External Liabilities Research Articles

Exploring Cyber Insurance: A Strategic Shield against Modern Threats

In today’s digitally transformed global business ecosystem, organizations face unprecedented cybersecurity challenges that threaten their financial stability and reputation. As technological vulnerabilities grow increasingly complex and pervasive, cyber insurance has become a critical tool for risk mitigation. It provides comprehensive financial protection and robust support against the evolving landscape of digital threats. This research paper examines the multifaceted dimensions of cyber insurance by synthesizing theoretical insights and practical considerations. It explores the complex ecosystem of cyber insurance, focusing on its two primary coverage types: first-party protection, which addresses direct organizational losses, and third-party coverage, which manages external liabilities. Through a systematic analysis, the study delves into the fundamental components of cyber insurance, the intricate dynamics of the market, rigorous assessment methodologies, and its strategic importance within modern organizational risk management frameworks. The paper concludes by highlighting the potential of cyber insurance to do more than merely protect organizations. It argues that cyber insurance can actively support sustainable digital transformation, making it a crucial enabler of organizational resilience in an era of persistent and evolving technological challenges

External Indebtedness and Economic Growth in the Maghreb Countries

Abstract The objective of this article is to study the nature of the relationship between external indebtedness and economic activity. This work will make it possible to know the effect of the external debt on the economic performance in the Maghreb countries (Tunisia, Algeria and Morocco), which will allow the authorities to lay new foundations in the orientation of the external debt. This study sets the general objective of expressing the linear relationship between indebtedness and economic growth in the three Maghreb countries: Tunisia, Algeria and Morocco between 1970 and 2018, i.e. a total of T=49 observations per countries (N=3). So, in sum, our model allows us to affirm that the impact of debt on the growth of the 3 Arab Maghreb countries is positive and not significant. This result means that in this segment, debt has no direct impact on growth.

DEBT SECURITY OF UKRAINE

DEBT SECURITY OF UKRAINE

The New Normalcy and the Pandemic Threat: A Real Option Approach

This paper delves into the evolving post-pandemic business arena, focusing on how liability options and social norms are reshaping industry structures. We anticipate lasting transformations due to the emergence of new safety standards that bridge the gap between corporate interests and societal welfare. To foster these changes, effective post-lockdown economic policies could encompass not only rigorous social standards but also specific financial incentives. Examples of such incentives include tax relief for businesses implementing comprehensive health protocols and subsidies for those transitioning to remote work or modifying production layouts to minimize infection risks. Our analysis delineates two predominant operational frameworks for firms in this new environment: the liability and property regimes. These are determined by each firm’s financial outcomes and the extent of damages incurred, all measured against societal expectations. Firms within the liability regime may exhibit only partial compliance, often attributed to ambiguous standards and prevailing uncertainties, potentially leading to a dip in profits. In contrast, entities operating under the property regime are likely to engage in more extensive organizational restructuring. A key insight from our study is the paradigm shift in investment behavior, increasingly influenced by risk management, particularly in the strategic choice between liability and property rules. This shift is evident in how firms now prioritize managing potential external liabilities, such as environmental hazards or evolving regulatory landscapes, in their investment decisions. Consequently, the traditional growth-centric investment paradigm is being supplemented by strategies that emphasize safeguarding against various external risks, marking a significant realignment in corporate investment philosophies post-pandemic. This transition underscores the intricate interplay between economic policies, corporate strategies, and societal dynamics in the contemporary business milieu.

A virtuous debtor: South Korea in the Eurocurrency market, 1969 – 1984

This article examines the case of South Korea, in which the external private debt management leveraged the symbiosis of the authoritarian regime and the neoliberal policies in a less-developed country. In the pursuit of post-war growthamship, against the meddling of allies with official loans, the military government turned to the Eurocurrency market, an offshore market for major currencies to meet the triple goal of diversifying foreign reserve sources, financing the heavy-chemical industrialization, and underpinning the diplomatic struggle against North Korea. The dependence on the Euro-capital empowered technocrats at the Economic Planning Board to manage the sovereign borrower’s external indebtedness. Against the neo-mercantilist policy, they introduced price stability measures and maintained low debt-service-ratio so as to appease international banks and international financial organizations. Their success enabled the military government to eschew the debt crisis of 1982 and bolstered the legitimacy of the military government. In return, the technocrats resorted to the authoritarian rule to implement market-oriented policies against the labor the neo-mercantilist interests. Drawing on multi-archival sources, this article engages to the burgeoning scholarship on the relations between international banks and authoritarian regimes by analyzing the external debt-driven neoliberal turn in the developing world.

Persistent external deficits and balance of payments crises

Persistent external deficits are a recurrent phenomena in low and middle income countries. We define a new empirical measure to study balance of payment crises related to the accumulation of persistent external deficits. Using a non-parametric difference-in-differences estimator we estimate a critical value for the accumulated current account deficits associated with a crisis. Countries that have increased their net external indebtedness by an accumulated amount of at least 26%–31% of the GDP in a time span of 3 to 5 years are more vulnerable to suffer a crisis, which includes a consumption fall of 3.1% and a current account reversal of 4.9 percentage points of GDP. These crises are far more severe than an average sudden stop. Thus, our empirical results suggest that fast accumulation of external debt though current account deficits is related to severe crises.

Financial openness and fintech credit

This study explores the link between fintech credit and de facto measures of financial openness, which has been largely overlooked in the existing literature. We utilise a new and comprehensive panel dataset consisting of a direct measure of fintech credit, allowing us to conduct a cross-country analysis of more than 78 countries between 2013 and 2019. Using a series of panel data estimation models, we provide robust evidence that an increase in all main components of total external liabilities leads to an increase in fintech credit volumes. Based on the empirical results, we highlight that each external liability component affects fintech credit volumes through certain channels and mechanisms.

Inequality and the structure of countries’ external liabilities

In this paper, we present empirical evidence that higher income inequality is associated with a greater equity share in countries’ external liabilities, and we develop a theoretical model that can explain this observation: In a small open economy with traded and non-traded goods, entry barriers depress entrepreneurial activity in non-traded industries and raise income inequality. The small number of domestic non-traded goods firms leaves room for foreign firms to operate on the domestic market, and it reduces external borrowing. The model thus suggests that barriers to entrepreneurial activity raise both inequality and the equity share in foreign liabilities. Our empirical results lend some support to this conjecture.

Three sisters: The interlinkage between sovereign debt, currency, and banking crises

This study analyzes the interlinkage between sovereign debt, currency, and banking crises by applying panel data probit and multivariate probit models to a sample of 21 emerging economies observed monthly between 1985 and 2020. The results establish the simultaneity of the three crises in a given month, where banking, sovereign debt, and currency crises tend to occur jointly caused by common unobservable factors. The results also indicate that banking crises usually precede sovereign defaults, but not vice versa. Indirect effects suggest that short-term external indebtedness during banking crises, and misaligned exchange rates corrected by currency crises increase the future sovereign default likelihood.

Prospects and obstacles to the restructuring of Ukraine’s external state obligations in the conditions of war

The article analyzes the structure of Ukraine’s external debt liabilities for the period from 2011 to 2021 and in the period since the beginning of the full-scale invasion. It is determined that the amount of state external liabilities, taking into account projected data, may exceed 70% of this country’s GDP, which will become the dominant form of both attracting financial resources to the state budget and threatening the state security. The authors provide an assessment of the difficulties of restructuring the external debt in terms of the specific weight of the creditor and the weight of short-term payments for the period 2022-2023. It is concluded that at the beginning of 2022, the largest specific weight in the structure of external liabilities was the debt for issued securities for foreign markets and liabilities to international financial organizations and the EU. The main payments for them fall on the third quarters of 2022 and 2023 (3.0 and 3.6 billion USD, respectively), and the payment of interest accounts for 30% of total. The article considers possible mechanisms of write-off and restructuring of the state's external debts, taking into account international experience and with regard to the crises and military conflicts. The following mechanisms for write-off and restructuring of foreign debt are analyzed: Brady Plan for debt restructuring of developing countries; and debt relief programs for the poorest countries - HIPC (heavily indebted poor countries) and MDRI (The Multilateral Debt Relief Initiative). The authors identify the guidelines of work on minimizing Ukraine's external liabilities in 2022-2023. A conclusion is made regarding the initiation of negotiations on the restructuring and write-off of the external debt burden to ease the payments on external debts, including GDP warrants. Such a task should be carried out as soon as possible before the period of the largest payments and taking into account the existing support of the governments of leading foreign countries.

Why does currency denomination in external liabilities of small island developing states matter? Evidence from Fiji

AbstractThe valuation effects on international investment position induced by the exchange rate volatility are not uniform or easily manageable in small and vulnerable economies when compared with larger developing or developed countries. To investigate the underlying dynamics, we developed a foreign currency exposure index over the period 2006–2019. The positive reading of the index suggests that though Fiji has a high net negative international investment position (90% of its GDP), it does not pose any serious risk. To ascertain determinants of Fijiʼs exposure index, we applied fully modified ordinary least square and autoregressive distributed lag bounds test. We have compared both estimates for consistency. Our findings suggest that the underlying determinants of Fijiʼs currency exposure are foreign debt, trade openness and exchange rate. This article bridges the gap in the literature on currency exposure risks in small island developing states and is the first study of its kind for the Pacific region.

Are all cats grey in the dark? calling for a new taxonomy of internationalizing SMEs

Although internationalizing small and medium enterprises (SMEs) have been extensively examined, the literature has mainly classified them based on size than on other factors disclosing different international dynamics, their diverse performance records, relevant strategies and support needs/expectations. This study examines internal and external barriers and key success factors of internationalizing companies, using data from 38 in-depth interviews of Australian SMEs conducted between 2016 and 2018. These cases were then categorized, using an inductive approach and text analysis software, along two dimensions of international experience and exposure, and product and/or service uniqueness and innovation. Moreover, internal and external liabilities and assets were diagnosed for each category. The resulting taxonomy, consisting of ‘prominent’, ‘performing’, ‘promising’, and ‘precluded’ sub-groups of SMEs, provides a useful categorization of exporting SMEs elucidating their differentiated needs and priorities. This research highlights that the current ‘catch-all’ category used in research and practice for internationalizing SMEs is not consistent and should instead be unpacked.

Inequality and the Structure of Countries’ External Liabilities

Inequality and the Structure of Countries’ External Liabilities

Перспективи та перешкоди реструктуризації зовнішніх державних зобов'язань України в умовах війни

The article analyzes the structure of Ukraine’s external debt liabilities for the period from 2011 to 2021 and in the period since the beginning of the full-scale invasion. It is determined that the amount of state external liabilities, taking into account projected data, may exceed 70% of this country’s GDP, which will become the dominant form of both attracting financial resources to the state budget and threatening the state security. The authors provide an assessment of the difficulties of restructuring the external debt in terms of the specific weight of the creditor and the weight of short-term payments for the period 2022-2023. It is concluded that at the beginning of 2022, the largest specific weight in the structure of external liabilities was the debt for issued securities for foreign markets and liabilities to international financial organizations and the EU. The main payments for them fall on the third quarters of 2022 and 2023 (3.0 and 3.6 billion USD, respectively), and the payment of interest accounts for 30% of total. The article considers possible mechanisms of write-off and restructuring of the state's external debts, taking into account international experience and with regard to the crises and military conflicts. The following mechanisms for write-off and restructuring of foreign debt are analyzed: Brady Plan for debt restructuring of developing countries; and debt relief programs for the poorest countries - HIPC (heavily indebted poor countries) and MDRI (The Multilateral Debt Relief Initiative). The authors identify the guidelines of work on minimizing Ukraine's external liabilities in 2022-2023. A conclusion is made regarding the initiation of negotiations on the restructuring and write-off of the external debt burden to ease the payments on external debts, including GDP warrants. Such a task should be carried out as soon as possible before the period of the largest payments and taking into account the existing support of the governments of leading foreign countries.

The global financial cycle and external debt: effects on growth and distribution in emerging and developing economies

The global financial cycle (GFCy), driven by international monetary conditions and global risk perceptions, is a major driver of capital flows to and out of emerging and developing economies (EDEs), reflected in external indebtedness. This paper analyzes the impact of the GFCy on the economic performance of EDEs borrowing in international markets. Rising external borrowing generates appreciating pressures on the exchange rate and lowers the cost of external borrowing. The overall impact of these reinforcing effects acts over investment, debt servicing and the current account balance. We conduct simulation exercises which show that rising external debt coupled with lax external financial conditions have a detrimental impact on economic activity and creates inflationary pressures through the effect of financial costs and the reaction of nominal wage demands. We show that capital control measures increase the degrees of freedom of monetary authorities.

Design of Second-Hand Car SCF Platform Based on Block Chain Technology

At present, China's used car consumption market is developing rapidly and has a bright future. Against the background of this era, the bank's used car credit business ushered in a major development opportunity. How to effectively carry out the used car credit business and provide more effective and high-quality services has become an important research topic. Among the related financing issues, there have always been problems such as difficulty in confirming rights, difficulty in transmitting information, and lack of credit enhancement measures. Therefore, we designed a financial product, hoping to give full play to the advantages of core enterprises in the supply chain, collaboratively apply new technologies such as Block chain technology, "Internet Plus", and big data, innovate financial products, and support and serve entity enterprises to revitalize accounts receivable, speed up the capital turnover of enterprises, reduce external liabilities, and reduce financing costs.

External indebtedness in Sub-Saharan Africa: a spatial econometric perspective

The dilemma around external debt accumulation and the increasing burden of debt servicing in sub-Saharan Africa (SSA) remains a repetitive topic in the development debates. The aim of this study is to investigate the determinants of external indebtedness for SSA countries over the period 2002–2020 while accounting for spatial effects. It departs from the classical literature which uses external debt to Gross Domestic Product ratio as a measure of external indebtedness and formulates another measure, referred to as the Indebtedness Index, which is calculated by making use of the Stochastic Frontier Analysis technique. It accounts for the impact of spatial interactions in external debt accumulation behaviour, by applying the Spatial Durbin Model. The findings of the study show evidence of spatial interactions in external indebtedness among SSA nations. The results also show the reduction capacity of higher exports, political stability and government effectiveness on external indebtedness, while higher share of broad money to GDP exacerbates external indebtedness.

Several Legal Peculiarities of the Regulation of Business Environment in Germany

Business law includes contractual, labor, corporate, tax and other relations. However, the purpose of the study is to highlight and analyze only few interesting issues since it is physically impossible to cover all its aspects within the framework of one article. First of all, it is necessary to determine the legal basis for doing business in Germany and then – the features of starting and doing business. Therefore, this paper serves as a concise methodological guide to the regulation of the business environment in Germany. In this sense, the study examines the legal forms of doing business recognized in Germany, the legal possibilities for establishing various contractual or labor relations with contractors, as well as the grounds for corporate or private liability in case of violation of the rules. Model of corporate governance, external liability and internal corporate governance issues are of particular interest in Germany. The study confirms that the basis for regulation of various aspects of doing business in Germany is specific. The principle of direct corporate liability to creditors is common in Germany but the principle of piercing the corporate veil is allowed if the relevant prerequisites are present. However, business contracts in Germany are based on a narrow approach of contract terms regulation compared to the United States. Hearing of cases by specialized judges in Germany ensures a better and fairer judicial system in labor disputes.

Growth led by government expenditure and exports: Public and external debt stability in a supermultiplier model

The Sraffian supermultiplier model revealed the role of autonomous demand in economic growth. Nevertheless, the sustainability of growth requires the stability of the financial stocks behind autonomous demand. Growth led by government expenditure and exports is thus stable if both public and external debts are stable. In this paper, we assess the stability of this growth process in a supermultiplier model. The external constraint may appear as a restriction to external indebtedness, imposing an upper limit to growth. Nonetheless, the domestic autonomous expenditure can keep the economy distant from the external constraint. A fiscal policy rule is proposed to contain foreign indebtedness. Simulations support the analytical results, and compare the outcomes of the fiscal policy rule and a structural change policy. Altogether, the model provides stability conditions for growth in an open economy paying its international liabilities in foreign currency.

The Impact of Portuguese Economic and Financial Assistance Program on the Employability of the Azorean Nurse after the Financial Crisis of 2009-2010

The economic crisis that followed the financial crisis that began in the United States of America in 2008 quickly spread to the whole world, leaving structural problems in several countries unveiled, particularly in those that, due to successive deficits and high external indebtedness, were in a more fragile situation. In the Portuguese case, external assistance was needed, made available in exchange for structural reforms and the abrupt, and severe reduction in public expenditure. The applied austerity had repercussions throughout society, but the public sector felt the weight of the used measures concretely, with health services being no exception. The shock waves caused by public expenditure containment policies were particularly felt in the Azores, an ultra peripheral region marked by geographical discontinuity. These are significant asymmetries at various levels from island to island and across several sectors. The public sector is the primary employer. This paper focuses on understanding if the Portuguese Economic and Financial Assistance Program, implemented between 2011 and 2014, affected the employability and dynamics of the labour market of new graduate nurses in the Autonomous Region of the Azores. This quantitative study used descriptive, inferential, and correlation statistics to establish relations with a statistical value between the sample's employability dimensions and the Portuguese Economic and Financial Assistance Program. From the analysis carried out, the study revealed that the restrictions imposed due to the external assistance program led to an increase in precariousness among new graduate nurses and, among other conclusions, a strong contraction in the capacity of hiring nurses by the public health services. As a limitation to the study, there is the need to emphasise that data on unemployment reflected the reality when the questionnaire was applied (May 2019), and the fact that the study did not explore the reasons underlying the unemployment rate found among the participants (although residual).