ABSTRACT Using quarterly South Korean data spanning from 2000 to 2020, we empirically show an intertemporal trade‐off between household debt and economic growth. Beneath this result lies the dynamic interplay between banks, driven by their incentive to expand loan supply—particularly, in the housing mortgage sector—and policy authorities, who implement macroprudential regulations in response to a rapid increase in household debt. This channel—the so‐called ‘credit supply channel’—is key in explaining predictable fluctuations in credit supply and changes in the household debt ratio. Employing a three‐step regression specification, we document that the credit supply channel accounts for 72% of the growth rate sensitivity over the next 2 years to the household debt ratio.

ABSTRACT This paper provides new evidence on the effects of public investment shocks on output, unemployment, private investment, and public debt in the European Union. Using forecast errors, we identify public investment shocks and estimate their effects in the 27 EU member countries. The results indicate that public investment shocks (a) boost output and reduce unemployment in the short to medium run, (b) do not crowd out private investment, and (c) do not jeopardize public debt sustainability.

Adopting a loanable funds model, this exploratory empirical study investigates the impact of economic freedom on the real interest rate yield on high-grade tax-exempt municipal bonds in the U.S. The AR/2SLS and FMOLS estimations imply that greater economic freedom leads to a lower ex post real interest rate yield on tax-exempt municipal bonds. Other interesting findings include the following: the real interest rate yield on tax-frees was an increasing function of both the ratio of the national debt to GDP and the ratio of the budget deficit to GDP while being a decreasing function of quantitative easing policies. Policy implications of these results include the need to limit the extent of the federal budget deficits in the U.S. lest there will be, among other things, significant limitations placed on the ability of towns, cities, counties, and states to finance outlays in response to changing demographic and economic circumstances and/or maintaining existing infrastructure.

Business management refers to the systematic planning, organizing, directing, and controlling of an organization’s resources—human capital, finance, operations, and information—to achieve defined goals efficiently and effectively. It is a key function in both small and large organizations, helping organizations adapt, grow, and remain competitive in changing markets. A well-structured business management approach includes key areas such as strategic planning, leadership, decision-making, innovation, and performance monitoring. Managers are responsible for coordinating different departments, aligning efforts with the organization’s vision, and implementing policies that improve productivity and customer satisfaction. They also play a key role in risk management, financial oversight, and motivating teams to achieve goals. In today’s dynamic environment, effective business management must embrace technological advances, sustainability, and global trends. It also involves fostering adaptability and continuous improvement in response to market needs and organizational challenges. This summary highlights the importance of business management as a discipline that integrates various functions to lead organizations toward success. Whether through innovation, resource optimization, or strategic execution, strong management practices are essential for long-term sustainability and growth. Research Significance: Understanding prudential behavior in banking is crucial for anticipating financial instability and guiding regulatory policies. This research is important as it highlights how banks’ responses to liquidity and credit constraints can lead to systemic imbalances, particularly in interbank markets. By using Gray Relational Analysis (GRA), this study provides a comparative assessment of several banks based on financial indicators such as liquidity, capital adequacy, operational risk, and debt ratio. The findings have policy relevance, particularly for emerging markets and crisis-prone economies, providing strategies to improve bank stability and the efficiency of money transfer mechanisms under varying economic conditions. Mythology: Alternative: Internal, Improving, Increasing, Combining, Integrated. Evaluation Parameters: very high, high, very low, low. Result: The results indicate that internal achieved the highest rank, while increasing the lowest rank being attained. Conclusion: “The value of the dataset for business management, according to the COPRAS relational analysis Method, Bank B achieves the highest ranking.”

Objective: There is little evidence on the choice of tools to mitigate agency problems. Because these tools are chosen by the CEOs (chief executive officers), we believe that their personality matters. We include the narcissism of the CEO to check whether it is an important factor affecting these kinds of decisions. The research aims to determine what tools to mitigate agency problems are chosen by narcissistic CEOs. We consider debt, dividends, and managerial ownership as potential tools for mitigating agency problems. Research Design & Methods: Our sample covers 56 Polish companies over the six years of 2017–2022. We employ linear mixed models analysis. Findings: We find that narcissistic CEOs refrain from ownership in the company they manage. They have no impact on the debt ratio and dividend payouts. Implications / Recommendations: We believe that narcissistic CEOs use managerial ownership tools to diminish their risk (in order not to be associated with it in case something goes wrong). However, this increases the agency problems. Owners should be aware of such behaviour, bearing in mind the negative impact of a narcissistic CEO on the team and work efficiency. Contribution: Our research contributes to the upper-echelon (top management) theory and corporate behavioural finance. The contribution lies in combining corporate finance issues (e.g., agency relation, debt ratio, dividend) and behavioural finance (CEO personal traits).

This paper compares three leading technology companies- Microsoft, Intel, and Dell Technologies-to understand why different investors prefer different technology stocks. The study shows how a company’s financial performance affects investor choices and offers useful ideas for making investment decisions in the technology sector. By looking at key financial numbers-such as risk measures (market size, beta, debt ratio), profit measures (asset turnover, ROA, ROE), and market value ratios (P/E, P/B, PEG), this research finds clear patterns in what investors prefer. The results show that Microsoft attracts many types of investors, including PEG, DCF, and smart money investors. Intel is mainly liked by value and insider investors. Dell is mostly preferred by momentum investors. These findings help us see how financial features influence investor behavior and give practical advice for investors who want to match technology stocks with their own risk and return goals. This can help them build stronger and more personalized investment portfolios.

This study empirically examines the impact of the debt ratio on corporate profitability among Indonesian small and medium-sized enterprises (SMEs) from 2015 to 2024, with a focus on the underlying mechanisms and boundary conditions. The findings indicate that a higher debt ratio significantly reduces Return on Assets (ROA), suggesting that excessive reliance on debt financing undermines profitability and operational efficiency by amplifying interest burdens and increasing financial risk. Heterogeneity analysis shows that this negative effect is stronger among firms with low growth, low liquidity, and low net worth growth, as well as those in industries without high leverage business models. Mechanism tests confirm that the interest coverage ratio partially mediates the link between the debt ratio and ROA, validating the transmission channel wherein elevated debt levels weaken interest coverage capacity, which in turn erodes profitability. The findings suggest that Indonesian SMEs should manage debt levels prudently and strengthen internal growth capacity, while policymakers should refine financial support policies to promote sustainable enterprise development.

Purpose: This paper explores the role of financial accounting and reporting in under-standing SMEs’ indebtedness and its impact on profitability. The paper reviews prior accounting-based research, analyzes the level of debt among Croatian SMEs, examines their use of leverage to enhance profitability, and quantifies its contribution relative to other factors. Methodology/approach: The analysis covers 3,094 Croatian manufacturing companies for 2020–2024. Data from financial statements were used to calculate key financial ratios: ROE, ROA, net profit margin (NPM), total assets turnover (TAT), debt ratio (DR), and financial leverage index (FLI). The methodology included descriptive statistics, Pearson and Spearman correlation, and OLS regression analysis. Findings: On average, companies finance about half of their assets with debt, with small companies showing the highest levels of indebtedness. Most companies achieve positive leverage effects, but the relationship between company size and FLI is neither linear nor monotonic. Regression analysis indicated that, although DR has a positive impact on ROE, operational efficiency, as measured by NPM and TAT, has a larger and more dominant impact on profitability across all company groups. Research limitations/implications: The research is limited to one industry, a specific period, and accounting data from financial statements. The findings indicate that companies, especially SMEs, should primarily focus on improving operational efficiency to maximize ROE. Originality/value: This paper provides new insights by connecting financial accounting concepts of leverage and profitability, with a focus on SMEs, which are often studied separately or without considering their unique reporting characteristics. Such analysis can help SMEs make informed financial decisions.

This research aims to examine the impact of financial flexibility on enhancing risk-adjusted profitability for a sample of six commercial banks for the period 2005–2024. Financial flexibility was measured through a number of related indicators, such as leverage (using the debt ratio) and liquidity (using the funding gap ratio), while risk-adjusted profitability was measured using indicators (risk-adjusted return on assets and risk-adjusted return on equity). The research relied on data from the annual reports of the sample banks listed on the Iraq Stock Exchange, employing appropriate statistical methods using) Eviews v.12) & (Excel v.16) to test the research hypotheses. The research reached a set of results, the most important of which is the existence of a statistically significant effect of financial flexibility in enhancing risk-adjusted profitability. Based on the results, the research presented a set of recommendations, the most important of which is that bank management should use risk-adjusted profitability indicators as a tool to accurately assess profitability, which helps in making informed investment and financing decisions.

This study empirically analyzes the effects of production efficiency and financial health on credit evaluation of Korean manufacturing start-ups. Grounded in signaling theory, the research examines 150,428 observations from 22,787 manufacturing firms over an eight-year period (2016-2023) using panel fixed-effects models. Production efficiency levels were classified through K-means clustering, with start-ups defined as firms aged seven years or less, to test the interaction effects between production efficiency and start-up status. The findings reveal that manufacturing start-ups experience credit rating penalties compared to established firms, regardless of production efficiency levels. However, the marginal effect of production efficiency improvements on credit rating enhancement was significantly stronger for start-ups. The debt ratio, a financial health indicator, demonstrated approximately 3.8 times greater influence than the maximum production efficiency effect, while the profitability metric ROA was not statistically significant, confirming that financial stability is prioritized in manufacturing credit evaluation. This study empirically demonstrates that production efficiency serves as a crucial signal of start-up potential under information asymmetry conditions, establishing the necessity for refined credit evaluation and entrepreneurial finance mechanisms. The findings suggest the need for differentiated start-up support policies and credit evaluation model development focused on production efficiency enhancement.

In the era of globalization, regional economic cooperation frameworks such as the Asia-Pacific Economic Cooperation (APEC) have become strategic instruments for developing countries to expand market access and attract foreign investment. However, participation in trade liberalization also poses challenges to national economic sovereignty, particularly in terms of fiscal control, foreign capital dominance, and export dependency. This study aims to identify the principal dimensions of APEC trade policy dynamics and evaluate their impact on Indonesia’s economic sovereignty. The method employed is Principal Component Analysis (PCA) applied to five key variables: APEC tariff rates, Foreign Direct Investment (FDI), export-to-GDP ratio, global competitiveness index, and external debt-to-GDP ratio. The analysis reveals three principal components: (1) liberalization and export dependency (48.2%), (2) foreign capital dominance and fiscal pressure (37.4%), and (3) institutional capacity and national competitiveness (14.4%). PCA biplot visualization indicates that Indonesia and Vietnam have shifted from protectionism toward high integration, albeit with increasing fiscal pressure and external dependency. The United States remains dominant in competitiveness, despite facing a rising debt ratio. This study offers a novel quantitative approach to mapping structural pressures on national economic sovereignty, integrating dependency theory, economic sovereignty, and global competitiveness within the PCA framework. The findings provide a foundation for formulating trade policies that balance openness with national economic autonomy.

Leverage decisions create a critical challenge for banks’ profitability in the Nigerian banking sector, as undue reliance on debt financing intensifies financial risk and instability, while insufficient leverage limits returns. The relevance of financial leverage lies in the tax deductibility associated with debt, as it allows firms to deduct interest payments before paying tax. An ex-post facto research design was adopted. Secondary data from 25 deposit money banks were used from 2004 to 2023. Building on this concept, the study examined the impact of leverage decisions on the performance of commercial banks in Nigeria, acknowledging that bank profitability is crucial for financial stability and economic development. The Pooled Ordinary Least Squares (POLS) Regression technique and descriptive statistics were employed. The regression results revealed that leverage decisions had a positive impact on bank returns, with a 1% increase in leverage decisions leading to a 0.3143% (β = 0.3143, p < 0.001) increase in bank profitability. Furthermore, the findings revealed that the ratio of Equity to Total Assets (EQTA) and the ratio of Long-term Debt to Total Assets (LTDTA) have a significant negative effect on Return on Assets (ROA), while the ratio of Equity to Total Debt (EQTD) has a positive but insignificant effect on ROA. This result implies that Bank managers should adopt strategic leverage decisions as part of financial planning to enhance returns. Policymakers and bank regulators should design policies that encourage banks to enhance their capital structure, complementing debt and equity to maximize returns without compromising financial stability.

Purpose This study offers an empirical examination of the causal relationship between financial risks and firm performance among industrial firms listed on the Amman Stock Exchange credit risks and financial risk ratios are used to gauge overall financial risk, while the performance measure employed is stock market return. Design/methodology/approach Secondary data were collected from the annual financial statements of Jordanian industrial firms for the period 2009–2022. The generalized method of moments (GMM) was used for coefficient estimation to account for endogeneity and unobserved heterogeneity. Additionally, the panel causality test proposed by Dumitrescu and Hurlin (2012) was applied to determine the direction of causality. Findings The results reveal a homogeneous causal relationship between firm performance and financial risks. Specifically, credit risk, total loans, and short-term debt ratios positively influence stock returns. In contrast, long-term debt and firm size are found to negatively affect market performance. Finally, the quick ratio and liquidity ratio exhibit insignificant effects on stock market return. Practical implications This study provides valuable insights for the management and stakeholders of industrial firms in decision-making processes. Credit risk should be closely monitored, and short-term debt may represent a more effective financial strategy than long-term debt. Originality/value While most prior studies have relied on OLS and fixed effects models to analyze the impact of financial indicators on firm performance, this study is among the first to use a dynamic GMM approach. The findings offer important implications and recommendations for owners and managers of industrial firms, enabling them to assess the risks and opportunities associated with debt financing and to leverage the potential benefits of credit risk management.

Purpose This study aims to investigate the impact of digital government on the fiscal sustainability of local governments and to propose policy measures to enhance such sustainability. Design/methodology/approach Based on panel data from 188 prefecture-level cities in China spanning the period from 2013 to 2022, this study uses a two-way fixed effects model and related econometric methods to explore the influence of digital government on local fiscal sustainability from two dimensions: debt ratio and fiscal space. Findings The results reveal that digital government enhances fiscal sustainability primarily through two mechanisms: improving administrative efficiency and strengthening government integrity. These mechanisms effectively curb the growth of local government debt and expand fiscal space. Heterogeneity analysis further indicates that the debt-suppressing effect of digital government is more pronounced in regions with high reliance on land finance or foreign trade, whereas its effect on expanding fiscal space is relatively weaker in these regions. Originality/value This research offers both theoretical insights and practical implications for developing countries seeking to enhance local fiscal sustainability and promote long-term economic development.

This study provides a comparative analysis of external debt dynamics in SAARC countries from 2013 to 2023, using the IMF’s 40 percent external debt-to-GDP threshold as a benchmark for assessing debt sustainability. Using secondary data, the paper examines country-wise trends, identifies high-risk and low-risk economies, and evaluates external vulnerabilities across the region. The results show that Afghanistan, Bangladesh, India, and Nepal consistently maintain debt ratios below the 40 percent threshold, indicating a low-risk external debt position. In contrast, Bhutan, Maldives, and Sri Lanka exhibit significantly high debt ratios, placing them in the high-risk category throughout the study period. Pakistan demonstrates a moderate-risk profile, with its debt levels approaching the sustainability threshold in recent years. The analysis highlights the structural, fiscal, and external sector factors driving cross-country differences. Policy implications emphasize the need for improved debt transparency, export diversification, prudent borrowing, and strengthened regional cooperation to ensure long-term debt sustainability in the SAARC region.

Taking Chinese A-share listed companies from 2014 to 2024 as the sample, this study examines the impact of short-term debt ratio on corporate investment scale and the heterogeneous effect of property rights. The two-way fixed effects model and instrumental variable method (2SLS) are adopted to address endogeneity issues. The results show that: in the direct regression, the short-term debt ratio is significantly negatively correlated with investment; after addressing endogeneity, the two exhibit a significant positive correlation. Under the heterogeneity of property rights, the positive effect of short-term liabilities share on corporate investment is more pronounced in private enterprises than in state-owned enterprises. This study reveals the endogenous interference in the interplay between short-duration debt and investment, and provides a basis for formulating differentiated financing policies.

This study aims to examine the influence of green accounting, environmental costs, capital structure, and firm size on financial performance in mining companies listed on the Indonesia Stock Exchange during 2020-2024. A quantitative approach with multiple linear regression analysis was employed to test the relationships among variables. The results reveal that jointly the four variables significantly affect financial performance, but only capital structure has a negative and significant individual effect. Green accounting, environmental costs, and firm size show no significant impact. These findings suggest that environmental sustainability practices have not yet provided direct financial benefits, while a higher debt ratio reduces profitability. The study reinforces stakeholder and legitimacy theories, emphasizing that sustainability practices primarily build social legitimacy and public trust. Practically, firms should balance their capital structure and integrate environmental responsibility into long-term financial strategies.

The growing prominence of environmental, social, and governance (ESG) considerations has introduced new challenges for firms worldwide. While ESG practices are often framed as long-term drivers of competitiveness, uncertainty surrounding their regulatory requirements has created significant operational risks. The primary objective of this study is to examine how ESG uncertainty (ESG) affects inventory management in listed firms. The study analyzed data from Chinese A-share listed companies over the period 2010 to 2024. A series of econometric estimations, including fixed effect models, two-stage least squares (2SLS), and system GMM, were employed to ensure the robustness of the results and to address issues of heteroscedasticity, endogeneity, and dynamic effects. The empirical results consistently revealed that ESG uncertainty exerted a significant negative effect on inventory management. Firms facing greater unpredictability in ESG-related requirements experienced disruptions in supply chain coordination, difficulties in demand forecasting, and inefficiencies in inventory turnover. Beyond this, larger firms and those with higher environmental expenditures exhibited weaker inventory efficiency, while debt ratio, cost of capital, and firm performance were positively associated with improved inventory outcomes. For corporate managers, the study highlighted the importance of embedding sustainability considerations into inventory strategies and adopting flexible procurement systems, predictive analytics, and stronger governance mechanisms. The findings underscored the broader societal need for clarity and stability in ESG regulations. For this, reducing policy unpredictability could enable firms to align sustainability commitments with operational efficiency, thereby improving competitiveness while minimizing waste and resource misallocation. This study was among the first to empirically establish the link between ESG uncertainty and inventory management, bridging the gap between sustainability research and operational efficiency.

This study aims to analyze the company's financial performance by looking at it from the perspective of liquidity, solvency, and profitability. To achieve this goal, this study utilizes secondary company data with quantitative and comparative descriptive research approaches. The research analysis focuses on current ratio, quick ratio, debt-to-asset ratio, debt-to-equity ratio, return on assets, and return on equity. The researchers compared trend analysis by comparing available data based on time changes. The results of the study show that in terms of liquidity, the company's financial condition is less convincing because current assets are under one time, while the quick ratio is even lower. The company also faces solvency problems, which is indicated by a debt ratio that is too high, especially in terms of the debt-to-equity ratio which has reached 346%. The company's profitability is not convincing because ROA and ROE have been recorded negative for the last four years from 2020 to 2023. The liquidity ratio has a negative relationship with the debt ratio but creates a positive correlation with the profitability ratio. The debt ratio always has an indirect relationship with other ratios

This study aims to analyze the financial performance of PT Jaya Agra Wattie Tbk during the 2019-2023 period through cash flow analysis. The approach used is descriptive quantitative, with sample data consisting of balance sheets, income statements, and cash flow statements covering operational, investment, and financing cash flows. Data were collected using documentation methods and analyzed using eight cash flow ratios divided into three categories: (1) Operating Cash Flow, which includes the Operating Cash Flow Ratio (AKO), Cash Flow Coverage (CAD), Cash to Interest Ratio (CKB), and Cash to Current Liabilities Ratio (CKHL); (2) Investment Cash Flow, which includes the Capital Expenditure Ratio (PM); and (3) Financing Cash Flow, which includes the Total Debt Ratio (TH), Cash Flow Adequacy Ratio (KAK), and Free Cash Flow Ratio (AKBB). The results show that the company’s financial performance is very concerning, with all ratios showing negative values or being below the ideal threshold. The company struggles to generate enough cash to meet current obligations, interest expenses, and capital expenditures. Additionally, the company faces difficulties in meeting interest, tax obligations, and total debt. In conclusion, PT Jaya Agra Wattie Tbk faces significant liquidity and solvency risks.