Adverse Economic Conditions Research Articles

Stabilizing financial networks via mergers and acquisitions

A bi-level model is proposed to explore efficient policies for supporting negotiations on financial crisis resolution. In a principal–agent framework, this model minimizes the welfare loss function of a central authority (social planner, SP) through the simultaneous choice of subsidy levels and potential pairs of banks to merge. The SP’s choice of mergers needs to be incentive-compatible with the autonomous choices of banks, and the evaluation of the financial network must adhere to standard accounting principles. Incentive compatibility is enforced by two options for conditions, based on stable matching or competitive bidding. For the evaluation of the financial network, we employ an extended Eisenberg-Noe clearing payment equilibrium by considering bankruptcy costs and the seniority levels of liabilities. Additionally, liabilities are not cleared among solvent banks, and corporate bonds may be used for clearing payments. The bi-level model specifies conditions for the clearing equilibrium. For demonstration, we use major European banks, and a scenario linked to the adverse economic conditions used in the 2016 EU-wide stress testing.

Business model innovations amidst adverse economic conditions: the role of CEO values

Purpose The current business environment is characterized by high levels of uncertainty that affect the global economic system and have the greatest impact on small and medium-sized enterprises (SMEs). With an elevated degree of perceived uncertainty, Chief executive officers' (CEOs) of SMEs find themselves in a situation where the old approaches to decision-making are irrelevant and the time to create new ones is limited. The purpose of this study is to examine whether appealing to personal values helps CEOs cope with a high level of perceived uncertainty and make decisions about the further development of the firm by undertaking business model innovations (BMI). Design/methodology/approach This study follows a multiple case study research design drawing on data collected from 10 Russian SMEs. Findings The authors show that CEOs’ communion values lead to innovations in the revenue model and value architecture dimensions of the business model. CEOs who are inclined to agentic values introduce innovations in the revenue model and value offering dimensions. Those executives who balance between the two types of values tend to also balance between different types of innovations in the elements of the business model. Originality/value The results indicate that personal values of CEOs play an important role in managerial processes and the strategic choice of a BMI type. Moreover, personal temporal focus orientation serves as a translation mechanism in the relationship between CEO values and BMI in SME settings.

Empowering Sustainable Healthcare: The Role of Health Literacy

The imperative of sustainability in healthcare is becoming more pressing due to global health crises, climate change, and the rising burden of chronic diseases. Sustainability in healthcare involves social, economic, and environmental dimensions, each important for equitable and robust healthcare delivery. Health literacy may play a central role in embracing all three dimensions, bridging the gap between complex health information and individuals’ capability to understand and use it effectively: In fact, as a factor influencing the link between adverse social and economic conditions and subsequent health issues, health literacy could represent a practical target for mitigating health disparities within various demographic groups, thereby enhancing social sustainability. Furthermore, when people possess a solid understanding of their health conditions and the necessary steps for health management, they can contribute to a reduction in generated healthcare costs. Finally, health literacy and environmental health literacy equips individuals and communities with the knowledge and skills to understand how environmental factors affect health and empowers them to take proactive measures to protect the environment, potentially reducing the environmental impact of healthcare services. Therefore, integrating health literacy into education curricula and healthcare professional training is crucial for promoting sustainability. Despite some known barriers to the advancement and improvement of health literacy, such as limited awareness of its importance, the collaboration between academia, healthcare institutions, and community organizations is a path to follow to overcome these challenges.

The Effect of Food and Financial Remittances on Household Food Security in Northern Nigeria

Remittances from migrants are an important livelihood strategy to mitigate the impact of adverse economic conditions, particularly in developing countries and rural areas. This study examines how migration and remittances affect household food security by analyzing data collected from 180 farmers in northern Nigeria in 2018. The descriptive results show that households use remittances mainly for health care and education. Remittances are most commonly provided in the form of finances and food. Binary logit regression results show that food remittances have a significant positive impact on food security status. Financial remittances did not have a statistically significant impact on food security. As the number of migrants in a household increases, the probability that the household is food secure decreases. The propensity scores matching result also showed that migrant households receiving food remittances were more food secure. In light of these findings, we emphasized the need to include both financial and food remittances in studies to understand the effect on food security.

Using data on biomarkers and siblings to study early-life economic determinants of type-2 diabetes.

We study the effect of economic conditions early in life on the occurrence of type-2 diabetes in adulthood using contextual economic indicators and within-sibling pair variation. We use data from Lifelines: a longitudinal cohort study and biobank including 51,270 siblings born in the Netherlands from 1950 onward. Sibling fixed-effects account for selective fertility. To identify type-2 diabetes we use biomarkers on the hemoglobin A1c concentration and fasting glucose in the blood. We find that adverse economic conditions around birth increase the probability of type-2 diabetes later in life both in males and in females. Inference based on self-reported diabetes leads to biased results, incorrectly suggesting the absence of an effect. The same applies to inference that does not account for selective fertility.

Neuropsychological Assessment in Schooled Adolescent Offenders and Non-Offenders

Adolescents who break the law have experienced situations that increase the likelihood of becoming involved in criminal activities such as drug use, gang involvement, adverse economic conditions, among others. All this, added to their stage of human development, which is characterized by physical, cognitive, social and emotional changes, can lead them to have deficiencies in their cognitive processes and at the same time present educational difficulties. The purpose of this study is to evaluate different cognitive processes of these adolescents in comparison to a control group with similar characteristics but who have not committed any crime and whose education has not been interrupted. For this purpose, were included (n = 62) adolescent offenders and (n = 62) adolescent non-offenders of male sex and aged 14 to 18 years was taken. Basic sociodemographic data on their education and psychoactive substance use were collected, as well as cognitive data with tests such as Ineco Frontal Screening for executive functions, Montreal Cognitive Assessment for general functions, among others. The results showed significant differences in executive functions, attentional processes, memory and language. These difficulties can be key to school performance, therefore, educational interventions adapted to these adolescents are suggested.

The Reason for Silicon Valley Bank Collapse and Relevant Suggestion

Against this background, the primary objective of this study is to analyse the variables and underlying causes that contribute to the potential collapse of Silicon Valley Bank (SVB). Based on extensive research and analysis, the internal structure of SVB reveals that several key causes have contributed to the company's bankruptcy. These elements include the adverse economic conditions, the impact of the pandemic, government policies, and internal management issues inside SVB. The findings of the research underscore the impact of the prevailing economic downturn and the decision of the United States government to raise interest rates on SVB, a financial institution with a singular portfolio. Consequently, SVB is compelled to address the dearth of capital by consistently liquidating its assets. The failure of SVB Bank can be attributed to its tight association with the financial market and the overall state of the economy. The potential collapse of a financial institution might exert adverse effects on the overall stability of the financial market. Hence, it is contended that organisations should pursue portfolio diversification, enhance their liquidity management, and safeguard their cash-based assets in order to mitigate risk diversification.

When does CSR payoff?

AbstractWe investigate whether firms engaging in corporate social responsibility (CSR) can preserve firm value during normal and unprecedented exogenous adverse events. Our evidence shows, in regular times, a negative relation between CSR engagement and firm value, but under adverse economic conditions, CSR protects firm value by decreasing firm risks. We also find that firms with high managerial attributes engage in greater CSR activities that benefit shareholders in both normal and aberrant financial times. Despite the controversy surrounding CSR, our evidence points out that CSR can be viewed as a set of intangible assets that can improve firm value across good and bad economic states when firms are run by high‐attribute managers.

Resilience of cooperatives during global pandemics – Short-term effects of Covid-19 on lending behaviour of British credit unions

Cooperative financial institutions are believed to be less vulnerable to business and economic fluctuations linked to recessions and crises. This paper examines the short-term effects of Covid-19 on the British credit union sector drawing on survey data for 58 credit unions and follow-up interviews with 21 credit union managers. Loan demand, and the volume and value of loans were significantly lower in March and April 2020 after the introduction of government restrictions than in March and April 2019. Bad debt provisioning was also significantly higher in April 2020 than in April 2019. There was no significant difference for loan interest income between April 2019 and April 2020. The findings suggest that credit unions were affected by the pandemic in the same way as other financial institutions. For the majority of the credit unions, the decline in lending may be explained by a drop in consumer demand rather than restrictions put on the supply of credit. It is too early to conclude if the adverse economic conditions caused by Covid-19 will negatively affect the sustainability and ability of the sector to generate surpluses or if the cooperative model will shield the sector from resulting economic fluctuations, as suggested by the literature.

Were the self-employed less happy than waged employees during the COVID-19 pandemic? Evidence from the Gallup World Poll

PurposeThe COVID-19 pandemic created not only a public health crisis but also the largest disruption to the global economies. The purpose of the paper is to investigate the adverse impacts of the pandemic on self-employment including job loss, income reduction and cut back in work hours and how these impacts were related to the well-being the self-employed. The authors also examine how self-employers responded to adversity in different cultural settings.Design/methodology/approachThe main sample was obtained the Gallup World Poll that covers more than 39,000 individuals across 55 countries over the period from October 2020 to June 2021. The ordinary least square was the main choice of methodology. The paper employs the Oaxaca-Blinder decomposition technique to quantify the gap in financial loss between self-employed and employed individuals. Finally, the moderated mediation analysis allows the authors to examine how financial loss mediates the reduction in well-being of self-employers.FindingsThe paper finds that self-employers were 29% more likely to lose their businesses than paid individuals to lose their jobs and perhaps as a result, they were 50% more likely to experience lower work hours and less income. The findings suggest that the impact of the COVID-19 pandemic varied across countries. The financial gap between self-employment and full-time employment was narrower in countries with individualism, low uncertainty avoidance and propensity for long-term future. Finally, the paper shows that although financial loss associated with the coronavirus situation mediated the relationship between self-employment and reduced wellbeing, the positive relationship between self-employment and life satisfaction (wellbeing) held amid the pandemic. Despite all the pecuniary setbacks relative to full-time employment, self-employers report higher subjective wellbeing than regular wage earners during difficult times.Practical implicationsThe earnings gap between self-employers and employees persists (and increase) during adverse conditions may cast into doubt the efficiency of the economic system that ensures no one is left behind. In addition, contextual factors such as cultural values should also be taken into consideration in reducing the earning gap between self-employment and regular employment. It is also implied that the self-employed choose to engage in self-employment due to psychological and emotion benefits rather than material achievements.Originality/valueThis study has quantified the income gap between self-employment and employed individuals in the context of adverse economic conditions. This study also highlights the fact that despite all the financial setbacks, self-employers are happier than employed individuals and they engage in self-employment as an important way to pursue happiness. This highlights well-being as the critical non-pecuniary benefits of the career choice of and transition into self-employment that have been confirmed in extant entrepreneurship literature.

Loneliness, Social Support, Social Trust, and Subjective Wellness in Low-Income Children: A Longitudinal Approach.

The progress and development of society in every sense is possible by raising healthy individuals. To do so, it is necessary to ensure the physical and mental development of children in a healthy way. There are many variables that affect the physical and mental development of children. These variables are affected by individual factors, social structure, social interactions and cultural values. In addition, when these factors interact with each other, their effect on behavior and well-being may increase. Undoubtedly, one of the primary factors negatively affecting a child's physical and psychological development is the adverse economic conditions and hardships experienced by his/her family and consequently, by the child. Increasing poverty hinders children's access to resources, and thus negatively affects their mental health as well as their physical development. Furthermore, positive economic conditions pave the way for an improved environment, better nutrition, higher-quality education, elevated social status, more friends, reduced feelings of loneliness, and increased social support and trust and all of these positively contribute to psychological well-being. Therefore, based on the conviction that early interventions can be protective and screening is needed to determine the proper intervention, this study aims to investigate the relationship between psychological well-being, loneliness, social support and social trust, all of which affect the psychological health of children living in economically disadvantaged families. To this end, answers to the following questions were sought. Is there a significant relationship between the loneliness, social support, social trust and psychological well-being of the children from low-income families? Do the feelings of loneliness, social support and social trust of the children from low-income families significantly predict their psychological well-being?

Pengaruh Komisaris Independen, Komite Audit, Leverage, Dan Sales Growth Terhadap Tax Avoidance Pada Perusahaan Manufaktur Sektor Industri Barang Konsumsi

Manufacturing companies in the consumer goods industry sector consumer non-cyclical was chosen in this study as a research subject because of the sector company consumer non-cyclical produce and distribute goods and services that support daily needs so that they have economic stability and future potential and are not affected by adverse economic conditions. The purpose of this study was to determine the influence of independent commissioners, audit committees, leverage, and sales growth to tax avoidance on the company consumer non-cyclical registered on the IDX for 2017 – 2021. The sampling technique was carried out by purposive sampling and data collection techniques using secondary data documentation techniques in the form of financial reports. The data analysis technique uses multiple linear regression analysis. Data processing in this study uses SPSS. The results of the study show that the independent commissioners have an effect on tax avoidance. The audit committee has no effect on tax avoidance. Leverage no effect on tax avoidance. Sales Growth no effect on tax avoidance.
 Keywords: independent commissioners, audit comittee, leverage, sales growth, tax avoidance.

Optimizing energy efficiency investments in steel firms: A real options model considering carbon trading and tax cuts during challenging economic conditions

This study proposes a policy mix of carbon pricing and tax cuts to incentivize firms to invest in energy-efficient technology during economic downturns and periods of low carbon prices. Utilizing a real options model, we determine the optimal timing for companies to make investments in energy efficiency technology, taking into account economic changes, carbon prices, and tax cuts. Our case study in China demonstrates that neglecting adverse economic conditions leads to an underestimation of the investment threshold and option value. We find that tax cuts, implemented within the emissions trading system, serve as an effective tool to encourage steel firms to invest in energy efficiency technology in the short to medium term. This supports carbon mitigation efforts, particularly during challenging economic situations. The flexibility of the model allows for analysis of energy efficiency technology in diverse firms and countries, as parameters can be adjusted to suit individual requirements.

Private Firm Repayment Vulnerabilities and Adverse Economic Conditions

This note extends to private firms an analysis of the impact of macroeconomic conditions on corporate interest coverage ratios (ICRs), a measure of repayment risk developed by McCoy et al. (2020). Our analysis is complimentary. We utilize unique data on private-firm balance sheets obtained through the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) process and evaluate the impact of updated and new macroeconomic projections on the distribution and path of corporate interest coverage ratios.

The Role of Personal Characteristics in Shaping Gender-Biased Job Losses during the COVID-19 Pandemic: The Case of South Africa

This paper contributes to the literature on the effects of adverse economic conditions on gender differences in the labour market by assessing how COVID-19, a global trigger for a critical adverse condition, impacted gender differences in the labour market in a country with pronounced discrimination and inequality in the labour market. In fact, the paper investigates how the personal characteristics of women and men affected their likelihood of losing jobs during and before COVID-19 in South Africa. Using the database of the National Income Dynamics Study-Coronavirus Rapid Mobile Survey (NIDS-CRAM) and NIDS wave 5 dataset and based on logit regression, the paper finds that personal characteristics such as tertiary education had a negative effect on job losses among females. Moreover, the results show that, compared to male workers, female workers were the most affected by the pandemic due to the lockdown regulation that affected many households’ behaviour.

Economic hardship and intimate partner violence: An analysis of perpetrators in Germany

Objective: Based on the family stress model, we examine whether respondents are more likely to perpetrate physical IPV when experiencing economic hardship and pressure. Background: Research has demonstrated an association of intimate partner violence (IPV) and economic factors. However, as the bulk of studies is limited to the female victim’s perspective, the picture remains incomplete; factors driving gender-specific effects and perpetration rates have thus far been overlooked. Method: Using data from a large sample of individuals from the German Family Panel pairfam, which covers the period between 2009 and 2019, we employ pooled logistic regression models (n=6,661 individuals with 21,321 observations). Given the rich data source, we are able to control for a number of possible confounding effects. To correct for sample selection, we use calibrated design weights. Results: Our analyses show that IPV perpetration is associated with poverty and economic pressure among women, but not men. When accounting for confounding factors such as the Big 5 personality traits and childhood experiences, these associations become insignificant. For men, unemployment is linked to IPV perpetration, but only when personality traits and childhood experiences are not accounted for. Conclusion: Results imply that the association between adverse economic conditions and IPV perpetration is mainly due to unobserved heterogeneity. Thus, physical IPV perpetration is not primarily caused by the distress of financial strain, but rather by underlying factors such as personality traits and adverse childhood experiences, which are associated with both socioeconomic status, economic pressure, and aggressive behavior in intimate relationships.

Parental unemployment and adolescents' academic performance

PurposeDuring the Great Recession, the increase in Greece's unemployment rate was the highest in the European Union (EU). However, there exists no multi-variate study which has assessed the association between parental unemployment and adolescents' grades. The present study aimed to examine whether parental unemployment is associated with deterioration in adolescents' grades during periods of economic decline.Design/methodology/approachThe study utilised panel data from the same upper high schools in the periods 2011–2013 and 2017–2019 to assess whether the grades of adolescents were associated with parental unemployment. A variety of empirical specifications and robustness tests were employed to offer better informed evaluations.FindingsThe exogeneity of parental unemployment with respect to adolescents' grade was confirmed. The analysis revealed that parental unemployment was associated with a decline in adolescents' grades. Periods of economic decline, i.e. in 2011–2013, were found to be associated with deterioration in adolescents' grades. Moreover, during periods of economic decline, parental unemployment was associated with deterioration in adolescents' grades. Furthermore, parental unemployment was associated with lower adolescents' grades for those households that were not homeowners and whose schools were located in working-class areas. The outcomes were found to be robust, even after including information for government expenditure on education and social protection.Originality/valueThis is the first Greek study, and amongst the first international studies, to evaluate whether parental unemployment can lead to a deterioration in adolescents' grades during an economic decline. The potential long-lasting effects of parental unemployment on children's human capital should be considered by policymakers, as should educational interventions to support households experiencing adverse economic conditions.

The role of social responsibility accounting in mitigating the economic impacts of the COVID-19 pandemic in Jordan

The purpose of this research was to determine whether or not social responsibility accounting plays a part in reducing the negative effects of the COVID-19 epidemic on Jordan’s economy. The study’s secondary objective was to investigate the COVID-19 pandemic that broke out in Jordan. It is vital to find adequate remedies, just as it is necessary in other nations, in order to avert the damage that this pandemic might cause to society, individuals, and the economy. The methodology of the study centered on utilizing both descriptive and inferential techniques to data collection and analysis. Participants in the survey were 861 branch managers working for Jordanian and international banks that were licensed to do business in the country. Each participant utilized the Purposive Sample Approach while completing one of the 500 questionnaires that were handed out. The research identified a number of conclusions, including the fact that there is a statistically significant role for social responsibility accounting (economic and social) in reducing the negative effects of the COVID-19 epidemic on Jordan’s economy. According to the findings of the study, economic and social responsibility accounting both play a part in reducing the impact of adverse economic conditions such as unemployment, budget deficits, and the risk of consumer credit. This study is one of the most important studies in terms of its scientific contribution at the level of Jordan as a Middle Eastern country, as well as for all countries around the world in the process of developing solutions and strategies to mitigate the economic and social consequences of the coronavirus pandemic, as well as the possibility of many future crises, whether as a result of wars or the emergence of new viruses. This study makes a contribution to the formation of research frameworks that researchers from all over the world can use to search for solutions to reduce the effects of the coronavirus pandemic on the global economy as well as the spread of poverty and unemployment as a direct result of the pandemic. This research, which is also a scientific supplement, is intended for companies in all nations throughout the world in order to assist in mitigating the consequences of the coronavirus pandemic.

It is recreational but profitability also matters: A cost-effective economic approach to marine recreational fishing in Spain

This study analyses the costs of marine recreational activity in Spain for the main fishing modalities and provides a cost-effective economic indicator (CEI) for each of them. The activity costs of 4,999 fishers were collected through an online survey, along with other fishing information. The published results of this survey, catch rates and catch composition, have been used in this study. Daily expenses per fisher were estimated by dividing reported annual expenses by annual fishing days. The CEI was estimated as the ratio of the market value of one kilo of recreational catch to the cost of catching it. The CEI showed differences between modalities in all regions, but of varying magnitudes. It is concluded that the CEI could diagnose the risk level of evolving from recreational towards subsistence fishing. The higher the CEI, the more compensatory the activity and the greater the possibility of moving away from a purely recreational activity in adverse economic conditions.

Impact of the COVID-19 pandemic on pregnancy postponement - evidence from Japan.

Japan has faced a decline in fertility since the coronavirus disease 2019 (COVID-19) pandemic. This study aimed to investigate the rate of pregnancy postponement and its contributing factors, with a particular focus on economic- and COVID-19 infection-related indicators. This study used data from 768 observations of married women aged 18 to 50 years with pregnancy intentions. The data were obtained from two rounds of a large web-based survey conducted by the Japan COVID-19 and Society Internet Survey (JACSIS) in 2020 and 2021. A generalised estimating equation (GEE) model was employed, as well as Poisson regression models for sub-sample analysis divided by year to estimate the year differential magnitude of the contributing factors' impacts. Approximately 20% of married women with childbearing intentions postponed their childbearing. The analyses revealed that declining income and anxiety about future household finances were significantly related to delayed childbearing, while fear of COVID-19 and infection rate were not. Additionally, the adverse effects of unfavourable economic conditions were stronger in 2021. Notably, age did not influence the decision of pregnancy postponement. Older women postponed pregnancy just as much as younger women. In conclusion, this study confirmed that the COVID-19 pandemic, particularly its related adverse economic conditions, contributed to Japan's current baby bust. Considering that advanced maternal age is already common in Japan, this decreased fertility may result in the long-term negative consequence of further population decline.