Capital Injections Research Articles

Bank Bailouts and Economic Growth: Evidence from Cross-Country, Cross-Industry Data

In this paper, we revisit the question to what extent bank bailouts affect economic growth. We adopt a broad concept of bailouts, which includes both capital injections and liquidity support to the banking system, and employ an identification strategy that controls for the various dimensions of endogeneity of bailouts. We find that liquidity support has a significant positive real economic effect, while the effect of recapitalizations per se is not statistically significant. However, the positive impact of liquidity support is driven by crises where central bank liquidity injections are accompanied by recapitalizations of the banking system. Employing bank-level data, we provide evidence that this is the case because better capitalized banks and banks in significantly recapitalized systems are more likely to provide loans, thus raising aggregate-level real economic growth.

Інвестування нафтогазовидобутку в ТНК: тенденції, еколого-економічні проблеми та пріоритети

It is substantiated that the intensification of the global environment protection movement in recent decades, the key component of which is the development of tools for transferring national economies to a model of low-carbon development, has had a decisive impact on the dynamics of investment in projects for the development of natural resource potential, primarily hydrocarbons. It has been found that the reduction of dependence of individual countries of the world on oil and natural gas directly depends on the diversification of energy sources to meet the needs of socioeconomic development through the development of the industry for the production of energy from renewable sources. It is proved that the decrease in the volume of production of hydrocarbons and energy carriers produced on its basis is an important factor in the transition of national economies to the model of low-carbon development, in particular, reducing the negative impact on climate processes. It is found that in the sector of «hydrocarbon» TNCs (BP, Shell and Chevron) during 2011–2022 there was a generally downward trend in the dynamics of investments in oil and natural gas production, which has led to significant conjunctural fluctuations in the global markets of hydrocarbons and to structural shifts in the energy balance of many countries of the world. It has been found that BP, Shell and Chevron, along with investing in oil and gas production, finance projects related to the production of energy from alternative sources, which has led to a reduction in capital injections into fossil fuel production and diversified the investment portfolio of these companies, minimizing the risks of reducing their capitalization in the context of diversification of the range of energy carriers in the global and national energy markets. It is proved that the decrease in the volume of investment in oil and gas production in the sector of «hydrocarbon» TNCs (BP, Shell and Chevron) has led to a reformatting of the global energy landscape and created additional prerequisites for increasing the amount of funding for alternative energy projects and solving a set of ecological and economic problems associated with the transition to a low-carbon development model.

Investor information and bank instability during the European debt crisis

Outside of financial crises, investors have little incentive to produce private information on banks’ short-term liabilities held as information-insensitive safe assets. The same does not hold during crises. We compare the information effects of different policy interventions. We measure information production using credit default swap spreads during the Global Financial Crisis and the European debt crisis. We study abnormal information production around major events and find that capital injections reduced abnormal information production while early European stress tests increased it. High levels of information production predict bank balance sheet contraction and higher government expenditures to support financial institutions.

Reimagining the SME failure phenomenon: incorporating regenerative effects and predicting enterprise regenerative capacity

PurposeExposure to a public health threat of significant proportions made current models inadequate to explain the failure phenomenon in small businesses. Hence, the need to reimagine the phenomenon. Borrowing from the principles of biology, this study extended theoretical and empirical perspectives on the failure phenomenon by unpacking its constituent elements and the measurement metrics using the regeneration lens.Design/methodology/approachBased on a cohort tracked over time, the study estimated the survival probabilities of small and medium-scale enterprises (SMEs) with and without regeneration using the Kaplan–Meier method. The study investigated the factors that predict enterprise regenerative capacity using the multivariate Cox proportional hazard ratios.FindingsRates of interruption in business activity, by month, ranged between 0% and 18% during the follow-up period. True mortality rates hovered between 0% and 4% over the same period. Over three in five SMEs that experienced interruption in business activity without ceasing operations regenerated at some point in time during the follow-up period. The survival probabilities beyond the follow-up period were 0.85 and 0.44 with and without regeneration effects, respectively. Fresh capital injection (+), the introduction of new/improved processes or products/services (+), perceived business outlook (+) and the presence of debt (−) influenced the capacity to regenerate.Research limitations/implicationsThe cohort was followed for only six months. There is a need to continue interrogating the failure phenomenon in other contexts over longer periods using the regeneration lens. Bringing on board academia, financial institutions and other SME-related ecosystem players will be strategic.Practical implicationsThe approach provides a more nuanced understanding of the life and well-being of enterprises under conditions of disruption. Improving the precision and validity of failure-related statistics enhances their utility in policy and remediation-related discussions.Social implicationsThe results did not show significant differences in SME mortality rates between male and female-owned enterprises. The results provide further evidence that the failure phenomenon is ungendered. As such, financial institutions and the SME ecosystem at large must eliminate perceptual gender biases in the financing and other support to SMEs.Originality/valueThe study used the principles of biology to reimagine the failure phenomenon in small businesses. The approach breathes life into entrepreneurship research and policy.

An improved light gradient boosting machine algorithm based on swarm algorithms for predicting loan default of peer-to-peer lending

Internet finance and big data technology are booming in the world. The launch of peer to peer (P2P) lending platforms is a sign and a great opportunity for entrepreneurs to easily increase their capital injection. However, this great opportunity has a high risk of impacting the sustainability and security development of the platform. One way to minimize loan risk is to predict the possibility of loan default. Hence, this study aims to find the best predictive model for predicting loan default of P2P Lending Club dataset. An improved light gradient boosting machine (LightGBM) via features selection by using swarm algorithms i.e. Ant colony optimization (ACO) and bee colony optimization (BCO) to the prediction analysis process. The best feature selection process is selected 6 out of 18 features. The synthetic minority oversampling technique (SMOTE) method is also provided to solve the unbalance class problem in the dataset, then a series of operations such as data cleaning and dimension reduction are performed. The experimental results prove that the LightGBM algorithm has been successfully improved. This success is shown by the prediction accuracy of LightGBM+ACO is 95.64%, LighGBM+BCO is 94.70% and LightGBM is 94.38%. This success also demonstrates outstanding performance in predicting loan default and strong generalizations.

Optimal impulse dividend and capital injection model with proportional and fixed transaction costs

In this paper, a hybrid strategy with optimal proportional reinsurance, dividends, and capital injections is discussed by a diffusion model with impulse process of discrete dividend events and discrete capital injections. Due to the presence of fixed transaction costs, the problem is formulated as a more complicated impulse stochastic control problem. By using methodologies from impulse control theory and the techniques of translation transformation, we obtain the explicit solutions of the value function and the corresponding optimal strategy. Firstly, the original problem is transformed into two types of suboptimal impulse control problems, one of which is “the case without capital injections” and the other one of which is “the case with compulsory capital injections.” Then, by verification theorem and the expressions of value functions of these two suboptimal problems, we verify that the optimal solution of the original problem is either “keeping bankruptcy without injections” or “never bankruptcy with injections.” It depends on the parameters of the model.

On a doubly reflected risk process with running maximum dependent reflecting barriers

This paper investigates a spectrally negative Lévy process that is reflected from above when it is about to up-cross a dynamic upper barrier and is reflected from below when it is about to down-cross a dynamic lower barrier. These reflecting barriers are determined by pre-specified functions of the maximum value in historical record of the underlying spectrally negative Lévy process. Applying the techniques recently developed in fluctuation and excursion theories, we obtain the expressions for the solutions to the expected total amount of discounted dividends and capital injections and the nth moment of the accumulated discounted dividends. Moreover, the joint Laplace transform of the accumulated non-discounted dividends and capital injections prior to some exiting time and the associated potential measure are derived. These results are expressed in terms of scale functions associated with the spectrally negative Lévy processes. Finally, some numerical examples are provided to illustrate the economic implications of model parameters.

On the surplus management of funds with assets and liabilities in presence of solvency requirements

In this paper, we consider a company whose assets and liabilities evolve according to a correlated bivariate geometric Brownian motion, such as in Gerber and Shiu [(2003). Geometric Brownian motion models for assets and liabilities: From pension funding to optimal dividends. North American Actuarial Journal 7(3), 37–56]. We determine what dividend strategy maximises the expected present value of dividends until ruin in two cases: (i) when shareholders won't cover surplus shortfalls and a solvency constraint [as in Paulsen (2003). Optimal dividend payouts for diffusions with solvency constraints. Finance and Stochastics 7(4), 457–473] is consequently imposed and (ii) when shareholders are always to fund any capital deficiency with capital (asset) injections. In the latter case, ruin will never occur and the objective is to maximise the difference between dividends and capital injections. Developing and using appropriate verification lemmas, we show that the optimal dividend strategy is, in both cases, of barrier type. Both value functions are derived in closed form. Furthermore, the barrier is defined on the ratio of assets to liabilities, which mimics some of the dividend strategies that can be observed in practice by insurance companies. The existence and uniqueness of the optimal strategies are shown. Results are illustrated.

Pengembangan Model Penyaluran Kredit Bagi UKM Untuk Mengantisipasi Perkembangan Lembaga Keuangan Informal

The classic problem that cannot be denied and that continues to plague some Small and Medium Enterprises (SMEs), is the problem of capital, which results in not achieving the expected goals. Some SMEs that can meet the requirements can use banking services (banks) to meet their business capital needs and not a few SMEs also use informal financial institutions, which in this case are loan sharks for their business capital, although we know the interest expense set is relatively higher than Banks, because the procedures and requirements are easy, some SMEs use informal financial institutions or loan shark services. This study aims to provide input and develop the most relevant credit distribution model that can help some SMEs in fulfilling their business capital in Deli Serdang Regency, and it is hoped that in the future the government and other stakeholders will have to focus on solving these problems. However, the SME sector is one of the supporters of economic growth in an area, especially in Deli Serdang Regency. This study uses the Research and Development (R&D) method. Data collection techniques generally use field studies with the distribution of research instruments (questionnaires) to the sample, in this case, SMEs in Deli Serdang Regency. Data analysis The research instruments that have been collected will be analyzed using descriptive analysis methods. Of the 70 entrepreneurs who became respondents, only 10.9% believed that the capital they had was sufficient to develop their business, 64.6% said they still needed injections even though they already owned them and 24.6% even stated that capital injections were a very urgent need for survival his efforts.

A Public–Private Insurance Model for Disaster Risk Management: An Application to Italy

This paper proposes a public–private insurance model for earthquakes and floods in Italy in which the insurer and the government co-operate in risk financing. Our model departs from the existing literature by describing an insurance scheme intended to relieve the financial burden that natural events place on governments, while at the same time assisting individuals and protecting the insurance business. Hence, the business aims at maximizing social welfare rather than profits. Given the limited amount of data available on natural risks, expected losses per individual are estimated through risk-modeling. In order to evaluate the insurer’s loss profile, spatial correlation among insured assets is included. Our findings suggest that, when not supported by the government, private insurance might either financially over-expose the insurer or set premiums so high that individuals would fail to purchase policies. This evidence is stronger for earthquake risks, but it is considerable for floods too. We found that jointly managing the two perils alleviates the burden on public capitals by lowering the amount of capitals required and by keeping the probability of additional capital injections into the insurance reserves relatively low.

Analysis of Factors Influencing the Development of mHealth Innovation Based on Data Mining Algorithms

Data mining algorithms combine expertise in machine algorithm learning, software modeling pattern recognition, statistical analysis principles, database construction, and artificial intelligence. With the rapid development of Internet technology and the common application of cell phones, mobile medical, a new medical method based on this technology, has been spawned, which greatly facilitates multiple aspects of medical services such as doctor diagnosis, patient treatment, disease care, and health management of critically ill patients and also alleviates the imbalance of medical resources. This paper firstly starts from the background of rapid development of information technology and mobile technology, combines the theoretical knowledge of data mining algorithm and mobile medical, as well as previous research reviews, and presents the main research content of this paper: analysis of factors influencing the development of mobile medical innovation based on data mining algorithm. Based on the K-means algorithm in the data mining algorithm and the Apriori algorithm in the association algorithm, this paper analyzes the current situation and problems of mobile medical development in China based on the algorithm model, analyzes the influencing factors of mobile medical innovation development in China based on the algorithm model, and summarizes and concludes the influencing factors of mobile medical innovation development and concludes that there are four categories of mHealth innovation development influencing factors: demand influence, policy orientation, technological innovation, and capital injection.

Healthcare clinic and pharmacy chains in Kenya and Nigeria: A qualitative exploration of the opportunities and risks they present for healthcare regulatory systems.

Regulating fragmented healthcare markets is a major challenge in low- and middle-income countries. Although a recent transformation towards consolidation could improve regulatory efficiency, there are concerns over risks to client safety and market functioning. We investigated market consolidation through the emergence of clinic and pharmacy chains in Kenya and Nigeria and explored resultant regulatory opportunities and risks. The study was conducted in Nairobi Kenya and Abuja Nigeria. Data were collected through document reviews and 26 interviews with chain operators, professional associations and regulators between September and December 2018. A thematic analysis was conducted. We characterised two broad types of chains: organic chains that started as single business locations and expanded gradually, and investor-driven chains that expanded rapidly following external capital injection. In both countries, chains and independents were regulated similarly, with regulators failing to both capitalize on opportunities and guard against risks. For instance, chains' brand visibility and centralised management systems made them easier to regulate and more suitable for self-regulation. On the other hand, chains were perceived to pose the risks of market dominance, commercialisation of healthcare, and regulatory capture. As healthcare chains expand, regulators should build on opportunities presented and guard against emerging risks.

Optimal singular dividend control with capital injection and affine penalty payment at ruin

In this paper, we extend the optimal dividend and capital injection problem with affine penalty at ruin in (Xu, R. & Woo, J.K. (2020). Insurance: Mathematics and Economics 92: 1–16) to the case with singular dividend payments. The asymptotic relationships between our value function to the one with bounded dividend density are studied, which also help to verify that our value function is a viscosity solution to the associated Hamilton–Jacob–Bellman Quasi-Variational Inequality (HJBQVI). We also show that the value function is the smallest viscosity supersolution within certain functional class. A modified comparison principle is proved to guarantee the uniqueness of the value function as the viscosity solution within the same functional class. Finally, a band-type dividend and capital injection strategy is constructed based on four crucial sets; and the optimality of such band-type strategy is proved by using fixed point argument. Numerical examples of the optimal band-type strategies are provided at the end when the claim size follows exponential and gamma distribution, respectively.

COVID-19, Macroeconomic and Sustainability Shocks, Moral Hazard and Resolution of Systemic Banking Crises: Designing Appropriate Systems of Public Support

Banks have so far weathered well the financial turbulence caused by COVID-19 while at the same time being central in the economic and financial response. As the crisis moves from its initial phase as a short-term liquidity shock, the financial sector is facing increasing volumes of non-performing loans, raising the spectre of a banking solvency crisis. In economies already burdened with low-quality assets, the COVID-19 fallout is intensifying existing problems with legacy loans heightening the risk of a banking crisis. These issues are now being worsened by the impact of inflation and the invasion of Ukraine. Thus, addressing increasing volumes of bad loans, while supporting the proper functioning of the financial system, is a major challenge with systemic repercussions for a range of economies. This paper identifies a great paradox: since the bank rescues of the 2008–9 Global Financial Crisis there has been a disproportionate focus on the liability side of bank balance sheets through resolution measures such as bail-in and the accumulation of bail-inable debt. Post-crisis bank resolution regimes have overlooked solutions lying within the asset side of bank balance sheets. This paper analyses historical evidence to argue that concentrating on a liability-focused approach to the exclusion of asset-side solutions is ill-conceived. An excessive accumulation of non-performing loans on the asset side of bank balance sheets inevitably renders resolution interventions on the liability/equity side ineffective or at the very least insufficient to maintain banking system viability and financial stability. Bank asset restructuring involving the use of asset management companies, asset protection schemes and even capital injections can play a critical role in achieving an expeditious restoration of banking systems’ health following a major macroeconomic, sustainability or financial crisis.

IMPLEMENTASI AKUNTANSI SEBAGAI STRATEGI BISNIS UMKM

This research is motivated by various problems faced by MSMEs in bread, tofu, sasak culinary, cowhide crackers, and welding in the Mataram City Region. Especially the problem of limited access to capital, the absence of preparation of financial statements so that the business that is run is stagnant and does not develop even though it has been occupied for 10-20 years. Therefore, researchers are interested in carrying out research with the theme "Accounting as a Business Strategy" using a qualitative method of phenomenological approach with the results of research that accounting forces MSME actors to improve their management systems, make financial reports that can be used as a basis for making business decisions, and can be used by other parties. banks to analyze the feasibility of granting credit to MSME actors so that access to capital injections is wide open

Parisian excursion with capital injection for drawdown reflected Lévy insurance risk process

ABSTRACT This paper discusses Parisian ruin problem under drawdown with capital injection when the underlying source of randomness of the surplus is modeled by a general Lévy insurance risk process. Capital injection is provided at the first instance the surplus drops below the drawdown level that is a pre-specified function of its current maximum. The capital is continuously injected to keep the surplus above the drawdown level until either it goes above its current maximum or a Parisian type ruin occurs, which is announced at the first time the surplus process has undergone an excursion below its current maximum for an independent exponential period of time consecutively since the most recent drawdown time. Some distributional identities concerning this excursion are presented. Firstly, we give the Parisian ruin probability and the joint Laplace transform (possibly killed at the first passage time above a fixed level for the surplus process) of the ruin time, the surplus position at ruin, and the total capital injection at ruin. Secondly, we obtain the q-potential measure of the surplus process killed at Parisian ruin. Finally, we give the expected present value of the total discounted capitals injected up to the Parisian ruin time. The results are derived using recent developments in fluctuation and excursion theory of spectrally negative Lévy process and are presented semi-explicitly in terms of the scale function of the Lévy process. Some numerical examples are given to facilitate the analysis of the impact of initial surplus and frequency of observation periods to the ruin probability and to the expected total discounted capital injection.

Effectiveness of productive infaq distribution for mustahik economy improvement (case study of Baitul Mal Aceh Tamiang Regency )

Purpose – The purpose of this research is knowing the level of effectiveness and implementation of the productive infaq distribution program in improving the mustahik economy.
 Method – This research uses descriptive qualitative research, is a research that describes the state of the object of research at the present time as it is based on the results of observations, interviews, and documentation. 
 Result – The results showed that the distribution of productive infaq has been effective, it can be seen from the increase in the income of mustahik after receiving productive infaq from Baitul Mal Aceh Tamiang. The results also show that the distribution of productive infaq aims to help the poor who have small and medium businesses to provide capital injections to suppress the movement of moneylenders and increase family income.
 Limitation – This research has limitations in terms of the relatively small number of research subjects, then the research subjects are mustahik from the Baitul Mal Aceh Tamiang food security program which will be distributed productive infaq to mustahik who are entitled to receive it.
 Practical Implication – As a practical implication, the results of this study can be used as a reference by the government, especially zakat institutions in distributing productive infaq to improve the mustahik economy. So that by maintaining all existing SOPs, it provides an optimal impact in the distribution process of all kinds of activities.

Dividend and Capital Injection Optimization with Transaction Cost for Lévy Risk Processes

The optimal dividends problem has remained an active research field for decades. For an insurance company with reserve modelled by a spectrally negative Lévy process having finite first-order moment, we study the optimal impulse dividend and capital injection (IDCI) strategy for maximizing the expected accumulated discounted net dividend payment subtracted by the accumulated discounted cost of injecting capital. In this setting, the beneficiary of the dividends injects capital to ensure a non-negative risk process so that the insurer never goes bankrupt. The optimal IDCI strategy together with its value function is obtained. Besides, two numerical examples are provided to illustrate the features of the optimal strategies. The impacts of model parameters are also studied.

‘The community comes to life’: How Social Grants Enable Participation in the Local Economy and Possible Effect on Post-COVID-19 Economic Recovery in Soweto South Africa

South Africa has an extensive social grant program reaching over 45 percent of the population and which has mitigated high poverty in the post-apartheid epoch. Yet the impacts on urban poor community economic activities are yet to be duly appreciated. As the major capital injection into the local economy amidst a high rate of poverty and unemployment, the fund serves as the catalyst that enables both beneficiaries and non-beneficiaries to participate in economic activities. A qualitative study was carried out in Soweto to explore linkages between social grants and participation in local economic activities. The findings show a strong nexus between social grants and participation in local economic activities. The key relevance of this study rests on its evidence-based suggestion of the positive impact of social grants on post-COVID-19 economic recovery, especially in poor urban communities such as Soweto.

Linearisation Techniques and the Dual Algorithm for a Class of Mixed Singular/Continuous Control Problems in Reinsurance. Part I: Theoretical Aspects

This paper focuses on linearisation techniques for a class of mixed singular/continuous control problems and ensuing algorithms. The motivation comes from (re)insurance problems with reserve-dependent premiums with Cramér-Lundberg claims, by allowing singular dividend payments and capital injections. Using variational techniques and embedding the trajectories in an appropriate family of occupation measures, we provide the linearisation of such problems in which the continuous control is given by reinsurance policies and the singular one by dividends and capital injections. The linearisation translates into a dual dynamic programming (DDP) algorithm. An important part of the paper is dedicated to structural considerations allowing reasonable implementation. We also hint connections to methods relying on moment sum of squares and LMI (linear matrix inequality)-relaxations to approximate the optimal candidates.