High Debt Levels Research Articles

The Influence of Capital Structure, Company Growth and Company Value on Share Prices in Coal Sub-Sector Companies Listed on the Indonesian Stock Exchange 2018-2023

This study aims to empirically investigate the impact of Capital Structure, Company Growth, and Company Value on stock prices. Employing a quantitative descriptive research method with a verificative approach, the study utilizes panel data regression analysis to examine these relationships. The research focuses on Coal Sub-Sector Companies listed on the Indonesia Stock Exchange from 2018 to 2023, encompassing a sample of 12 companies. The findings reveal that Capital Structure negatively influences stock prices, indicating that higher debt levels may detract from stock value. Conversely, Company Growth is found to have no significant effect on stock prices, suggesting that growth metrics do not necessarily translate to market valuation in this sector. In contrast, Company Value exerts a positive impact on stock prices, demonstrating that higher valuation metrics are associated with increased stock prices. These results provide valuable insights for investors and stakeholders in the coal sub-sector, highlighting the critical factors that drive stock price movements and offering a basis for more informed investment decisions.

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.

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.

Outward FDI, Profit Shifting, and Its Impact on the Tax Payments of the Parent Firm: A Case of Indian Manufacturing Firms

Outward FDI, Profit Shifting, and Its Impact on the Tax Payments of the Parent Firm: A Case of Indian Manufacturing Firms

Public Debt and It’s Impact on Bank Behaviour and Financial Efficiency: Ghana in Perspective

This study explored the impact of public debt on bank behaviour and financial efficiency in Ghana amid rising global and national debt levels exacerbated by the COVID-19 pandemic’s economic repercussions. An exploratory research design employing a quantitative approach was used to analyze the perceptions of 201 banking professionals across Ghana. The study utilized cluster and purposive sampling techniques to ensure a representative sample. Data were collected on banks’ risk-averse behaviour, credit availability, interest rates, and investment decisions in relation to public debt levels, using survey instruments and regression analysis to quantify the impacts. The findings reveal significant concerns among banking professionals regarding the influence of high public debt on conservative lending practices, increased interest rates, reduced credit availability, and adverse effects on banks’ profitability and the financial system’s stability. Regression analysis confirmed a negative relationship between public debt and financial efficiency, indicating that rising public debt levels may hinder the sector’s operational effectiveness. These results underscore the critical need for strategic fiscal management to mitigate the risks associated with high public debt levels on financial stability and development. Policymakers and financial institutions are urged to consider measures that promote financial sector efficiency and sustainable debt levels, including fiscal consolidation strategies, diversification of investment portfolios, and enhancement of risk assessment models. This study contributes to the empirical discourse on the effects of public debt on financial development by providing insights specific to the Ghanaian context, which has been relatively underexplored.

A Study on the Financial Situation Changes of Major A-share Real Estate Companies Since the Adjustment of Purchase Restriction Policies

To prevent over expansion of property bubbles in China, housing purchase restriction policies were put into effect in 2010. Nevertheless, to be adaptable to economic conditions at that time, there was firstly a relaxation of housing purchase restriction policies in 2014 and after that, several more adjustments were made. By analyzing the financial indicators of the main real estate enterprises in A-share market, this paper wants to find the general trends and common features of those corporations under policy adjustments and changeable market environment. The analysis results show that the majority of firms kept high levels of debt and inventory all the time and from 2014 to 2019, most companies net income margins, net income and operation revenue generally kept increasing. However, as the Coronavirus pandemic broke out at the end of 2019, those profitability measures started to decrease widely and sequentially, even with a new round of policy easing. Facing with this situation, it is suggested that to prevent debt risks, property enterprises could take deleveraging and destocking into consideration and to achieve a soft landing of the housing market, new ways of policy adjustment could be implemented by the government.

Internal Factors Affecting Firm Value (Case Study of Manufacturing Companies in Indonesia)

Despite the pivotal role of the manufacturing sector in the Indonesian economy and its continuous growth, there exists a dearth of comprehensive research on the determinants of firm value within this sector. The lack of understanding regarding how financial factors such as leverage, liquidity, profitability, and firm size impact firm value among manufacturing companies listed on the IDX hinders effective decision-making for investors, creditors, stakeholders, and company management. This study aims to Investigate the effects of firm size, profitability, liquidity, and leverage on firm value is the main purpose of this study, which focuses on manufacturing companies listed on the Indonesia Stock Exchange (IDX). The population comprises manufacturing companies listed on the Indonesia Stock Exchange from 2018 to 2022. Using purposive sampling technique and going through the sampling criteria, a final sample of 82 companies was used in this research. The data analysis method used in this study was a regression analysis using SPSS software. The study revealed that higher debt levels (Leverage) and excessive cash reserves (Liquidity) were linked to decreased firm value. Additionally, the finding also shows that as companies became more profitable, their overall value tended to decrease. On a positive note, larger firms (Firm Size) exhibited higher company value. The findings have implications for investors, creditors, and stakeholders navigating the Indonesian manufacturing sector, providing nuanced insights into financial determinants of firm value. These findings emphasize the importance of a balanced financial strategy for companies and highlight the advantages of size in the economic landscape.

Tax Litigation and Corporate Debt: A Brazilian Perspective

Objective: The study aims to explore the impact of tax litigation on the indebtedness levels of Brazilian firms. The research is motivated by Brazil's high volume of tax disputes and the lack of existing studies focusing on the relationship between tax litigation and firm indebtedness in this particular context.
 Method: The sample includes non-financial firms listed on the Brazilian stock exchange from 2017 to 2022. Linear regression methodology, utilizing panel data and fixed effects, was employed to analyze the relationship. Tax litigation was quantified by summing tax provisions and contingent liabilities, which were then relativized by the firms' total assets. Data were sourced from Comdinheiro software, with additional information manually gathered from company explanatory notes.
 Results or Discussion: The study found a positive relationship between tax litigation and firm indebtedness in Brazil. This suggests that companies involved in more tax disputes tend to have higher levels of debt, pointing towards a complex relationship between the two variables in the Brazilian economic landscape.
 Contributions: This research fills a gap in existing literature by investigating the effects of tax litigation on the capital structure of Brazilian firms. It provides valuable insights that can be beneficial for policymakers, regulatory bodies, and firms in understanding the implications of tax disputes on financial strategies.

Examining payday loan utilization among households with mainstream credit access

PurposeThis study aims to gain insight into the motivations behind the decision to use high-cost payday loans by households who possess mainstream credit and to determine whether this behavior has changed over time.Design/methodology/approachUsing data from Statistics Canada’s Surveys of Financial Security, probit models are used to examine the sociodemographic and financial indicators associated with payday loan use.FindingsThe analysis uncovers the sociodemographic and financial characteristics of payday loan-user households with access to lower-cost short-term loans. The findings indicate that the likelihood of payday loan use has risen over time. Additional analysis reveals that indicators of financial instability are positively associated with payday loan use among this group.Research limitations/implicationsThis research highlights the dichotomy of payday loan users and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.Practical implicationsThis research highlights the distinguishing sociodemographic and financial characteristics of payday loan user households and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.Originality/valueThis is the first study, to our knowledge, to focus analysis on payday loan use of those with access to lower-cost short-term credit alternatives in Canada and to include measures of financial instability in the analysis. This research is timely given the current economic environment of high interest rates and high levels of household debt.

Financial Management Behavior of Millennials

Finance is an important aspect of our daily lives. Managing our finances well can help us achieve our financial goals, face financial challenges, and build a more financially stable future. Financial management in the millennial generation is not yet optimal, there are still many problems faced, including high levels of debt, consumer lifestyle, lack of understanding about investment, changes in lifestyle and consumption patterns. This research study uses qualitative methods. This research study involved 3 informants to provide information related to the study carried out. The findings from this research are that the millennial generation has a diverse understanding of financial management, investment and debt management, the millennial generation shows a combination of internal and external locus of control in financial management and the COVID-19 pandemic has brought significant changes in expenditure, income, and the financial habits of the millennial generation. They are more careful in managing their finances, prioritizing important expenses, and strengthening long-term financial preparations.

The Impact of Insolvency and Bankruptcy Code 2016: A Comprehensive Study

Insolvency and bankruptcy have emerged as significant concerns in the global economy, impacting firms, economies, and individuals alike. Economic volatility, high corporate debt levels, industry disruptions, and inadequate financial management contribute to the escalation of insolvency risks. The COVID-19 epidemic has made these difficulties worse., leading to a surge in bankruptcy filings worldwide. In response to the need for efficient resolution mechanisms, India introduced Insolvency and Bankruptcy Code, 2016 (IBC), introduced for streamlining insolvency proceedings and protecting stakeholders' interests. While the IBC has achieved notable successes in resolving cases, challenges still must be addressed, including declining recovery rates and prolonged resolution times.

STRUKTUR MODAL DAN KINERJA KEUANGAN BANK DI INDONESIA

This research aims to investigate how the capital structure of banks in Indonesia is related to the level of profitability, taking into account company size and the overall impact of the Covid-19 pandemic and whether the increase in capital (debt) provided by the Indonesian government affects bank profitability, providing new results. . considering the increased credit risks resulting from the pandemic. This study fulfills the research objectives by building a broad framework regarding the influence of liquidity, capital adequacy, credit risk, tax protection and ownership structure on bank financial performance. This research uses regression todetermine the effect of leverage, company size and the Covid-19 pandemic on banking profitability. Data for 38 public banks taken from the Bloomberg Terminal in 2014-2021. The research results show that leverage has a positive effect on banking profitability, while company size has a negative effect on leverage and profitability. High debt levels pressure management to meet shareholders' required returns. Large banks prefer risk-free government bonds rather than providing loans to creditors, especially when economic conditions are uncertain. The Covid-19 pandemic has no effect on banking profitability

Quantifying the impact of interest rate volatility on Asian energy companies: A comparative study of fossil and renewable sectors

This study examines the impact of government bond yield volatility on companies in the fossil and renewable energy sectors in five Asian countries from 2015 to 2023. The analysis uses quantile-based methods to explore the spillover effects of yield volatility on companies with high and low debt levels in these sectors. The findings show that yield volatility tends to transmit shocks at lower quantiles and over shorter periods. The network connectedness is more critical at extreme upper and lower quantiles in the short term. The results also reveal significant differences in how yield volatility affects companies with high and low leverage levels, and these effects vary across the sample countries. Overall, this research provides valuable insights into the influence of yield volatility on financial decision-making in different contexts and industries. The study's results underscore the imperative for policymakers and stakeholders in the energy industry to give precedence to improving risk management methods.

The State as a Financial Market Participant

High levels of public debt and chronic budget deficits force states to be constantly present on the financial market. This leads to the slow transformation from tax states into debt states. The change in the financial operating model generates new risks, the essence of which the literature has yet to fully identify. Increasingly, states are beginning to resemble intergenerational financial institutions, allocating funds from future generations to those currently living. The aim of this article is to identify the risks to socio-economic sustainability posed by the critical dependence of the state on market-based financing of its borrowing needs. This is a first step in the search for a new security architecture that better serves the idea of sustainable finance.

Trade Openness and Economic Growth: Evidence from Countries in Asia and the South Pacific

Abstract This study examines the relationship between trade openness and economic growth across selected Asian and South Pacific countries from 2000 to 2021. Key indicators on Gross Domestic Product (GDP) growth rate, foreign debt, export values, and inflation are analyzed for insights into economic dynamics. Positive correlations between foreign debt and export values suggest export utilization to alleviate debt. Conversely, negative correlations between inflation and export values underscore challenges during inflationary periods, emphasizing need for effective inflation management. Fixed Effects Model analysis unveils coefficients for independent variables, highlighting their impact on GDP. The study's explanatory power, measured by the R-squared value, underscores the collective influence of these variables on GDP variation. Policy implications stress the importance of export promotion strategies to bolster revenue amidst high foreign debt levels. Effective inflation management is vital to maintain export competitiveness. Prudent debt management emerges as crucial for economic stability. Future research should explore nuanced mechanisms linking trade openness and economic growth, tailored to each country's economic context. This approach can inform targeted policy recommendations, acknowledging diversity among nations. Globally, the study emphasizes interconnectedness among countries and the significance of collaborative efforts to navigate shared challenges and capitalize on mutual opportunities in the global economy. Keywords: Trade openness, Economic growth, Gross domestic product, Foreign debt, Fixed effects model.

Towards Achieving the Sustainable Development Goals (SDGs): The Impact of Debts on Income Inequality in Africa

The Agenda for Sustainable Development provides a framework for the creation of a better and sustainable future for all. The Sustainable Development Goals (SDGs) focus on addressing global challenges, including income inequality. Among others, the SDGs also commit countries to work towards reducing income inequality and as such, lowering income inequality is one of the key issues in Africa. However, given the high levels of debt on the continent, reducing income inequality could be a challenge. Majority of the literature examines the link between debts and economic growth with little attention paid to the impact of debts on income inequality. Moreover, not much is known on whether the relationship between debt and income inequality is non–linear. This study therefore contributes to the existing research efforts by investigating the threshold effects of debts using data from 24 African countries by relying on the sample splitting and threshold estimation approach. The results reveal that, while debts generally dampen income inequality, unbridled debt accumulation above the estimated thresholds does not decrease income inequality, indicating that the income inequality–reducing impact holds at lower levels of debt–to–GDP ratio. This evidence is insensitive to different indicators of income inequality and debts. Findings from this study show how increasing indebtedness contributes to widening income inequality in Africa.

The Influence of Company Size, Profitability, And Sales Growth on Capital Structure

This study investigates the impact of firm size, profitability, and sales growth on capital structure in the context of mining companies listed on the Indonesia Stock Exchange for the period of 2019-2022. The study aims to provide insights into the factors that influence the capital structure decisions of mining companies in Indonesia. The data used in this study is secondary data obtained from the official website of the Indonesia Stock Exchange, namely www.idx.co.id. The sample size for this research is 11 companies, selected using purposive sampling technique. The findings of the study reveal that firm size has a significant effect on capital structure, indicating that larger firms tend to have a higher level of debt in their capital structure. However, the study finds no significant relationship between profitability and sales growth with capital structure. These results suggest that mining companies in Indonesia may prioritize firm size when making capital structure decisions, while profitability and sales growth may not be significant factors in determining their capital structure. The implications of these findings are important for mining companies in Indonesia, as they provide insights into the factors that influence their capital structure decisions. By understanding the impact of firm size on capital structure, companies can make informed decisions about their debt financing and equity financing options. Additionally, the findings suggest that profitability and sales growth may not be significant factors in determining capital structure, which may help companies to focus on other factors when making capital structure decisions.

Survival dynamics of SMES supported by credit guarantee schemes: Insights from Morocco

The aim of this study is to assess the viability of SMEs that had benefited from bank loans backed by credit guarantee schemes. A quantitative approach has been adopted by the study. The sample comprised 398 Moroccan SMEs that had benefited from this type of financing, and the primary objective was to examine their survival over the ten years following the obtaining of these guarantees. Logistic regression was used to reflect several results. The results of the study highlight several factors influencing the probability of survival of these SMEs. Larger amounts of credit promote financial resilience and growth, thereby increasing the likelihood of business survival. Business profitability is a key factor in the likelihood of survival. Profitable businesses attract more investors and lenders, improving access to credit and increasing survival prospects. Contrary to some studies, high levels of debt do not appear to reduce the probability of survival. Similarly, repayment capacity showed no significant link with survival, suggesting the importance of other non-financial factors. Mature and well-considered management decision making is associated with a higher probability of survival. Well-thought-out decisions promote the long-term viability of businesses. Small SMEs also have a good chance of survival because of their rapid adaptability. A manager’s active participation in a company’s capital is linked to a higher probability of survival. This underlines the importance of the personal involvement of the manager and of solid governance.

COVID-19 effects and home-grown policy response in Sri Lanka

The paper examines the fascinating case of middle-income Sri Lanka with pre-existing macroeconomic weaknesses hit by COVID-19. The pandemic created a public health emergency and an economic crisis in 2020, causing economic damage and dampening Sri Lanka’s development prospects. The evidence shows a sudden growth contraction, a steep rise in poverty, falling women’s employment, worsening macroeconomic imbalances, and high external debt levels rising. Rather than requesting early IMF assistance for its balance of payments problems, President Gotabaya Rajapaksa’s government opted for home-grown remedies including ultra-loose monetary policy, import controls, bilateral swaps and loans, and a ban on fertilizer imports. The unconventional policy mix temporarily mitigated economic scaring from COVID-19 and supported the economy. But the distortions introduced by prolonging this unconventional mix and the Russia-Ukraine conflict shock pushed Sri Lankan economy into external debt default, a worsening economic crisis and Rajapaksa’s resignation in 2022.

IMPACT OF PRODUCTIVITY, CORRUPTION, AND GROWTH ON DEBT: EVIDENCE FROM PANEL DATA ANALYSIS

In a number of nations, the economic uncertainty that began several years ago has manifested its negative effects, and the COVID-19 crisis has exacerbated the situation. Many nations struggle to finance their social and economic public healthcare due to limited resources and fiscal space. In order to save their economies, this has pushed them towards high levels of debt. This study’s objective is to examine the effect of government debt on productivity, GDP growth, tax revenue, and corruption. Panel data analysis was used to identify the significant factors that affect government debt in 16 Western European countries based on their severe subprime crisis in 2008 and sovereign debt in 2009, which fall between the timeframes of this study. The findings revealed that government debt impacts productivity, GDP growth, and corruption. As a result, effective productivity control is critical when dealing with government debt. Efforts to develop world-class human capital, equipped with sophisticated skills or talent management, in order to increase a sector’s income and competitiveness should be aligned with efficient and effective public spending. Public projects must be thoroughly evaluated and monitored in terms of feasibility, economic and social returns. As a consequence, this study suggests that a profound and comprehensive reformation across various sectors in the country is required, particularly through productivity, growth, and corruption, in order to control a country’s debt.