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March 2016 (published: 30.03.2016)
Number 1(24)
Home > Issue > Corporate finance essence and management principles
Prihodko R.V., Abd Asaad Mansour
The role which play corporations in modern world and domestic economy is shown in the article. Activity of the Russian corporations depends on degree of efficiency of corporate management and the legislation, but absence of the corporate legislation doesn't allow domestic corporate structures to develop normally. It is the reason of that they are insufficiently competitive in the world market (except for the corporations operating in the fuel and energy complex sphere). Merits and demerits of corporate form of ownership are considered. Among demerits is the so-called agency problem arising because of inequality of major and small shareholders, shareholders and managers in corporation. Further definition of corporate finance is given and the main functions which they carry out in economy are considered. In particular, corporations are active participants of transactions of mergers and acquisitions in domestic stock market. But the number of these transactions in our country is rather small. The reason - the Russian stock market remains rather unstable and insufficiently developed that doesn't promote growth of number of transactions on mergers and acquisitions at all. Also business activity is interfered by high interest rates operating in domestic economy. Also the attention is paid to the principles of efficiency of modern corporations. It is emphasized that domestic corporate structures need to strive for compliance to these principles although for them it is still a long way to the true efficiency because Russia has no long experience of corporate management, including management of finance of corporations, and the corresponding legal base isn't fulfilled.
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Keywords: corporation, stock market, shares, agency problem, minority investors, corporate management, mergers and acquisitions
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 336
Corporate finance essence and management principles
The role which play corporations in modern world and domestic economy is shown in the article. Activity of the Russian corporations depends on degree of efficiency of corporate management and the legislation, but absence of the corporate legislation doesn't allow domestic corporate structures to develop normally. It is the reason of that they are insufficiently competitive in the world market (except for the corporations operating in the fuel and energy complex sphere). Merits and demerits of corporate form of ownership are considered. Among demerits is the so-called agency problem arising because of inequality of major and small shareholders, shareholders and managers in corporation. Further definition of corporate finance is given and the main functions which they carry out in economy are considered. In particular, corporations are active participants of transactions of mergers and acquisitions in domestic stock market. But the number of these transactions in our country is rather small. The reason - the Russian stock market remains rather unstable and insufficiently developed that doesn't promote growth of number of transactions on mergers and acquisitions at all. Also business activity is interfered by high interest rates operating in domestic economy. Also the attention is paid to the principles of efficiency of modern corporations. It is emphasized that domestic corporate structures need to strive for compliance to these principles although for them it is still a long way to the true efficiency because Russia has no long experience of corporate management, including management of finance of corporations, and the corresponding legal base isn't fulfilled.
Read the full article
Keywords: corporation, stock market, shares, agency problem, minority investors, corporate management, mergers and acquisitions
DOI 10.17586/2310-1172-2016-9-1-56-61