Higher Financial Costs Research Articles

Informal financing access: Can fintech development affect trade credit access?

This paper investigates the relationship between fintech development and corporate trade credit access for Chinese listed companies between 2011 and 2022. The empirical results provide evidence that fintech development is significantly and positively associated with a firm’s access to trade credit. We also demonstrate that information asymmetry is a possible economic channel. In addition, fintech has more pronounced positive effects on the credit trade of non-state-owned enterprises and firms with high financing costs. Our primary findings are not driven by alternative measures and endogeneity concerns.

Comparative Analysis of Single and Multiagent Large Language Model Architectures for Domain-Specific Tasks in Well Construction

Summary This paper explores the application of large language models (LLMs) in the oil and gas (O&G) sector, specifically within well construction and maintenance tasks. The study evaluates the performances of a single agent and a multiagent LLM-based architecture in processing different tasks, offering a comparative perspective on their accuracy and the cost implications of their implementation. The results indicate that multiagent systems offer improved performance in question and answer (Q&A) tasks, with a truthfulness measure 28% higher than single-agent systems but at a higher financial cost. Specifically, the multiagent architecture incurs costs that are, on average, 3.7 times higher than those of the single-agent setup due to the increased number of tokens processed. Conversely, single-agent systems excel in Text-to-SQL (structured query language) tasks, particularly when using the Generative Pre-Trained Transformer 4 (GPT-4), achieving a 15% higher score compared to multiagent configurations, suggesting that simpler architectures can sometimes outpace complexity. The novelty of this work lies in its original examination of the specific challenges presented by the complex, technical, unstructured data inherent in well construction operations, contributing to strategic planning for adopting generative artificial intelligence (AI) (Gen-AI) applications and providing a basis for optimizing solutions against economic and technological parameters.

Using Less Processed Food to Mimic a Standard American Diet Does Not Improve Nutrient Value and May Result in a Shorter Shelf Life at a Higher Financial Cost

BackgroundThe “clean eating” trend suggests that consuming fewer processed foods is important for healthy diets. Yet, a diet of mostly ultra-processed foods (UPFs) can meet recommendations from the Dietary Guidelines for Americans. Whether a diet comprised mostly of simple ingredient foods can provide a low-quality diet remains unexplored. ObjectivesThe objective of this study was to compare the diet quality, shelf stability, and cost of 2 similar nutrient-poor menus, one containing primarily UPFs and the other containing less-processed foods (LPW), as defined by the Nova classification system. MethodsA “Western” menu using LPW was developed to match the meals and recipes of a menu that contained more-processed foods (MPW). Processing level was determined using the Nova classification system. Final menus were assessed for nutrient quality and Healthy Eating Index (HEI) score. Shelf stability of foods/ingredients on both menus was determined from food storage guidance manuals. The condition of each food item when purchased (room temperature, frozen, refrigerated) was used to estimate the number of days until expiration. Food costs were determined from prices at grocery chains in Fall 2023. ResultsThe LPW had similar nutrient density and diet quality scores to the MPW (HEI scores of 44 and 43, respectively). The LPW included 20% energy (kcal) from UPFs, whereas the MPW included 67% energy from UPFs. Relative percentages of shelf-stable, frozen, and refrigerated foods were similar. Using the Kaplan-Meier survival analysis method, median time to expiration of the LPW menu items was 35 d compared with 120 d for the MPW items. The “per person” cost reflecting only the amount of the food used in the menu was $15.91/d for the LPW and $9.85/d for the MPW. ConclusionsLess-processed menus can have comparable diet quality with more-processed menus although being more costly and less shelf stable.

Problems and Strategies of Financial Services Supporting the Real Economy

With the rapid development of China's economy, the status and role of the financial industry in the national economy have become increasingly prominent. The healthy development of the financial industry is of great significance for promoting the development of the real economy, adjusting the economic structure, and upgrading the economy. However, there are still some problems with financial services supporting the real economy in China, such as the misallocation of financial resources, high financing costs, and rising financial risks. These issues limit the support financial services can provide to the real economy. This paper analyzes the main problems currently existing in financial services supporting the real economy and proposes countermeasures from optimizing the allocation of financial resources, reducing financing costs for the real economy, preventing and resolving financial risks, and deepening the structural reform of the financial supply side. The aim is to provide references for relevant personnel.

Financial mismatch and corporate litigation risk

This study investigates how financial mismatches impact corporate litigation risk among China's A-share listed companies from 2017 to 2022. A financial mismatch generally refers to a situation in which a company's financial resources are not optimally aligned with its investment needs, which can lead to inefficiencies and higher financing costs. Our study found that such mismatches increase the likelihood that companies will face legal disputes, which can escalate costs and damage reputations. Additionally, financial linkages—connections between companies and financial institutions—can mitigate these risks by reducing companies’ financing constraints, thereby lowering litigation risk. Using robust statistical methods, including ordinary least squares regression, robustness, and endogeneity tests, we confirm these findings, thus contributing to our collective understanding of the financial dynamics that influence corporate litigation risk and highlighting the importance of aligning financial strategies with corporate needs to minimize legal challenges and enhance stability.

Risk Assessment of Highway Infrastructure REITs Projects Based on the DEMATEL—ISM Approach

Highway infrastructure projects financed by real estate investment trusts (REITs) have garnered significant attention due to their potential for generating stable returns. However, assessing the risks associated with such projects remains a critical challenge. This study addresses this gap by proposing a novel approach to risk assessments utilizing the Decision-Making Trial and Evaluation Laboratory (DEMATEL) integrated with Interpretive Structural Modeling (ISM). Unlike traditional risk assessment methods, which often treat risk factors as isolated entities, the DEMATEL—ISM approach provides a comprehensive framework that reveals the direct and indirect relationships between risk factors, thus offering a systemic understanding of the interactions. The results found that falling market prices, insufficient operating revenues, and operational inefficiencies were direct influences, and high financing costs and force majeure were the fundamental influences, while other factors acted as intermediate influences. In addition, the study identifies direct and indirect relationships between different risk factors, providing a hierarchical topology of risk factors to reflect the relationships between the risk factors. The findings not only contribute to enhancing the understanding of risk dynamics in highway infrastructure REITs projects, but also offer a structured framework for risk assessment and mitigation. This research represents a significant innovation in the field of infrastructure investment risk management, offering practical implications for project planning, decision-making, and risk management strategies.

The Impact of Mandatory Corporate Social Responsibility Disclosure on Enterprise Risk-Taking: Facilitative or Constraining?

Using Chinese A-share listed companies from 2006 to 2013 as the research sample, this paper empirically examines the impact and mechanism of the mandatory CSR disclosure policy on Chinese firms’ risk-taking by combining the difference-in-differences (DID) approach. This study finds that the implementation of the policy increases firms’ operating costs and leads to an increase in their financing constraints, which ultimately creates a disincentive for firms to take risks. Second, we also find that, relative to firms that do not disclose CSR reports, the sales revenues, R&D investment and investment levels of firms subject to CSR disclosure are significantly reduced, which may be the result of firms’ tendency to operate conservatively. In addition, heterogeneity analyses suggest that the dampening effect of mandatory CSR disclosure policies on risk-taking is stronger for firms with higher financing costs and for non-state-owned firms. This study further explores the mechanism of the impact of mandatory CSR disclosure on firms’ risk-taking, which will help the government to formulate and improve the information disclosure policy regarding driving the transformation of corporate development in the future.

Arbitraging the Yield Curve: A Free Lunch?

Banking crises can occur due to the mismatch of assets and liabilities. One of the main assumptions behind maturity mismatching is the incentive to arbitrage the yield curve in the market of loanable funds. Banks borrow at low rates and lend at higher rates to increase their profitability. The equilibrium in the evenly rotating economy (ERE) is a flat yield curve that equals the originary interest rate. This article challenges the notion that banks will always attempt to arbitrage the yield curve in a free market and explores how the price mechanism via interest rates acts as a brake to maturity mismatching. Maturity mismatching is a risky activity that is penalized through a higher cost of funding by different types of lenders. If this is true, it follows that a flat yield curve is not attainable in an uncertain world because financial intermediaries that engage in maturity mismatching will create a further spread between themselves and financial intermediaries that do not engage in this practice in the market of loanable funds. In addition, following Mises, the article discusses how economists should proceed with caution when applying equilibrium constructs, such as the ERE, which can disregard the function and properties, belonging to financial instruments such as debt and equity, of allocating risk in an uncertain world.

Financing Dilemma and Optimization Strategies of High-Tech Enterprises

In recent years, Chinas economic market has been developing rapidly and the number of enterprises has been increasing. However, the development of enterprises needs to rely on the support of capital, due to the high financing threshold of the capital market, ordinary commercial banks and private financial institutions can not fully meet the capital needs of all enterprises in the market. This has, to a certain extent, exacerbated the phenomenon of capital bottlenecks and stagnant development faced by Chinese enterprises, and many even went bankrupt due to poor capital turnover. This paper combines the views and conclusions put forward by a number of professional articles to analyze the status quo and predicament of the company's financing. It is found that high-tech enterprises have problems such as less application of financing methods, high financing costs and unreasonable financing structures. By optimizing the financing structure, improving the company's credit level to expand financing methods, and reducing financing costs, the government has introduced helping policies and other optimization strategies that can promote the healthy and stable development of high-tech enterprises.

Reducing the cost of capital through international climate finance to accelerate the renewable energy transition in developing countries

Despite a vast potential, the accessibility of low cost finance remains a critical barrier to the deployment of Variable Renewable Energy (VRE) in many developing countries. High financing costs threaten the competitiveness of renewable energy technologies and impede progress in the energy transition. This study aims to assess the extent to which international climate finance could help reduce the cost of capital for VRE investments and accelerate the renewable energy transition in developing countries. We employ the IMACLIM-R multi-regional Integrated Assessment Model (IAM) to examine various climate finance scenarios, factoring in the interaction between public and private capital through a dedicated model for the average cost of capital (CoC). The results show that international climate finance can significantly enhance the adoption of renewable energy in regions that receive this support. For instance, Africa could achieve +43% electricity generation from VRE by 2030 in a scenario with deep risk sharing and mitigation for VRE investments, compared to a no-policy scenario. Our study demonstrates that reducing the financing costs of VRE investment through international climate finance encourages clean and affordable energy development. However it must be complemented by other policies to achieve more ambitious climate and sustainable development objectives.

Does bank-tax-interaction benefit small and medium manufacturer? An intertemporal signaling game

High cost of financing is a major obstacle to the growth of small and medium enterprises (SMEs), with opaque operational information being an important factor. Recently, a novel type of bank loan, bank-tax-interaction (BTI), which requires SMEs to share their previous tax information with the bank (e.g., via the tax administration), aims to lower SMEs’ financing costs by improving the information transparency. We develop a two-period intertemporal signaling game in which market demands are uncertain and correlated over the two periods. The manufacturer (SME) that is better informed about the market relies on bank loan for production, and the bank offers two types of bank loans: BTI and the traditional bank credit loan (BCL). Interestingly, we find that BTI does benefit the manufacturer when the market in the last period is low and the demand uncertainty is small. Notably, BTI does not lower the manufacturer’s financing cost, but reduces the operational inefficiency caused by the manufacturer distorting the amount of the bank loan to convey market information to the bank under BCL. Moreover, the impact of the correlation between the markets in the two periods may be non-monotonic on the manufacturer’s total profit, but monotonic on the bank’s total profit. Our findings shed light on the underlying mechanism by which BTI benefits small and medium manufacturers and provide insights into the operations of small and medium manufacturers and banks.

CBAM, Hydrogen Partnerships and Egypt’s Industry: Potential for Synergies

Abstract This article examines the hydrogen partnerships between Germany, the EU and Egypt in the context of the EU’s Carbon Border Adjustment Mechanism (CBAM). Germany, the largest future hydrogen importer in the EU, and Egypt, a country with an ambitious hydrogen strategy, are developing a partnership to boost renewable hydrogen production in Egypt. However, high funding costs are a barrier to capital-intensive investments in hydrogen projects, in particular in emerging economies. CBAM provides an incentive to decarbonise but faces resistance in emerging economies as it may undermine the competitiveness of emission-intensive local production. Combining industrial development with hydrogen production could be a more promising partnership strategy than a narrow one focused only on producing hydrogen for export to the EU. By aligning hydrogen partnerships with local development goals, CBAM acceptance can be improved, as industrial development could be climate-friendly, making exports into the EU easier while creating new value chains to the benefit of EU producers.

Impact of Sociodemographic and Hospital Factors on Inpatient Bilateral Reduction Mammaplasty: A National Inpatient Sample Analysis

Background: Although reduction mammaplasty remains a common procedure in plastic surgery, its interaction with sociodemographic and economic disparities has remained relatively uncharacterized on a nationwide scale. Methods: Patients who underwent reduction mammaplasty were identified within the 2016–2018 National Inpatient Sample databases. In addition to clinical comorbidities, sociodemographic characteristics, hospital-level variables, and postoperative outcomes of each patient were collected for analysis. Statistical analyses, including univariate comparison and multivariate logistic regression, were applied to the cohort to determine significant predictors of adverse outcomes, described as extended length of stay, higher financial cost, and postoperative complications. Results: The final patient cohort included 414 patients who underwent inpatient reduction mammaplasty. The average age was 45.2 ± 14.5 years. The average length of stay was 1.6 ± 1.5 days, and the average hospital charge was $53,873.81 ± $36,014.50. Sixty (14.5%) patients experienced at least one postoperative complication. Black race and treatment within a nonmetropolitan or rural county predicted postoperative complications (P < 0.01). Black race, lower relative income, and concurrent abdominal contouring procedures also predicted occurrence of extended length of stay (P < 0.01). Hospital factors, including larger bed capacity and for-profit ownership, predicted high hospital charges (P < 0.05). Severity of comorbidities, measured by a clinical index, also predicted all three outcomes (P < 0.001). Conclusion: In addition to well-described clinical variables, multiple sociodemographic and economic disparities affect outcomes in inpatient reduction mammaplasty.

Redox System and Oxidative Stress-Targeted Therapeutic Approaches in Bladder Cancer.

Bladder cancer (BCa) is the most common genitourinary malignancy, with a high global incidence and recurrence rate that is paired with an increasing caregiver burden and higher financial cost, in addition to increasing morbidity and mortality worldwide. Histologically, BCa is categorized into non-muscle invasive, muscle invasive, and metastatic BCa, on the basis of which the therapeutic strategy is determined. Despite all innovations and recent advances in BCa research, conventional therapies such as chemotherapy, immunotherapy, radiotherapy, and surgery fall short in the complete management of this important malignancy. Besides this worrying trend, the molecular basis of BCa development also remains poorly understood. Burgeoning evidence from experimental and clinical studies suggests that oxidative stress resulting from an imbalance between reactive oxygen species (ROS) generation and the body's antioxidant production plays an integral role in BCa development and progression. Hence, ROS-induced oxidative stress-related pathways are currently under investigation as potential therapeutic targets of BCa. This review focuses on our current understanding regarding ROS-associated pathways in BCa pathogenesis and progression, as well as on antioxidants as potential adjuvants to conventional BCa therapy.

Financial policy competition neutrality and cost of financing–An empirical study based on A-share listed companies

The problem of expensive financing for firms, especially the high cost of financing, has become a major concern and research topic in the academic community. However, existing research has paid limited attention to the mechanism of financing cost reduction. Particularly, there is a lack of in-depth research into practical factors that can effectively reduce the financing cost of enterprises and enhance their financing efficiency. Based on the perspective of internal control quality, this paper empirically finds that competitive financial policy neutrality significantly reduces firms' financing costs, and meanwhile, the quality of internal control strengthens such inhibitory mechanism.

Encuesta a las empresas españolas sobre la evolución de su actividad: cuarto trimestre de 2023

Rationale The Banco de España Business Activity Survey (EBAE) provides real-time information on a broad sample of Spanish firms’ turnover, employment and costs and prices. This is particularly helpful for diagnosing current economic developments. Takeaways •Firms reported no change in their turnover in 2023 Q4, after it decreased in Q3, and perceived a fall in employment. •Inflationary pressures on production costs and selling prices are reported to have softened somewhat, but expectations suggest that they will increase slightly next year. •Business activity has been affected by growing economic policy uncertainty, labour shortages and an increase in factors related to the tightening of financing conditions (difficulties in accessing finance and higher financial costs).

The adverse impact of corporate ESG controversies on sustainable investment

Global businesses are facing increasingly significant climate risks. Firms with ESG controversies will likely suffer from higher financing costs and inadequate investment capability, leading to investment inefficiency. We use a newly introduced ESG Controversy Score database to investigate the relationship between ESG controversies and corporate investment efficiency. The results show that ESG controversies significantly reduces firms’ overall investment efficiency, and such adverse impact is manifest in underinvestment inefficiency. Further analysis indicates that such a negative effect is more pronounced in firms with larger size and higher analyst coverage. Our findings highlight the significant role of ESG misbehaviour in corporate sustainable development.

Are Antibiotics the New Appendectomy?

Prior to the development of laparoscopic procedures, open appendectomy was the standard of care for the majority of appendicitis cases. Recently, studies have debated using antibiotics as a first-line treatment in uncomplicated appendicitis cases. The definition of uncomplicated appendicitis is not always clear-cut; however, with the large-scale accessibility of radiologic techniques, it is becoming increasingly easier to classify patient groups. As suggested by clinical and radiological patient data, this has raised the speculation of considering antibiotic therapy as the sole treatment modality in uncomplicated appendicitis cases. We aim to compare the options of surgery and antibiotics only in terms of efficacy, complications, and financial cost. A range of databases and search strategies were adopted, and various databases were used, including PubMed, ScienceDirect, Google Scholar, and JAMA. Collectively, 30 studies were reviewed, but only 18 were included. Efficacy rates were higher in the appendectomy group. Nevertheless, the antibiotics-only group maintained an efficacy rate greater than 70% at one-year follow-up. Risk factors that decreased the efficacy in medical management included the presence of appendicolith, neoplasm, appendiceal dilatation, peri-appendiceal fluid collection, higher mean temperature, CRP, and bilirubin. Complications were more frequent and significant in the surgery group. These included complications related to anaesthesia, surgical site infections, damage to nearby structures, and pulmonary embolism. Despite several years of follow-up and disease recurrences, higher financial costs were observed in surgically treated patients compared to the antibiotics-only group. Given the high success rates post-appendectomy for acute appendicitis over the decades, the efficacy of conservatively treated acute appendicitis raises a strong argument when choosing one of the two options. The efficacy remained consistently higher across the literature in the surgery group than in the antibiotics-only group. However, it is still arguable that antibiotics may be a preferable option given an efficacy rate of more than 70% at one year and overall higher complications associated with surgery. The argument of missing a neoplasm by avoiding surgery is valid. However, most are carcinoid neuroendocrine neoplasms with a low probability of metastasis (<5%) and are usually considered benign. Given the current practice focused on conservative and minimally invasive treatments and recently the COVID-19 pandemic, with its restrictions and lessons learnt, antibiotics may be the future standard for treating uncomplicated acute appendicitis. Lastly, we noticed higher efficacy rates in articles published recently than those published at least five to ten years earlier. Antibiotics-only therapy for uncomplicated appendicitis is cost-effective with fewer complications than surgery. However, appendectomies have higher efficacy. Thus, surgical treatment prevails as the standard of care. Future literature should yield larger sample sizes and explore the numbers of emergency appendectomies mandated following antibiotics-only therapy.

Dynamic Evolutionary Game Approach for Blockchain-Driven Incentive and Restraint Mechanism in Supply Chain Financing

The sustainability of financing is an important measure in the development of supply chains. However, the difficulty and high cost of financing have always been critical factors hindering the sustainable development of small and medium-sized enterprises (SMEs). Blockchain technology (BT) is an effective tool to relieve the current problem. Based on it, this study aims to establish Blockchain-driven incentives and restraint mechanisms for SME financing using a dynamic game model in which financial institutions (FIs) and new agricultural business entities (NABEs) are regarded as game subjects. By analyzing the impact of key parameters on the equilibrium state of the game for all stakeholders, several findings are drawn as follows. (1) The usage of BT affects FI loan strategies by influencing their cost in supply chain financing. (2) The usage of BT affects NABE’s strategy choice by influencing their loan interest rate. (3) The usage of BT affects NABE’s strategy choice by influencing their default losses. (4) The usage of BT affects NABE’s and FI’s strategy choices by influencing their additional benefits. This study provides decision-making support for optimal strategy decisions under different conditions and serves as a theoretical reference for the government in formulating financing incentive and restraint mechanisms.

Policy uncertainty and inventory behavior: Evidence from the US manufacturing sector

AbstractThis study investigates the impact of economic policy uncertainty (EPU) on asymmetric inventory investment (i.e., inventory stickiness or sticky inventory management). Using a sample of 74,912 US firm‐year observations over the 1984–2021 period, we observe a significantly negative relationship between EPU and asymmetric inventory investment. Our cross‐sectional analyses reveal that managers' pessimistic expectations regarding future demand and higher cost of funding and maintaining capacity are the channels through which EPU affects asymmetric inventory behavior. Moreover, this negative impact is more pronounced for firms that face longer‐duration uncertainty, rely heavily on government purchases, and have higher firm‐specific political risk. Lastly, we find that reducing inventory stickiness leads to improved firm performance during periods of increasing policy uncertainty.