XI International GSOM Economy&Management Conference - EMC 2024. Special Track of the HSE School of Finance «Strategic Finance: The Future of Corporate Finance in an Era of Structural Crises»

Achieving antifragility of businesses at turbulent times requires financial executives to maintain inclusive growth strategies.

XI International GSOM Economy&Management Conference 2024, EMC 2024, was held from 1^st to 5^th October, 2024 in St Petersburg. Within the framework of the conference a Special Track «Strategic finance: the future of corporate finance in an era of structural crises» has been prepared by the School of Finance of HSE. The discussion of future trends in corporate finance was focused on the role of digitalization and ESG transformation in corporate performance. Both types on transformation are inevitable in corporate world in emerging capital markets. These trends in the context of permanent financial crises require companies to implement inclusive business models that contribute to their transformation into factories of inclusive growth.

First, the research approach to the measurement to the digital readiness (the paper of Irina Skvortsova and Alexei Sukhov), the depth of digitalization at firm level on one side and the interaction between digital and ESG transformations (the paper of Yanfei Wu and Irina Ivashkovskaya) on another side were the key area of discussions. Moreover, the impact of digital readiness became significant for M&A deals of emerging capital markets when these companies go cross-border. ESG agenda-performance relationship has been examined from the point of its role in the acquirer’s success in M&A as shown by Svetlana Grigorieva and Gyaz Valitov) on the sample of developed markets.  The lessons from the research on ESG transformation in the developed markets have been discussed due to two papers on the magnitude of changes in greenium in European markets and the role of ESG transformation during crises presented by Sergei Grishunin. Is there a type of life-cycle in sustainable finance and investor’s attention to the depth of ESG transformation? How should the research approaches change to capture the relationship between the depth of ESG agenda in corporations and the reaction of investors?

In turn, Sergey Grishunin in his papers showed that the integration of sustainable development practices into the activities of companies only partially mitigates the impact of crises on the company's performance and value. This influence is provided by increasing the trust of stakeholders and strengthening of risk management. Achieving long-term resilience requires companies to implement comprehensive inclusive growth strategies as part of their strategic control initiatives. These strategies should include, in addition to implementation of ESG practices and building trust with stakeholders, digital transformation, product and process innovation, productivity improvement and integrated risk management throughout the value chain. Also, companies, in the process of developing financing practices, need to take into account that the discount to profitability when issuing green bonds in the last few years no longer exists. On the contrary, investors in conditions of increased risks began to demand increased profitability from companies making the ESG transition.

New ideas and research questions were introduced in the topics that are considered traditional. First, the paper by Alina Kostochko and Andrei Bondarchuk added economic cycle to the role of industry relatedness and valuation of high tech M&A deals. Second,   the role of political connections of CEOs in M&A performance in emerging markets promoted discussion on how to differentiate it from the impact of state ownership in many companies involved into M&A in the Russian market (Ekaterina Zagudalova and Sofia Zueva).   Next, the CEO horizon and its role in corporate policies presented by Dmitri Podukhovich involved the participants into discussions of different points of view on the measurement of such a horizon. The paper on underpricing of IPO in the Russian market (presented by Sergei Kondratiev and Elizaveta Batalova) promoted discussion on the measurement of underpricing as compared to the market expectations and the role of marketing activity of the issuing company in pricing the issue. Finally, new ideas were presented in the paper of Yuri Dranev and Alexei Melovatsky on the role or R&D in financial performance of oil&gas companies depending on their industrial profile (upstream versus downstream).

This brainstorming continued at the Special event by the HSE academic Journal of Corporate Finance Research  lead by the Editor-in-Chief Irina Ivashkovskaya.