High Debt Research Articles

Comparative Analysis of the Level of Financial Efficiency in the National Construction Services Industry Before and After the Implementation of PSAK 72 with a Two-Stage Data Envelopment Analysis Approach

This study analyzes the financial efficiency of Indonesia's national construction services industry before and after the implementation of PSAK 72 using the Data Envelopment Analysis (DEA) method. It aims to address the poor performance of contractor companies, which have negative operating cash flows and high Debt to Equity Ratios (DER). Input variables include Net Fixed Assets, Operating Expenses, and Total Employees, while output variables are Revenue and Profit Before Tax. Efficiency scores range from 0 to 1, with scores close to 1 indicating high efficiency. Prior to PSAK 72, PP Presisi Tbk and Wijaya Karya Bangunan Gedung Tbk were the most efficient companies, consistently achieving perfect efficiency scores. Total Bangun Persada Tbk was the least efficient. After PSAK 72, Bukaka Teknik Utama Tbk reached maximum efficiency in 2021, while Brantas Abipraya (Persero) was the least efficient in 2020. A Kolmogorov-Smirnov normality test showed the data was not normally distributed, leading to a non-parametric Wilcoxon signed rank test. The test indicated a significant difference in financial efficiency before and after PSAK 72, with a p-value of 0.04. This suggests a notable impact of PSAK 72 on the efficiency of construction companies.

The Causes and Countermeasures of High Debt Ratio in Real Estate Enterprises

The Causes and Countermeasures of High Debt Ratio in Real Estate Enterprises

Financial Risk, Debt, and Efficiency in Indonesia’s Construction Industry: A Comparative Study of SOEs and Private Companies

This study aims to evaluate the financial risk, debt, and efficiency of state-owned enterprises (SOEs) in Indonesia’s construction industry and compare these aspects with those of private companies through financial ratio analysis and efficiency analysis approaches. Four SOEs from the construction sector were evaluated and compared to five private companies with financial data ranging from 2015 to 2022. Financial ratio analysis was applied to assess debt and financial risk, while efficiency analysis utilized data envelopment analysis (DEA) and paired t-tests to validate differences between the two groups of companies. This study reveals that the financial ratio performance of state-owned companies is relatively poor, with low profitability, critical liquidity, and a high debt ratio. Debt, as a source of capital in financing construction projects, causes companies to face a greater debt risk. This study also validates that SOEs have lower efficiency compared to private companies. In response to current challenges, SOEs should prioritize enhancing liquidity through faster receivable collections, debt restructuring, capital infusions, and divestment, reducing non-essential investments, focusing on asset recycling, and improving project efficiency.

Analyzing the Threshold Impact of Public Debt on Economic Growth: an Investigation of the New Member States within the European Union

This paper aims to analyze the impact of public debt on economic growth in eleven EU new member states (NMS) from Central and South-Eastern Europe for the period 2000-2019. More specifically, we investigate if there is evidence of a non-linear (quadratic) relationship in this group of countries. Having in mind different economic and financial development, historical connections, and geographical proximity, we split them into three more homogenous groups: Balkan countries (BAL-4), Baltic countries (B-3), and Visegrad countries (VIS-4). The results of our study in all models indicate a statistically significant non-linear impact of public debt ratios on annual GDP per capita growth rates. The results across all models show a significant non-linear impact of public debt ratios on annual GDP per capita growth rates. Further, the calculated debt-to-GDP turning point, where the positive effect of accumulated public debt inverts into a negative effect, is roughly between 42.7%-58% of GDP, dependent on which sub-group we have analyzed. In general, the research may contribute to a better understanding of the problem of high public debt and its effect on economic activity in the new EU.

Country Risk to Face Global Emergencies: Negative Effects of High Public Debt on Health Expenditures and Fatality Rate in COVID-19 Pandemic Crisis

Risk is a variation of performance in the presence of events and it can negatively impact socioeconomic system of countries. Statistical evidence here shows that high public debt reduces health expenditures over time and increases the vulnerability and risk of European countries to face health emergencies, such as COVID-19 pandemic crisis. Overall, then, findings suggest that high public debt weakens healthcare and socioeconomic system of countries to cope with crises, such as COVID-19 pandemic, conflicts, natural disasters, etc. JEL Codes: I18; H12; H51; H60; H63

The Impact of Covid-19 on Earnings Management: Empirical Evidence from Vietnam

Earnings management (EM) is the practice of adjusting profits or earnings on financial statements at the discretion of the management. This study undertook a regression analysis of the earnings management model, with data from 300 non-financial listed companies on the Vietnamese stock exchange during the period 2016 to 2021 to determine whether the COVID-19 pandemic has had an impact on earnings management. To estimate earnings management, compared with the original model, we add the leverage variable (LV) was used as earnings management proxy in this research. The results show that the COVID-19 pandemic positively and significantly impact the earnings management of non-financial listed companies. Moreover, it was found that managers are more involved in real earnings management than accrual earnings management, implying that financially distressed firms need to reassure investors to raise more capital during the pandemic. However, there is no evidence of a trade-off between these two techniques during the pandemic compared to before the pandemic. Additionally, this study provides evidence that the model by Roychowdhury, following Cohen et al., and the performance-matched model by Jones, following Kothari et al. are more suitable for detecting EM behavior when factoring in the financial leverage (LV) variable for firms with a high debt ratio in developing countries. JEL Classification: H8, M42

HOW DO DIFFERENT DEBT LEVELS INFLUENCE THE FINANCIAL PERFORMANCE OF FMCG COMPANIES IN INDIA?

This study examines the impact of capital structure on the financial performance of Fast-Moving Consumer Goods (FMCG) companies listed on the Bombay Stock Exchange (BSE) from 2011 to 2021. It focuses on how varying levels of short-term, long-term, and total debt influence key financial metrics such as Return on Assets (ROA), Return on Equity (ROE), Earnings Per Share (EPS), and Tobin’s Q. Using regression models with panel data, the research evaluates the relationship between debt ratios and financial performance, utilizing both fixed and random effects models. The findings reveal that higher levels of debt, especially long-term debt, negatively impact financial performance. Short-term debt is more commonly used in the FMCG sector, but overall, debt tends to reduce profitability and shareholder value. Notably, Earnings Per Share (EPS) had the highest average among the performance indicators, though all debt ratios demonstrated significant negative correlations with ROA, ROE, EPS, and Tobin’s Q. The study also highlights that larger and older firms are more effective at managing the negative effects of debt, performing better financially than smaller or younger firms. It recommends that FMCG companies prioritize internal funding over debt, as high debt levels can lead to financial strain. Future research could explore the impact of capital structure in other industries or include macroeconomic factors.

Pengaruh Pinjaman Online Terhadap Kesehatan Mental Mahasiswa

This study investigates the impact of online lending on the mental health of information systems students at Atma Jaya University Yogyakarta class of 2022. The rapid advancement of financial technology (fintech) has introduced online lending as a popular financial option among students who need additional funds for daily needs or academic activities. However, easy access to online loans is often accompanied by significant financial stress, leading to psychological distress, high debt burden, and tight deadlines. This study aims to explore the long-term effects of online loan usage on college students' mental health. Using qualitative methods, data will be collected through a digital questionnaire distributed through Google Forms. This study hopes to provide valuable insights for the development of policies and educational programs that support the healthy and responsible use of financial technology.

FINANCIAL RATIO ANALYSIS AS A TOOL FOR MEASURING FINANCIAL PERFORMANCE IN PT. BATURAJA CEMENT (PERSERO)

The financial performance of PT Semen Baturaja (Persero) for the period 2020-2022 needs to be evaluated to determine the effectiveness of management in managing the company's finances. The purpose of the study is to measure the financial performance of PT Semen Baturaja (Persero) through financial statement analysis over the period 2020, 2021, and 2022. This study uses various types of financial ratios such as Liquidity, Solvency, and Profitability. The research method used is qualitative with a quantitative approach. The data used is sourced from the financial statements of PT Semen Baturaja (Persero) Tbk for the years 2020, 2021, and 2022, obtained from the Indonesia Stock Exchange. The analysis results show that the company has good liquidity because current assets are higher than current liabilities. The solvency ratio level is quite healthy. Although the Debt to Asset Ratio (DAR) indicates high debt, the low Debt to Equity Ratio (DER) values show that most of the assets are still funded by equity. The company's profitability level is less healthy. Although the Gross Profit Margin (GPM) shows positive results and is higher than the industry average, other ratios such as Operating Profit Margin (OPM), Net Profit Margin (NPM), Return on Assets (ROA), and Return on Equity (ROE) indicate that the company has significant room for improvement in operational efficiency, cost management, and optimization of asset and equity utilization. Keywords: Analysis, Liquidity, Solvency, Profitability

Student Debt Associated with Entry-level Athletic Training Education.

Borrowers burdened by high student debt generally experience financial constraints that can impact them both personally and professionally. To date no published data exists that profiles the education-related debt accrued by entry-level certified athletic trainers. To assess the scope and scale of student debt associated with the completion of an entry-level athletic training degree. Cross-sectional study. Online web-based survey. Participants were recruited with assistance from the National Athletic Trainers' Association, who disseminated the survey to 18,689 certified athletic trainers who were members in good standing and who had earned their certification between 2004 and 2022. A total of 2,271 individuals accessed the survey. The overall amount of student debt incurred to complete an entry-level degree in athletic training and the initial monthly repayment amount were collected from survey respondents. Education-related debt-to-income ratio (DTIR) and monthly payment DTIR which are measures of financial health/stability were also calculated from the acquired survey data. Among athletic trainers who took out student loans, the average amount owed by entry-level athletic trainers for the period spanning 20042022 was $61,717, with an average initial monthly loan payment amount reported to be $453. The mean education related DTIR calculated from respondents was 169%, which exceeded the benchmark value of 100% recommended within the finance industry. Also, the average monthly payment DTIR calculated from study participants was .144, which approached the recommended acceptable upper-limit of .15. Education-related DTIR and monthly payment DTIR values reported by respondents suggests the potential for entry-level athletic trainers to experience financial challenges related to their student debt.

The socioeconomic dimensions of BRICS: a comparative analysis over three decades 1990 to 2020

BRICS countries are not only striving to gain more political and economic clouts in the developing world but are also influencing global governance. However, each one is facing its own economic concerns and challenges. For instance, India has been witnessing a severe economic slowdown, while Brazil is maintaining a low growth rate along with persistent high inflation and unemployment problems. South Africa has been mired with low growth rate, rising youth unemployment, high debt and inequality. China has been suffering from a sluggish growth on account of the trade war with the US, and Russia has massively suffered from US and EU sanctions. Despite these problems, they are trying to lay a robust foundation of cooperation with the countries in the Global South amid their rising discontent over perceived Western dominance of the global institutions. With this background, our main focus here is to comprehend socioeconomic dimensions from a comparative assessment to develop an understanding and visualize their relative developmental positions over the last three decades (1990 to 2020). Analyzing the data, the study clearly observes visible diversities within them. While China’s socioeconomic dimensions have improved remarkably, followed by India, South Africa could achieve relatively only with minimal success. It demonstrates that certain BRICS countries while achieving significant strides in their socioeconomic development outcomes, others are encumbered and struggling with challenges over the last three decades (1990 to 2020) without witnessing similar success and yet to overcome those challenges. The uneven economic progress of economies needs to be addressed by individual economies by laying down efficient economic policies, which have been falling short of the average progress in any economic development parameters if their economic and social cooperation needs to be strengthened towards achieving higher economic progress by mutually benefitting from their stronger socioeconomic ties and simultaneously exert greater influence in the world stage.

Kriterien für wirtschaftspolitische Maßnahmen zum Abbau kritischer Importabhängigkeiten

Abstract In this study, an analytical scheme is developed to operationalise the objective of strategic autonomy in a cost-effective way. This is highly relevant as the concept of strategic autonomy is fuzzy and can therefore easily be misinterpreted in a way that would lead to large government subsidies for inefficient purposes in a time of high public debts, low growth and many other public spending needs. The main criteria of the analytical scheme are the degree of critical import dependency on a specific product, the existence of production in the EU and a long-term comparative advantage for this product, as well as the possibility of diversified friend-shoring to secure the supply of this product. Based on a product-specific evaluation of these criteria, it can be determined whether or not government intervention is justified in order to achieve sufficient de-risking of critical import dependencies. This is illustrated using several examples, including raw materials, pharmaceuticals, electric vehicles, batteries for electric vehicles and solar modules. If government intervention is found to be justified, the choice of instrument should be based on the principle that the degree of intervention should be minimised, provided that de-risking objective is sufficiently achieved. Several instruments such as warehousing, incentives for firm-based de-risking, trade barriers and subsidies are discussed. Subsidies in general should be the last resort.

Financial Development in the Face of Rising Public Debt in Ghana: A Qualitative Study

This qualitative study explored the relationship between financial development and public debt within the context of Ghana. It sought to comprehend the impact of rising public debt on financial development and the broader implications for economic growth and stability in Ghana, a lower middle-income country grappling with high debt levels and fiscal challenges. The study thus employed a qualitative research paradigm, gathering data through face-to-face interviews with sixteen (16) economic and financial experts from five (5) prominent banks in Ghana. This method allowed for an in-depth appreciation of the subjective perceptions and insights of stakeholders directly involved in or affected by Ghana’s financial and public debt management sectors. Ethical considerations were meticulously adhered to, ensuring informed consent and confidentiality of the participants. The study revealed a moderate pace of financial development hindered by high-interest rates and limited access to credit. Public debt was perceived as excessively high, posing significant financial stability and economic growth risks. Policy recommendations from the study emphasize the need for fiscal discipline, improved regulatory frameworks, enhanced financial inclusion, and strategic investment in infrastructure and education. This study contributes to the literature by providing a qualitative insight into the complex dynamics between financial development and public debt in Ghana, a topic that has been less explored in empirical studies, especially from a qualitative perspective.

Investigating Canadian Radiology Residents' Personal Financial Literacy: A Nation-Wide Assessment.

Purpose: Canadian resident physicians carry large debt to finance their education, which impacts their wellness and their future decision making. The objective of this observational study is to assess the financial literacy of Canadian radiology residents through testing their financial knowledge and examining their current financial status. Methods: A survey was designed to assess the financial literacy and current financial status of radiology residents, which was distributed to Canadian radiology residents via Google Forms. Descriptive analyses on preliminary data and the association between level of training and financial quiz scores were obtained. Results: 104 valid responses from 16 universities were received. The majority (53%) of residents indicated that their debt was greater than $150 000. Residents on average scored 71% on the financial quiz and the scores were not associated with training level (P = .71). The majority (89%) of residents indicated a strong interest in a formal financial literacy curriculum, with 80% preferring a physician-led curriculum. Conclusion: Overall, residents face a high debt burden. Current resident physicians value a formal financial literacy curriculum as a part of their residency program despite existing financial knowledge. Most importantly, residents feel that a curriculum created with involvement of other physicians would be optimal.

SOME FACTORS THAT INFLUENCE ON DEBT POLICY

A company is considered at risk if it has a large portion of debt in its capital structure, but conversely, if a company uses little or no debt at all, the company is considered unable to take advantage of additional external capital that can improve the company's operations. Based on these reasons, managers are required to be more careful in determining debt policies in their companies. Meanwhile, according to the trade of theory, the higher the debt, the higher the bankruptcy burden. Based on the general assumptions of the pecking order theory and trade of theory, the use of debt should be low. However, many companies still pay high debt. From these reasons, research on debt policy needs to be examined. This study aims to empirically prove the impact of company characteristics, asset structure, and profitability on debt policies in property and real estate companies listed on the Indonesia Stock Exchange (IDX) in 2019-2021. The data used in this study were 28 companies. The sample used was 84 sample data selected using purposive sampling method which were processed using EViews version 12. The result of this study indicates that all independent variables simultaneously have no significant impact on debt policy as shown by the results of the F test. The results of the T test explain that company characteristics have a negative and insignificant impact on debt policy, asset structure has a negative and insignificant impact on debt policy, and profitability has a positive and insignificant impact on debt policy.

Corporate bankruptcy and banking deregulation: The effect of financial leverage

We investigate the impact of deregulation-induced banking competition on corporate credit risk. Although banking competition does not, on average, affect corporate bankruptcy rates, we find that it causes corporate bankruptcies to increase significantly for high-leverage firms. We show that higher borrowing costs for high-leverage firms post-deregulation and the resulting credit rationing may be key factors behind our findings. The effect of deregulation lasts for up to seven years after the introduction of deregulation and originates mainly from firms that have high short-term debt and are financially constrained. Our results suggest that banking competition, which is expected to expand lending and reduce its cost, may, in fact, create more challenging credit conditions, particularly for firms that are more heavily dependent on external funding.

Earn More Tomorrow: Overconfidence, Income Expectations, and Consumer Indebtedness

AbstractThis paper examines whether biased income expectations due to overconfidence lead to higher levels of debt taking. We show suggestive evidence for a link between overconfidence and borrowing behavior in a representative survey of German households (German Socio‐Economic Panel–Innovation Sample [GSOEP‐IS]). This motivates a laboratory experiment to study causality behind these effects. In two experiments, participants can purchase goods by borrowing against their future income. We exogenously manipulate overconfidence about income expectations by letting income depend on relative performance in hard and easy quiz tasks. In the main experiment, we successfully generate biased income expectations and show that participants with higher income expectations initially borrow more. Overconfident participants scale back their consumption after income feedback. However, they remain in higher debt at the end of the experiment, which has real financial consequences. In a robustness experiment, we rule out that overborrowing is driven by low prices of goods. Even though the expected income manipulation works less well in this experiment, debt‐taking behavior is very similar and correlates with income expectations and overconfidence.

External Debts, Re-Election Possibilities and the Infrastructure Development Via Public Private Partnership: Evidence from Low- and Middle-Income Countries

Public private partnership in infrastructure development can be used as an ‘off the balance' tool to help governments hide real fiscal problems and facilitate the transfer of debt-repayments to their succeeding administrations. Using negative binomial regressions on a panel dataset of 40 low-and middle-income countries from 1992 to 2021, the paper finds that governments which high short-term external debts in stock and flows measurements are more motivated to participate in public private partnership. The results are robust through sensitive tests on different sampled dataset. These findings reaffirm the existence of fiscally opportunistic behaviors of public sectors in public private partnership in low-and middle-income countries. Results also indicate that governments which face re-election limitations have stronger motivations to implement infrastructure projects via public private partnership. These impacts are found to be stronger in less-developed economies and in Sub-Saharan African countries.

IMPACT OF PUBLIC DEBT ON INFRASTRUCTURAL DEVELOPMENT IN NIGERIA (1990-2023)

The challenges of a high debt portfolio with deficit infrastructural development have affected the needed economic development in Nigeria. The study analyzed the impact of public debt on infrastructural development in Nigeria. The scope of the study was taken from 1990 to 2023; secondary data were sourced from the Debt Management Bulletin and Central Bank of Nigeria Bulletin. ARDL model was used to analyze the data, and the result revealed that external debt had positive and significant impact on infrastructural development in the long run on the other hand, the domestic debt had a negative but insignificant impact on infrastructural development in Nigeria which means that domestic if not well managed will lead to a decrease in infrastructural development in Nigeria. However, the ECT (-1) further revealed that the model is reliable with its value of (-0.522833) which shows that the model is converging. Based on the study's findings, it can be said that Nigeria uses its public debt to support infrastructural development. Nonetheless, to guarantee that infrastructural development in translate to economic growth in Nigeria, there is need for Government to constitute committee to properly monitor the implementation of loans collected. Therefore, any effort by Nigeria's government to boost infrastructural through infrastructural development by continuously using debt, especially external, should be steady make policy for proper monitoring of the implementation of the projects collected loans for. Similarly, Central of Bank of Nigeria, Federal Ministry of Finance and Federal Ministry of Works should ensure through projects tracking all capital projects are proper monitored of the implemented.

Assessing financial stability in Southeast Europe (SEE): An econometric perspective

In the last decade, the global financial landscape, including Southeast Europe's eleven diverse economies, has been significantly impacted by multiple financial crises. These crises have led to economic downturns, unemployment spikes, and unstable financial structures. This study investigates financial stability and risks in Southeast Europe from 2012 to 2021, focusing on Albania, Bosnia and Herzegovina, Bulgaria, Cyprus, Montenegro, Greece, Croatia, North Macedonia, Kosovo, Serbia, and Turkey. It aims to identify factors influencing financial stability amid distinct economic challenges posed by global crises. Utilizing the Financial Stability Index (FSI) as the dependent variable, alongside the Banking Stability Index (BSI), inflation rate, GDP, and public debt as independent variables, the research employs data from the World Bank and The Global Economy. Analysis through STATA software and methods like OLS, OLSR, FE, RE, and GMM reveals the critical role of banking in financial stability, with a robust BSI positively impacting it, while inflation poses additional risks. The study advises Southeast European policymakers to prioritize banking stability and economic growth to enhance financial stability, while also managing inflation and public debt to reduce future financial risks. Our findings suggest that a one-unit increase in the BSI is associated with a 3.35-unit increase in the FSI, highlighting the banking sectors significant influence on regional financial stability. High public debt levels, conversely, are found to correspond with reduced financial stability, with a strong negative correlation of -0.634 between FSI and public debt. These findings underscore the importance of robust banking systems and sound fiscal policies in maintaining financial stability in the face of economic adversities.