Корпоративные финансы. 2014
Cherkasova V., Rechinskaia V. Practices of Suboptimal Investments in Russian Companies Depending on Life-Cycle Stages // WEALTH - International Journal of Money, Banking and Finance. 2014. Vol. 3. No. 2, July-December 2014
Макеева Е. Ю., Горбатков С. А., Белолипцев И. И. О моделях диагностики банкротства организаций // Менеджмент и бизнес-администрирование. 2014. № 1. С. 151-172.