Debt Research Articles

ANALSIS KOMPARASI KINERJA KEUANGAN BANK MEGA SYARIAH MENGGUNAKAN METODE RGEC PADA MASA SEBELUM DAN SELAMA PANDEMI COVID-19

The COVID-19 pandemic has had an impact on all industrial sectors in Indonesia, one of which is the sharia banking sector. During the pandemic, banking performance experienced fluctuations in terms of deposits and debt financing; Bank Mega Syariah also experienced fluctuations in financial ratios and deposits, which could have an impact on the bank's financial performance. The purpose of this study is to evaluate Bank Mega Syariah's financial results utilizing the RGEC approach both before and after the COVID-19 epidemic. This study used quantitative research using a descriptive methodology. Data was acquired through the use of documentation methods. Financial ratio analysis utilizing the RGEC method is the data analysis method employed. The findings demonstrate that Bank Mega Syariah's financial performance, as measured by the RGEC technique, was superior to its pre-COVID-19 pandemic financial performance during the pandemic-affected period. This is shown by Bank Mega Syariah's ability to continue turning in a profit despite the COVID-19 pandemic's negative impact on the business environment. This accomplishment is demonstrated by the growth in several key business metrics, which were maintained, including bank profitability, finance distribution, and Third Party Funds.Keywords: Financial Performance; Bank Health Level; RGEC Method

Household Financial Fragility, Debt and Income in a Dynamic Model

AbstractWe develop a novel dynamic model for household debt and household income change studying the interaction between financial fragility and financial literacy. We compare the results to the U.S. data under several parameterizations. Households react pro-cyclically to income shocks and are better able to represent aggregate data when financial literacy is low.

Pengaruh Kinerja Keuangan, Asimetri Informasi, dan Manajemen Laba terhadap Harga Saham Perusahaan Perbankan yang Terdaftar di BEI Tahun 2020-2022

This study aims to analyze the effect of financial performance proxy Debt to Equity Ratio, information asymmetry, and earnings management on stock prices in banking sector companies listed on the Indonesia Stock Exchange for the period 2020-2022. The method used in this study is an explanatory method with a quantitative approach. While for the sampling technique itself using purposive sampling with a selected sample of 34 companies. For research analysis, namely using descriptive statistical analysis, classical assumption tests, multiple linear regression analysis, and hypothesis testing. From the results of the study, it can be concluded that financial performance with the Debt to Equity Ratio proxy does not have a significant partial effect on stock prices, information asymmetry has a negative and significant partial effect on stock prices, earnings management does not have a significant partial effect on stock prices, and financial performance, information asymmetry, and earnings management do not significantly affect stock prices simultaneously.

Belief disagreement and debt maturity structure

This paper examines how investors’ belief disagreement affects the firm’s debt maturity choice. We find that in the presence of belief disagreement, the firm prefers short-term debt to long-term debt. This is because short-term debt is less risky and can attract more optimistic investors, which raises the debt price and reduces the cost of debt financing. Our result is stronger when long-term debt is more risky compared to short-term debt and investors’ belief dispersion is higher.

Drifting further apart? Europe's trends of urban-rural political polarisation should not be overstated

Urban-rural polarisation in political attitudes is widely argued to have become a distinctive feature of many Western democracies. Yet, have urban-rural gaps grown over time, as is often suggested? And, if so, do trends in this regard differ across countries? We address these questions leveraging individual-level data from over 300,000 respondents from the European Social Survey over the period 2002-2020 in 25 countries. Overall, we do find evidence of moderate divergence in outlooks between more urban and more rural publics, examining in particular trust towards the EU and views on migration. We also find that there is divergence in terms of feelings of trust in relation to the political system and levels of satisfaction with democracy since the early 2010s, most likely because of the financial and sovereign debt crises. But these gaps have significantly reduced more recently. Furthermore, trends are heterogenous across countries. Overall, this paper demonstrates that value polarisation along the urban density divide should not be over emphasised as divergence between urban and rural Europe is more moderate than in the US, and very issue-based and country-specific.

Does digital finance development affect corporate cash holdings? Evidence from China

ABSTRACT This paper examines how the level of development of digital finance affects corporate cash holdings. By utilising the Digital Finance Inclusive Finance Index compiled by the Internet Finance Research Center of Peking University and data from China's listed companies, this paper finds that the development level of digital finance where a company is located is negatively correlated with corporate cash holdings. Furthermore, the negative effect of digital finance is more pronounced for non-state-owned enterprises and companies in the early stages of their life cycles. Additional tests show that digital finance can reduce a corporation's financial constraints and debt costs, and the coverage breadth and usage depth of digital finance have also significantly reduced the level of cash holdings for enterprises. Our findings provide insights for understanding the role of digital finance in firm behaviour in emerging economies.

Strategic Alliances and Lending Relationships

ABSTRACT We study how proprietary information flows in strategic alliances facilitate banks’ information collection in private debt markets. We argue that lenders that have previously worked with a borrower’s alliance partners have an information advantage and show that firms entering a strategic alliance receive a lower interest spread on loans from banks that have previously lent to their strategic partners than loans from other banks. Cross-sectional tests on alliances’ economic importance and participants’ information environment support our hypothesis that the loan price effect is driven by reduced information asymmetry between borrowers and their partners’ relationship banks. Last, we find borrowers are more likely to obtain debt financing from alliance-related banks than from other banks. Overall, our findings are consistent with lenders that have previously worked with an alliance counterparty possessing debt contracting-relevant information about the soft nature of alliance value and the partners’ commitment to alliances. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G10; G21; G32.

Climate risks and corporate tax shields

ABSTRACT This study investigates the influence of climate risks on the tax shields of US-based firms. The findings show a significant negative correlation between climate risks and debt-related tax shields (DTS), indicating reduced reliance on debt financing due to potential financial risks and regulatory uncertainties. Conversely, non-debt tax shields (NDTS) demonstrate a positive relationship with climate risks, highlighting firms’ proactive efforts to seek tax benefits from alternative sources. Additionally, the study uncovers distinct dynamics for high and low-leveraged firms in utilizing tax advantages. The research contributes valuable insights into the intricate interplay of climate risks, tax benefits, and corporate financing decisions.

The Impact of Corporate ESG Performance on the Cost of Debt Financing -- An Empirical Test Based on A-Share Listed Firms

The Impact of Corporate ESG Performance on the Cost of Debt Financing -- An Empirical Test Based on A-Share Listed Firms

The Impact of the Development of Digital Finance on the Risk of Corporate Debt Financing

The Impact of the Development of Digital Finance on the Risk of Corporate Debt Financing

Socioeconomic Correlates of Suicidal Ideation in Military Veterans: Examining the Interaction Between Homelessness and Financial Debt.

Studies in veterans have yet to examine interconnections between homelessness, financial debt, and suicidal ideation. We analyzed data from a nationally-representative study conducted in 2021 of low-income U.S. veterans (N = 1,004). Analyses revealed veterans who were younger, male, had a history of criminal arrests, met criteria for posttraumatic stress disorder (PTSD), reported greater loneliness, or had both a history of homelessness and higher debt were more likely to endorse suicidal ideation. We found an interaction between a history of homelessness and current debt: 40% of veterans with both past homelessness and higher debt reported suicidal ideation, whereas only 10% of veterans with either past homelessness or higher debt reported suicidal ideation. As past homelessness and current debt interacted to increase the odds of suicidal ideation in a national sample of veterans, these results inform policy and clinical decision-making for suicide prevention and in programs serving veterans experiencing homelessness.

Road to Prosperity: Driving U.S. Economic Growth and National Debt Reduction by Leveraging Technological Innovation

Road to Prosperity: Driving U.S. Economic Growth and National Debt Reduction by Leveraging Technological Innovation

Climate change exposure, financial development, and the cost of debt: Evidence from EU countries

Utilising climate-related narratives in conference call transcripts to measure firm-level exposure to climate risks, we examine the association between such exposure and the corporate cost of debt financing. Using a sample of 21 European countries from 2001 to 2020, we find that firms exposed to greater climate change experience higher debt costs. The impact is even more extreme when using climate-related opportunity and regulatory exposure measures. We further find critical economic channels through which the higher debt costs occur: financial development and credit supplies. Specifically, our findings hold only for firms in weakly developed financial markets and institutions as measured by the new broad-based multi-dimensional financial development indices. We also find some other conditioning factors. Firstly, the higher the carbon intensity level, the greater the debt cost a firm with more climate change exposure must pay. Secondly, debtholders appear to punish firms with high environmental and social disclosure that are exposed to more climate change. Thirdly, the findings are more pronounced in financially constrained firms.

Disparate Patient Advocacy When Facing Unaffordable and Problematic Medical Bills

People in the US face high out-of-pocket medical expenses, yielding financial strain and debt. To understand how households respond to medical bills they disagree with or cannot afford. A retrospective cohort study was carried out using a survey fielded between August 14 and October 14, 2023. The study included a random sample of adult (aged ≥18 years) survey respondents from the Understanding America Study (UAS). Participant responses were weighted to be nationally representative. The analysis took place from November 3, 2023, through January 8, 2024. Respondents reported if their household received a medical bill that they could not afford or did not agree with in the prior 12 months, and if anyone contacted the billing office regarding their concerns. Those who did reach out were asked about their experience and those who did not were asked why. The survey was sent to 1233 UAS panelists, of which 1135 completed the survey, a 92.1% cooperation rate. Overall, 1 in 5 of the 1135 respondents received a medical bill that they disagreed with or could not afford. Leading bill sources were physician offices (66 [34.6%]), emergency room or urgent care (22 [19.9%]), and hospitals (31 [15.3%]), and 136 respondents (61.5%) contacted the billing office to address their concern. A more extroverted and less agreeable personality increased likelihood of reaching out. Respondents without a college degree, lower financial literacy, and the uninsured were less likely to contact a billing office. Among those who did not reach out, 55 (86.1%) reported that they did not think it would make a difference. Of those who reached out, 37 (25.7%) achieved bill corrections, better understanding (16 [18.2%]), payment plans (18 [15.5%]), price drop (17 [15.2%]), financial assistance (10 [8.1%]), and/or bill cancellation (6 [7.3%]), while 32 (21.8%) said that the issue was unresolved and 23.8% reported no change. These outcomes aligned well with respondents' billing concerns with financial relief for 75.8% of respondents reaching out about an unaffordable bill, bill corrections for 73.7% of those who thought there was mistake, and a price drop for 61.8% of those who negotiated. This cross-sectional survey of a representative sample of patients in the US found that most respondents who self-advocated achieved bill corrections and payment relief. Differences in self-advocacy may be exacerbating socioeconomic inequalities in medical debt burden, as those with less education, lower financial literacy, and the uninsured were less likely to self-advocate. Policies that streamline the administrative burden or shift it from patients to the billing clinician may counter these disparities.

A theory of net capital flows over the global financial cycle

We develop a theory to account for the relationship between global asset price changes and net capital flows. We show empirically that countries that have a net debt of safe assets experience a rise in net outflows of safe assets (i.e. pay off safe asset debt) when global asset prices fall. This is accomplished through a rise in total net outflows (an increase in net savings) and a drop in net outflows of risky assets (the net sale of foreign risky assets). We develop a multi-country portfolio choice model that can account for these facts. The theory relies on cross-country heterogeneity in the share of an investor’s portfolio invested in risky assets. A global drop in risky asset prices changes relative wealth across countries due to this heterogeneity, which leads to changes in net flows of safe and risky assets. The model is applied to 20 advanced countries and calibrated to reflect observed cross country heterogeneity of net foreign asset positions of safe and risky assets. The implications of the calibrated model for net capital flows are quantitatively consistent with the data.

Exploring the complications of climate change funding in Sub-Saharan African countries

Globally, climate change funding has become a focal point and debate among international organisations, private agencies, governments, and civil societies mainly because of its significant threats to social, economic, and the environment and the significant funds needed to adapt and mitigate its impacts. While substantial amounts of funds have been secured and distributed to governments, private organisations and institutions in the continent to mitigate and cope with the threats of climate variabilities, the outcomes have failed to meet the desired outcomes due to limited access to funding, lack of transparency in allocations and the failure of the funds to reach local communities where the impacts are significantly felt. Using a conventional approach of data collection tools predominantly of quantitative and qualitative methods and extensive literature materials, this paper explored the complexities and constraints of sourcing climate change funding and the mechanisms of distribution funds across the continent. The findings unearthed that climate funding lacks transparency and equitable distribution; furthermore, there are substantial bureaucratic processes, capacity constraints and immense conflicting priorities among countries on the continent. Our findings uncovered that addressing these anomalies will require innovative funding structures that catalyse technical assistance programmes to support the creation of new avenues for climate finance as well as reforming global financial institutions, emphasising debt reductions, freeing up additional funding for climate change mitigation and adaptation, and channelling private finance to both climate and sustainable development, particularly in the more vulnerable countries.

PENGARUH KESULITAN KEUANGAN, KEGAGALAN HUTANG DAN MASA AUDIT TERHADAP OPINI AUDIT GOING CONCERN ( Studi Empiris Pada Perusahaan Yang Terdaftar Di Bursa Efek Indonesia Tahun 2021-2022 )

This research aims to find out and test how financial difficulties, debt failure and audit period influence going concern audit opinions on companies listed on the Indonesia Stock Exchange in 2021-2022. The population in this study amounted to 778 companies. The number of samples in this study was 53 samples. This research method uses quantitative methods. The data analysis method used in this research is logistic regression analysis as a data processing test tool. The results of the research analysis show that financial difficulties have an effect on going concern audit opinion, while debt failure and audit period have no effect on going concern audit opinion

Entrepreneur Characteristics, Human Capital Diversity and Access to Debt Financing Among SMEs: Moderating Effect of Academic Qualification and Social Networks

The purpose of the study was to investigate entrepreneur characteristics and human capital diversity as determinants of debt financing among micro, small, and medium enterprises. Additionally, the moderating effect of academic qualification and social networks is ascertained. Drawing on a diverse sample from various micro, small and medium enterprises in Ghana, the research employs a cross-sectional quantitative survey design. The findings reveal significant positive relationships between entrepreneurial characteristics, human capital diversity, and access to debt financing. Additionally, academic qualifications demonstrate an interactive effect, enhancing the joint impact of entrepreneurial characteristics and human capital diversity on financial access. Social networks emerge as influential moderators, accentuating the importance of external relationships in shaping access to debt financing for entrepreneurs. The study contributes to a nuanced understanding of the factors influencing SMEs' financial outcomes and offers actionable insights for entrepreneurs, policymakers, and financial institutions.

Unveiling the African growth puzzle: relationship between financial inclusion, debt sustainability and economic growth

Unveiling the African growth puzzle: relationship between financial inclusion, debt sustainability and economic growth

How does ESG performance determine the level of specific financing in capital structure? New insights from China

Sustainable finance has gained attention as investors emphasize environmental, social, and governance (ESG) factors in investment decisions. Understanding ESG's impact on corporate financing is crucial for stakeholders. However, evidence on ESG and capital structure, especially in Chinese enterprises, is limited. This study investigates the link between ESG performance and capital structure in Chinese firms, focusing on debt and equity financing. Using panel data from 2010 to 2022 and the system GMM model, the study controls for firm-specific factors. Results show environmental and governance scores negatively relate to debt financing and positively to equity financing. Social scores show no significant impact on debt but a positive one on equity financing. All ESG indicators positively relate to the debt-to-equity ratio, highlighting sustainability's role in capital structure decisions. These findings guide policymakers in incentivizing sustainable practices and help corporate leaders align financing strategies with sustainability goals, supporting long-term growth and stakeholder value.