Financial Conditions Research Articles

Macro-financial linkage, endogenous risk premium and monetary policy: evidence from a semi-structural model estimated for Morocco

PurposeThis paper seeks to investigate the amplitude of macro-financial linkage for an emerging country like Morocco.Design/methodology/approachFor this purpose, it presents a semi-structural new-Keynesian model. In the blocks of the former, a risk premium is charged on the lending rate in addition to the policy rate. To identify the macro-financial linkage, the risk premium is considered endogenous. It is represented as a function of the borrower’s probability of default, which is, in turn, a function of the GDP gap. To identify this two-wave relationship, we estimate an ARDL model between 2009Q1 and 2020Q1. Therefore, we integrate the estimation results into the new-Keynesian semi-structural model.FindingsThe results reveal a significant impact of the financial condition on the path of the business cycle. In fact, demand shocks and nonperforming loan shocks (NPLs) are exacerbated by the presence of macro-financial linkage. Under this condition, the amplitude and persistence of the shocks are amplified and extended.Originality/valueThis paper extends the literature on the interconnection between the real and financial economies by considering the endogeneity of the credit risk premium and modeling its dynamics.

Identifying policy determinants of bank default risk during the COVID-19 pandemic: empirical evidence from the U.S. and Canada

ABSTRACT This study examines the policy determinants of bank default risk, proxied by credit default swap (CDS) spreads, using quarterly data from the U.S. and Canada for the period 2020 to 2022. The analysis considers four determinant groups: the COVID-19 pandemic shock, aggressive monetary and fiscal policy responses, macroprudential-related bank financial fundamentals, and macroeconomic and market conditions. Utilizing General Least Squares (GLS) and dynamic panel models with system General Method of Moments (GMM), the findings reveal that rising COVID-19 deaths significantly widen CDS spreads. Expansionary monetary policies reduce bank default risk, though the effectiveness under conventional monetary policy is reduced by increasing COVID-19 deaths. In contrast, expansionary fiscal policies and inflation broaden CDS spreads. The combined analysis highlights policy stances as dominant factors, with macroprudential-related fundamentals having minimal impact. The findings are robust using both 5-year and 10-year CDS measures. This study has significant policy implications during health and economic crises. For financial stability, policymakers should prioritize reducing pandemic-related deaths, utilize expansionary monetary policies with health support strategies, balance fiscal support to avoid excessive government spending, and implement measures to control inflation. It is essential to enhance coordination between healthcare, fiscal, and monetary authorities for effective policy implementation.

Determining Factors of Liquidation of Regional Public Companies: Case Study of Perumda Banongan, Situbondo Regency

The research entitled Determining Determinants of Regional Public Companies Liquidation: Case Study of Perumda Banongan, Situbondo Regency using qualitative methods. Miles and Huberman's interactive analysis model. This research was conducted with the aim of analyzing the determining factors for the liquidation of regional public companies at Perumda Banongan, Situbondo Regency. The data source for this research uses primary and secondary data from the Banongan Regional Public Company, Situbondo Regency. The results of the research show that the determining factor for liquidation lies in unhealthy financial conditions and problems with the Governance of Perumda Banongan. So it can be concluded that the Regional Government as the Capital Holding Authority must immediately improve management governance, human resources, and implementation supervision over the performance of Perumda and Perseroda so that they can run more effectively.

The impact of ESG strategies on growth in the logistics industry

The aim of the article is to analyse the relationship between company growth, measured as an increase in Earnings Per Share (EPS) in 3- and 5-year periods, and companies’ financial condition, measured using the Altman z-Score (AS) model. The study was carried out on the example of companies included in the WIG Index and Warsaw Stock Exchange Index (in Polish: Warszawski Indeks Giełdowy – WIG) Environmental, Social, and Governance (ESG) between 2013 and 2020. Furthermore, among the companies included in the WIG index, companies belonging to the logistics industry were distinguished. An analysis of linear and panel relationships was used to verify the nature of the relationships between the variables taken into account. The z-Altman index was found to have a positive effect on company growth in a 3-year period for companies from the transport and logistics industry and all companies included in the WIG ESG index. Regarding company growth over the longer 5-year period, the influence of the z-Altman index on growth was not observed. Therefore, the results for companies in the WIG index show that for company growth in both the 3- and 5-year periods, the financial and economic condition of a company, measured by the z-Altman index, has no impact on the size of this growth, which was also confirmed by panel models.

Совершенствование методики проведения арбитражным управляющим финансового анализа компании-должника

In accordance with the Rules of financial analysis by the arbitration manager approved by the decree of the government of the Russian Federation of 25 June 2003 No. 367, arbitration managers should use the method of financial coefficients. However, in our view, a number of coefficients included in the Rules do not allow us to give a reasonable conclusion on the financial condition of the legal entity. The article substantiates the reasons for this and proposes other and additional coefficients for conducting financial analysis of debtors organizations

An Examination of Moderna

Understanding the COVID-19 response for Moderna, a biotechnology company based out of the United States, and compiling the current outlooks regarding vaccinations, development of a diversified product line, and garnering a competitive edge in the biotechnology space is a costly endeavor Moderna is attempting to transverse. Declining revenues, rising costs, and low sales of Moderna's current product have deteriorated the value base. The recent increase in share price is motivated by anticipation of a potential avian flu outbreak and response. This study attempts to shed light on the current financial condition of Moderna.

Lease of Life’

This case presents an ethical dilemma faced by the partners of a restaurant chain that prides itself on its stakeholder approach. The partners must decide whether to implement a health insurance policy for their employees despite the unfavourable financial condition of the company. The case explores the challenge of maintaining consistency in actions and values, especially during hard times. It also examines the issue of the rights of employees in this regard and the business case of providing health insurance. The case aims to help students understand the decisions that executive management faces frequently and the trade-offs between profitability and social responsibility.

PROBLEMS AND PROSPECTS OF THE DEVELOPMENT OF BANKING REGULATION AND SUPERVISION IN UKRAINE

Effective banking regulation and supervision are key factors for ensuring the stability of the national banking system of Ukraine. The purpose of this article is to analyze the peculiarities of banking regulation and supervision in Ukraine in order to identify problems and possible ways of development, including in the context of world experience. The article examines the theoretical aspects of the essence of the concepts of banking regulation and banking supervision. The main indicators of the banking system of Ukraine for 2020-2024 and the mechanism for identifying risks in the activities of banking institutions are also considered. The global trends in banking regulation at the current stage are its centralization, the concept of risk-oriented supervision, the introduction of new financial technologies, the development of the principles of proportional banking regulation. The main positive and negative methods of supervision in the banking sector are singled out. It has been proven that the conditions of a full-scale military conflict significantly undermined the development of the banking system of Ukraine. The destruction of infrastructure, loss of customer confidence, risks to the bank's loan portfolio and capitalization have become major problems. In addition, the decrease in liquidity and the growth of inflation risks create serious challenges for the banking system. The degree of suitability of world models in terms of the priority tasks of the state regarding the regulation of the banking sector is analyzed. Directions for improving banking supervision through improvement of banking activity licensing procedures are proposed; introduction of permanent monitoring of the activities of domestic commercial banks, in particular their financial condition; implementation of constant monitoring of compliance with banking regulations and current legislation; introduction of permanent inspections of banking activities; implementation by commercial banks of ongoing internal control and external audit control; developing and sending supervisory instructions for banking institutions regarding the implementation of Basel III standards.

Socio-Economic Aspect of a Person’s Image Representation in the Khakass Proverbial Picture of the World

Purpose. The article describes Khakass proverbs and sayings that represent the socio-economic relations of a person in society. Currently, many issues relating to the description of a person’s image through paremic expressions in the Khakass language have not yet received proper coverage, which determines the relevance of this study.Results. The authors have come to the conclusion that the socio-economic aspect is widely represented in Khakass proverbs and sayings. It is realized in the images of people, relatives, children, friends, enemies, masters, guests, neighbors, as well as men and women. The image of the people affirms the norms and rules of collectivism and peaceful coexistence in society. Children, parents and relatives are the main components of family relationships and always come to the aid of each other. The host is distinguished by his hospitality, and the guest, in turn, does not abuse this. As a rule, neighbors are endowed with such qualities as kindness and responsiveness. Based on the analyzed linguistic material, a man is endowed with a higher proportion of stereotypical characteristics: strength, stamina, strength of character, etc. And a woman appears as a kind, gentle and strong person.Conclusion. Economic relations reflect the ideas about a person’s financial condition, their work activity and the commodity-money sphere. The key to a person’s success in the Khakass society is adherence to the principles of col-lectivism, mutual assistance, tolerance, perseverance, education of the younger generation and caring attitude towards each other.

Mandatory Disclosure of Negative Events and Auditor Behavior: Evidence from a Natural Experiment

Using the staggered adoption of data breach disclosure (DBD) laws, this paper studies the impact of mandatory disclosure of adverse corporate events on audit fees. DBD laws increase the frequency of disclosed cyber incidents, which adversely impacts firms’ financial condition and operations; this could result in a higher risk of misstatement and reputation loss for auditors. Consistent with this hypothesis, we find that auditors charge higher fees after the adoption of DBD laws. We also find that the increase in audit fees is more pronounced in firms with higher cyber risk and greater auditor reputational concerns. Furthermore, governance mechanisms and resources that are available to auditors can mitigate the rise in audit fees. Robustness tests suggest that the effect is not driven by realized cyber incidents and other contemporaneous events. Overall, our study provides evidence that the mandated disclosure regulation significantly affects audit pricing.

НОРМАТИВНО-ПРАВОВЕ ЗАБЕЗПЕЧЕННЯ ОБЛІКУ ТА КОНТРОЛЮ РОЗРАХУНКІВ З ПОСТАЧАЛЬНИКАМИ ТА ПІДРЯДНИКАМИ

Annotation. The organization of accounting for accounts payable at any enterprise is quite important, because it contributes to the reliability, correctness and transparency of the display of data from settlement transactions with suppliers and contractors. The article discusses the peculiarities of accounting for payments with suppliers and contractors. The purpose of the article is to clarify the economic meaning of the terms "supplier", "contractor", "creditor debt" and to reveal their role in the country's economy. It was determined that accounts payable is the organization's debt to other legal entities and individuals, which appears as a result of a time gap between the provision of goods and materials, the receipt of goods and services, the provision of services, the receipt of a preliminary cash advance and the date of their actual payment and fulfillment of obligations to third parties. The current legal acts regulating the accounting of settlements with suppliers and contractors were analyzed; the theoretical aspects of their accounting and analytical support are systematized, as well as the documentation of transactions with these counterparties is displayed. Ways and directions for further improvement of accounts payable management are proposed. It was revealed that with the help of keeping analytical documentation, accounts payable will be improved, namely, control of the timeliness of payments with each supplier or contractor for the delivered values ​​will be improved, and as a result, this will have a positive impact on the company's financial condition. It was identified that the main methods of managing payables are: control over the ratio of payables; assessment of accounts payable; analysis of settlements with creditors, their registration.

Financial Distress Analysis of Companies Carrying Out Mass Layoffs Throughout 2023 using the Altman Z-Score Method, Springate Method, and Zmijewski Method

This research aims to estimate the financial condition of four companies that will carry out mass layoffs throughout 2023 using three financial distress prediction methods, namely the Z-Score Altman method, the Springate method and the Zmijewski method. Secondary data was used sourced from the financial reports of each company from 2022 to 2023. The research results showed that financial performance was analyzed using the Z-Score Altman method, the Springate method and the Zmijewski method in four companies, namely PT Net Visi Media Tbk for the period 2022-2023 classified as having the potential to experience bankruptcy, PT GoTo Gojek Tokopedia Tbk for the 2022-2023 period is classified as having a high potential for bankruptcy, PT Bukalapak.com Tbk for the 2022-2023 period is classified as being in good health, and JD.com, Inc. (JD) for the 2022-2023 period is classified as having absolutely no potential for bankruptcy.

ОСОБЛИВОСТІ ФОРМУВАННЯ СІМЕЙНОГО БЮДЖЕТУ В УМОВАХ ФІНАНСОВО-ЕКОНОМІЧНОЇ НЕСТАБІЛЬНОСТІ

Introduction. In the conditions of financial and economic instability, approaches to the formation and distribution of financial resources of the state, business and households have changed radically. Therefore, the study of the structure and features of forming the family budget is an objective requirement of the time. The purpose of the article.. Study of the essence, analysis of the structure and problems of formation of family budgets of citizens in Ukraine. Results. The authors of the article suggest that the family budget should be considered as a plan for the formation and use of cash income to ensure the well-being and appropriate standard of family living over a certain period of time. The analysis of the income structure of family budgets shows that the largest share is wages 57%, social benefits and transfers – 21%, profit and mixed income – 15%, income from property – 7%. During the studied period, the average monthly pension increased by 86.2%, the stipend by 53%, the minimum pension by 33.4%, the subsistence minimum by 38.33%, but in dollar equivalent it is 23%, 1.8%, -11.8% respectively. Important factors affecting the incomes of Ukrainian citizens are: the level of development of the country’s economy; the size of state social guarantees, the level of labor productivity; unemployment rate; the level of purchasing power of citizens; inflation; the structure of citizens’ expenses. It has been studied that in the conditions of war, the number of Ukrainians living on the edge of poverty has increased by 1.8 million since 2020, one of the indicators indicating a decrease in the level of income is an increase in the share of expenditure on food products in the general budget. According to the structure of family budgets, Ukrainians spend almost 66% on food and mandatory payments, which is twice the world average. During the war, the situation has changed, charity and donations occupy a larger part of family budget expenses compared to education or loan payments. Conclusions. It is suggested that in order to ensure the stability of the financial condition of Ukrainian citizens, it is necessary to develop and implement effective measures for socio-economic support of the population’s standard of living and the creation conditions for the development of small and medium-sized businesses at the state and regional levels.

АНАЛІЗ ЦІНОВИХ СТРАТЕГІЙ ТА СПОЖИВЧА ПОВЕДІНКА В КОНТЕКСТІ МАРКЕТИНГОВИХ ДОСЛІДЖЕНЬ

Abstract introduction. The article examines the views of scientists regarding the formation of price strategies. The main approaches to pricing are considered, with the help of which companies set optimal prices for their services and goods. Factors affecting the company's choice of pricing strategy and affecting consumer behavior are considered. It is conducted research in relation to behavior of consumers and built model of satisfaction of consumer necessities. The purpose of the article. Consideration of pricing strategies of companies and their impact on consumer behavior. Researching consumer behavior and building a model for satisfying consumer needs in goods or services. Methods. Carrying out research the methods of abstraction, analysis, logical, theoretical and historical generalization and comparison are used. For basis of research a dialectical method is taken. Results. The article examines the main approaches to pricing, with the help of which companies set optimal prices for their services and goods. The factors affecting the company's choice of price strategy are considered, and the factors influencing consumer behavior are highlighted. Conducted research on consumer behavior. The proposed model of meeting the needs of consumers in goods or services, which contains 8 sections: the consumer's awareness of the need for the need for a product or service; collection of information; selection of goods or services; decision-making; purchase (payment) of goods or services; evaluation of the choice made and enrichment of experience; the degree of satisfaction of the need for a product or service and consumption of the results. Conclusiоns. After researching and analyzing the available types of marketing price strategies, business entities choose their own price strategy, taking into account certain existing tools, taking into account: characteristics of the service or product, market segment, market competition, competitor analysis, level of market demand, marketing strategies, etc. .. The use of the correct price strategy and the concept of pricing contributes to the achievement of goals: ensuring the stable financial condition of the business entity, meeting the needs of consumers. The offered model in relation to satisfaction of necessities of consumers in commodities or services gives understanding to the process of making decision by consumers in relation to a purchase that is the basic factor of success of company in a competition environment. Companies, that is able to adapt oneself to the necessities of consumers and, to their requirements, that understand the customers, have more chances to retain and attract clients, promote a competitiveness and score a success at the market. The question of the method of determining prices for certain types of services and the behavioral reaction of consumers requires further research.

Levekår, emosjonelle plager, resiliens og foreldrestress – en kartlegging av flyktningfamilier fra Ukraina

The integration program in Norway is mandatory and offered by all municipalities to newly arrived refugees. The program offers education-oriented activities on Norwegian society, including mandatory parent programs. In 2023, a decision was made to allow municipalities to shorten this element for families from Ukraine, due to capacity constraints. To make informed adjustments, the municipalities need more information about the needs of parents from Ukraine. This article aims to provide knowledge that can help decision-makers plan and implement further adaptations of social and health services. The participants were families with children aged 6-12 from seven municipalities. They answered an electronic questionnaire that included questions on the Hopkins Symptom Checklist (short version), the Resilience Scale for Adolescents, and the Parenting Stress Index (short version). Our study reveals that refugees from Ukraine are a vulnerable group with significantly low economic living conditions, and 26 % of the sample reported symptoms of anxiety and depression. Despite this, parents demonstrated resilience through their social resources, family cohesion, and low levels of parental stress. However, it is important to note that mental health issues and increased parental stress may emerge after a certain period following flight and settlement in Norway, and poor financial conditions can exacerbate these concerns. Keywords: parent programs, refugees, Ukraine, low economic conditions

Does climate policy uncertainty impair or improve corporate investment efficiency?

Climate policy uncertainty (CPU) has been a topical issue given its widespread impacts, but its effect on corporate investment efficiency is arguable. Based on a sample of Chinese listed firms, we find that higher CPU results in lower investment levels while higher investment sensitivity to investment opportunities. This suggests that CPU improves investment efficiency by pushing firms to reduce investment expenditures and align their investment decisions more in line with investment opportunities. We name this finding as the pushback effect of CPU and find that it is more pronounced for firms with overinvestment or tight financial conditions.

Deconstruction of Early Marriage: A Critical Study of Imam Shafi'i's Views and Implications on Community Welfare

Early marriage is still a crucial issue in various countries, including Indonesia. Imam Shafi'i's views on early marriage need to be examined critically in a modern context. This article aims to deconstruct Imam Shafi'i's views on early marriage and analyze its implications on the welfare of society. A qualitative approach is used with the method of literature study. Data were collected from books of jurisprudence and other secondary sources. Imam Shafi'i's view of early marriage has several dimensions, including the minimum age of marriage, the legal requirements of marriage, and the consequences of early marriage. This view has complex implications for people's well-being, both positive and negative. The purpose of this article is to critically discuss Imam Shafi'i's views on early marriage and identify its implications on the welfare of society. In doing this, we will conduct a literature study that involves an analysis of the books of jurisprudence and other secondary sources. Thus, this article will provide a deeper understanding of Imam Shafi'i's views and their impact on society as a whole. A qualitative approach was used in this study with the method of literature study. Through this method, data were collected from various books of jurisprudence relating to Imam Shafi'i's views on early marriage. In addition, other relevant secondary sources are also used to enrich the data collected. By combining these two data sources, this study has a solid basis in analyzing Imam Shafi'i's views and their implications on people's welfare. Imam Shafi'i has a complex view of early marriage. In the modern context, this view needs to be critically deconstructed to understand its implications for the well-being of society. One important factor to consider is age. Imam Shafi'i sets a minimum age of marriage that must be met before a person can marry. In addition, maturity must also be considered. One must have sufficient physical, mental, and emotional maturity before deciding to get married. In addition, socioeconomic conditions are also important to consider. Financial conditions and economic stability greatly affect the welfare of married couples. Therefore, in making marriage decisions, it is important for individuals and society to consider these various factors carefully.

Methodical aspects of analysis and risk management of an insurance company

The object of research is the risks of the insurance company. The paper is devoted to the study of the risks of the insurance company, which generate threats to the level of its solvency. The general state of economic development in general and the insurance market in particular determine the operating conditions of any insurer. The insurance company's ability to regulate such conditions is limited, but the formation of a stable state of the internal environment creates opportunities to adapt to threats from the external environment. Timely detection of potential risks in the activities of the insurer, provision of reserves to cover possible losses related to risks, enable companies to overcome the consequences of risks with minimal losses. The methodical basis for evaluating potential risks in the insurance company's activities is strategic analysis methods, such as PEST and SWOT analysis. Their results give an idea of the state of threats in the external environment and the potential opportunities of the insurer's internal reserves. The methods of economic-mathematical modeling and forecasting make it possible to assess the current state of the company and investigate its behavior under the influence of external and internal factors. The basis of the forecast model of risk analysis of an insurance company is formed by the coefficient of risk of loss of solvency, calculated according to the key parameters of the assessment of its financial condition. The reliability of the forecast of the possible risk of loss of the insurer's solvency is ensured by constructing a trend line and forming a forecast sheet in the MS Excel software environment. The forecast sheet forms the probabilities of the values of the indicators with a distinction between optimistic and pessimistic levels of the forecast. Using the trend line and finding the value of the coefficient of determination (R2), the probability of realizing the forecast of growth or reduction in the value of each individual parameter of the model is determined. The practical significance of the obtained results lies in the possibility of increasing the efficiency of the use of available resources and reserves in the process of risk management. The proposed methodical approach can be used to assess the impact of risks in the insurer's activities, which will increase the accuracy of the obtained results.

THE MEDIATING ROLE OF EARNINGS MANAGEMENT IN THE RELATIONSHIP BETWEEN THE FIRM LIFE CYCLE AND THE COST OF EQUITY: EVIDENCE FROM BANKS IN IRAQ

The present study seeks to examine the interaction among three separate variables. The initial variable relates to the organization's life cycle and financial attributes. The second variable pertains to the procedures of firm management that influence performance and financial condition, as demonstrated by earnings management. Investors manage the impact of the previous two factors by weighing the risks and potential gains, which the corporation terms as "the cost of equity." We utilized these variables to analyze 15 Iraqi commercial banks that have been listed on the Iraq Stock Exchange for 10 years, equivalent to 150 observations.Our quantitative assessment of the study variables, conducted using models from the relevant literature, has yielded significant findings. We have uncovered a direct correlation between the life cycle and earnings management, indicating a beneficial association. Moreover, we have revealed that each factor exerts a unique and favourable influence on the cost of equity. The correlation between the life cycle and earnings management has led to an increase in the favourable influence of earnings management on the cost of equity. Conversely, the life cycle now has an inverse impact on the cost of equity, with the cost of equity being mainly influenced by the maturity stage. These findings have important implications for stock market traders, as they guide them to direct their investments towards banks that offer higher returns relative to the level of risk, considering the age group and the administration's approach to managing announced profits. This study's implications for stock market traders are significant, as it provides them with valuable insights for making informed investment decisions. It also serves as a guide for future studies in this field.

Does Firm Size Buffer Tax Aggressiveness? Examining Financial Distress and Capital Intensity

This study investigates the relationships between financial distress, capital intensity, and tax aggressiveness, focusing on the moderating role of firm size. Utilizing a sample of property and real estate companies listed on the Indonesia Stock Exchange from 2021 to 2023, the research employs quantitative methods to analyze the influence of financial distress and capital intensity on tax aggressiveness. The findings reveal that financial distress significantly increases tax aggressiveness, indicating that firms facing economic challenges are more likely to pursue aggressive tax strategies to enhance their cash flow. Additionally, capital intensity is positively associated with tax aggressiveness, as firms leverage their capital assets for potential tax benefits. However, the study finds that firm size does not significantly moderate the relationships between financial distress or capital intensity and tax aggressiveness, suggesting that the effects of these variables are consistent across different firm sizes. These results underscore the complex dynamics of corporate tax behavior and highlight the need for firms to carefully consider their tax strategies in the context of financial conditions and capital structure. The research contributes to a deeper understanding of tax aggressiveness in emerging markets and provides implications for corporate managers and policymakers regarding tax planning and regulation