This study draws on secondary empirical data (2017–2025) to explore financing preferences among MSMEs in Maharashtra, India's leading industrial state. It analyzes the dominance of internal funds and short-term debt, sectoral variations, and the impact of government schemes such as CGTMSE on formal credit access. Trends indicate 60–70% reliance on internal sources, with fintech and scheme-driven growth improving urban access by 15–25%. The paper discusses how balanced financing mixes reduce leverage risks while highlighting rural-urban and owner-demographic disparities. Recommendations include streamlined approvals and expanded fintech outreach to support sustainable growth in Maharashtra's diverse MSME ecosystem.

Background. Financial uncertainty and cash flow dynamics in healthcare facilities require an early warning system that can detect potential financial distress quickly and accurately. PBSC Clinic, as a healthcare institution, faces financial risks stemming from fluctuations in revenue, operating expenses, and short-term and long-term liabilities. Therefore, the development of the Real Time Clinic's Financial Crisis Early Warning System (RT, CFC, EWS) is important as a managerial decision-making tool based on actual financial data. Purpose. This study aims to analyze the financial condition of PBSC Clinic and to develop a CFC EWS RT based on profitability, liquidity, leverage, and distance-to-default indicators, presented in a real-time dashboard. Method. This type of research is an evaluative-descriptive study with a case study approach. The data used are the financial statements of the PBSC Clinic for the current period, which are analyzed using financial ratios and risk zone mapping (green, yellow, red) as early warning signals. Results. The results of the study show that the CFC EWS RT dashboard can represent the clinic's financial condition in an accurate and contextual manner. This system is effective at providing an early signal of declining profitability, liquidity pressures, and increased leverage risk, allowing management to take corrective action in a relatively short time. Conclusion. RT CFC EWS plays a strategic role in supporting the financial stability and sustainability of the PBSC Clinic. Implications. Practically, this research provides implementable guidance that can be directly used by the management of PBSC Clinics and similar health facilities. The CFC EWS RT Dashboard is capable of being a simple but effective daily monitoring tool.

This research examines how Good Corporate Governance (GCG) and capital structure affect company valuation, with dividend policy serving as a moderator, among LQ45 firms on the Indonesia Stock Exchange from 2022 to 2024. Employing a quantitative method, it utilizes secondary data from annual reports, encompassing 29 companies and 87 data points. Company value is gauged via Price to Book Value (PBV), while other factors rely on governance metrics and financial ratios. Findings indicate that GCG boosts company value, but capital structure harms it due to rising leverage risks. Dividend policy reinforces this dynamic and acts as a favorable cue to investors. These insights underscore the value of strong governance, careful capital management, and reliable dividend strategies in enhancing LQ45 firm valuations.

Abstract This study examines the dual-edged role of digital finance (DF) and regional innovation (RI) in shaping corporate excess leverage (CEL) within China’s swiftly evolving economic landscape. Drawing on a comprehensive panel dataset of 1200 firm-year observations from Chinese listed firms (2011–2020). Combining theories of optimal capital structure, credit market dynamics and systemic risk, we employ fixed effects, two-stage least squares, system GMM and quantile regression techniques. The findings reveal a nuanced paradox: while digital finance significantly expands credit access, it simultaneously exacerbates corporate leverage, challenging the narrative that technological innovations invariably democratize financial markets. Moreover, regional innovation, contrary to Schumpeterian expectations, fails to independently mitigate leverage risk without robust institutional frameworks, exposing systemic vulnerabilities in debt-driven ecosystems. Notably, our analysis reveals significant heterogeneity across ownership structures: state-owned enterprises (SOEs) exploit regional innovation for policy-driven objectives and escalate leverage, whereas private firms (POEs) face heightened risks from unregulated DF due to agency costs and weaker safeguards. The study advances existing theoretical perspectives by (1) bridging the credit expansion and financial constraint framework; (2) refining the resource-based review, highlighting that state-backed resources distort innovation‒leverage dynamics, amplifying financial instability in SOEs; and (3) extending agency theory to the financial ecosystem, where regulatory asymmetries and information gaps intensify managerial risk-taking. Practically, we propose adaptive policies: AI-driven surveillance in innovation hubs for real-time risk mitigation and institutional capacity-building in underdeveloped regions to balance financial inclusion with stability.

Liquidity, Credit and Leverage Risk as Determinants of Profitability: An Empirical Study of Pakistan s Commercial Banks

ABSTRACT This paper develops a DSGE model incorporating money supply, debt, and stylized monetary, macroprudential, and fiscal policies to explore how monetary and macroprudential policy stances shape fiscal effectiveness. Simulation results indicate three main insights. First, the joint-financed and debt-financed fiscal stimuli facilitate output growth, particularly under the high-public-debt scenario. By contrast, the money-financed stimulus can lead to economic recession and elevate bank leverage risks. Second, a stronger monetary policy that emphasizes inflation stabilization weakens fiscal effectiveness, while a stronger response to output reduces short-term effectiveness but improves long-term effectiveness. Third, under the debt-financed or joint-financed fiscal stimuli, a more aggressive macroprudential policy targeting total financing boosts short-term fiscal effectiveness but diminishes it in the long run. Additionally, a stronger response to risk spread enhances the effectiveness of a government spending expansion, whereas dampening that of a tax cut. Notably, macroprudential policy exhibits negligible effects on fiscal multipliers in the money-financing environment. Overall, these findings emphasize the critical role of policy interactions in determining fiscal effectiveness and demonstrate how these effects are contingent on both the fiscal financing approach and the level of government indebtedness.

Banks are vital suppliers of money-like safe assets, which they produce by issuing short-term liabilities and pledging collateral. But their ability to create safe assets varies over time as leverage constraints fluctuate. I write a simple model to describe private safe-asset production when intermediaries face leverage constraints. I directly measure leverage constraints using confidential supervisory data on high-frequency changes in the largest banks’ repurchase agreements (repos). The collateral spread—the maturity-matched yield spread between Treasuries used as repo collateral more often and Treasuries used less often—compensates for bank leverage risk and averages about 0.5 basis points, a sizable magnitude roughly equal to 60% of the five-year Treasury cheapest-to-deliver basis. This paper was accepted by Bo Becker, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.06104 .

The growing use of derivatives, including stock index futures and ETF options, has heightened focus on their effects in Chinas stock market. Thus, this study investigates the impacts of derivatives on Chinas stock market across five dimensions: market liquidity, pricing efficiency, volatility, investor structure, as well as regulatory challenges. Based on existing literature, relevant cases, and market data on Chinas derivatives and quantitative trading, the study focuses on the application and impact of stock index futures, ETF options, and quantitative strategies, while employing tools such as statistical arbitrage and implied volatility to evaluate price discovery efficiency, and using high-frequency trading data and institutional investor holdings to analyze market volatility and changes in investor structure. The results show that derivatives enhance market liquidity via risk hedging and speculative opportunities and boost price discovery through statistical arbitrage and implied volatility, aligning stock prices with fundamentals. Under some conditions, they can amplify volatility, cause herding in similar quantitative strategies, and raise systemic risk with leverage and HFT. Besides, broad participation by derivatives and institutional investors drives market institutionalization, enhancing stability and efficiency, while posing regulatory challenges such as manipulation, data fairness, and leverage risks. As such, China has addressed these via intelligent surveillance, classified data management, and leverage stress testing, thereny maintaining market stability while supporting innovation.

This research extends auditor industry specialization literature into the settings of an integrated audit of control audit-arm (CA) and financial audit-arm (FA) by creating an aggregate, four-dimensional specialization construct that encompasses the four established dimensions (industry knowledge, economies of scale, auditor size, and tenure). Four-dimensional specialists vary in their approach to performing direct effects (testing controls; testing accounts) and indirect effects (tracing risks interactively between audit-arms) and achieve varied equilibriums. Empirical analyses support that CA’s direct effect, CA’s indirect effect, FA’s direct effect, and FA’s indirect effect contribute 45-15-35-5 (44-24-26-6) percent, respectively, to the baseline-effectiveness (full-effectiveness) equilibrium. The 15-to-24 (35-to-26) percent increase (decrease) in CA’s indirect effect (FA’s direct effect) suggests that the four-dimensional specialists in the full-effectiveness equilibrium leverage risk tracing (eliminate substantive procedures) concurrently by nine percent. Accordingly, adopting the risk-based approach constitutes the fifth dimension that discerns the “specialists” who cannot achieve full effectiveness, let alone efficiency.

ABSTRACTThis study examines the impact of Corporate Leverage Regulation (CLR) on corporate innovation. Innovation is key to firm performance and sustainable competitiveness, which may be affected by a firm's financial risk, and deleveraging is an essential measure to mitigate corporate financial risk. Taking advantage of the quasi‐natural experiment of CLR in China, which requires over‐indebted state‐owned companies to reduce their debt ratio, we examine the effects of the reduction in financial leverage on corporate innovation. We find that firms are more likely to enhance their innovation efficiency after CLR, which has a significant increase in corporate innovation outputs, while no significant increase in innovation inputs, and this increase is more pronounced for firms with a higher proportion of institutional investors, a lower degree of digital transformation, and less media attention. These findings suggest that appropriate government guidance and intervention to reduce excessive financial leverage risk is helpful for corporations to maintain sustainable growth and stay competitive in their industry. We also document that managerial myopia reduction, resource allocation efficiency improvement, and accounting information quality enhancement are the channels through which CLR affects firm innovation. Furthermore, we find that CLR significantly increases the value of firms. Taken together, our results suggest that a decrease in leverage has a causal effect on firms' innovation efficiency.

Margin trading has emerged as a pivotal mechanism for financial leverage in India’s capital markets, especially in the post-2020 era shaped by digital trading platforms and increased retail investor participation. This paper examines the conceptual foundations, operational architecture, and regulatory contours of margin trading in the Indian equity market, based on data up to 2023. The study investigates how liquidity-constrained retail investors utilize Margin Trading Facilities (MTF) to amplify market exposure, capitalize on short-term volatility, and engage in delivery-based strategies. Framing the analysis within principles of compounding and leverage, it explores the growing role of brokers, clearing corporations, and regulators, particularly SEBI, in enabling and monitoring leveraged transactions. Core operational elements, including Value at Risk (VaR) margin, Extreme Loss Margin (ELM), Mark-to-Market (MTM) settlement, and the Peak Margin framework, are evaluated. Through regulatory circulars, broker disclosures, and empirical market data, the study uncovers disparities in pledge workflows, interest charges, and client communication practices. Behavioral dimensions, such as investor overconfidence, herd instincts, and risk underestimation, are also critically examined. While SEBI’s reforms, notably the margin pledge mechanism and T+1 settlement cycle, have enhanced transparency and curtailed misuse of client assets, challenges persist in uniform implementation and enforcement. Retail margin exposure has seen institutionalized growth, with leveraged positions estimated at ₹75,000–₹85,000 crore by 2024. This expansion raises red flags around systemic overleveraging, forced liquidations, and investor safety during periods of elevated volatility. The paper concludes with tiered recommendations: regulatory interventions for standardized disclosures and surveillance; broker-level advancements in margin reporting and product design; and targeted investor education on leverage risks and behavioral biases. It also outlines future research avenues, including AI-driven margin risk assessment and the implications of T+0 settlement on leverage dynamics. By integrating operational, behavioral, and regulatory perspectives, this study aims to foster a more resilient and risk-aware margin trading ecosystem in India’s evolving capital markets.

Financial inclusion of firms is crucial to create jobs, boost economic growth, and promote sustainable development. The study examines how financial inclusion affects enterprise export performance based on access to finance ratios. The study analyses the effects of firms’ financial inclusion determinants and macro environment factors on firms’ export values. The data comes from Pakistan’s manufacturing sector covering 400 firms listed on Pakistan Stock Exchange from 1999-2021. Driven by the nature of the data, the Method of Moment Quantile Regression is employed to assess the below and above mean regression estimations, and a two-step system GMM approach is used to address endogeneity concerns. The results of the study are robust against different specifications. The study reveals that assets positively impact a firm’s export performance, emphasising the importance of asset investment for foreign market competition. Asset tangibility negatively impacts export performance, except for low-gearing corporations, and fixed assets dominate. A balanced asset mix is crucial for improving exports. Debt-to-equity ratios, except for high-gearing firms, boost export performance, but domestic firms with high leverage ratios are more likely to fail. To avoid excessive leverage risks, firms must balance debt and equity. Diversifying the asset mix to include liquid and intellectual property can boost export success. Gearing affects export performance differently depending on a firm’s debt levels. Low-geared enterprises can leverage assets and debt to boost exports, while high-geared enterprises may be financially constrained and face challenges from excessive debt. Therefore, enterprises must carefully examine their gearing levels and make informed decisions on optimising their asset composition for optimal export performance. The study also opens up the possibility of further research on the role of exchange rates and firms’ investment in line with export performance.

The COVID-19 pandemic has significantly impacted financial stability across industries, including the aviation sector. PT Angkasa Pura I (Persero) and PT Angkasa Pura II (Persero) have faced increased debt levels, necessitating an analysis of leverage risk in their financial performance. This study aims to assess the companies' leverage conditions and identify potential risk mitigation strategies using Debt to Asset Ratio (DAR) and Debt to Equity Ratio (DER) as analytical tools. A qualitative descriptive approach is employed, utilizing secondary data from 2017 to 2020. The analysis focuses on examining financial reports and relevant literature to understand the extent of leverage risk and its implications. The findings indicate that both companies exhibit high debt levels, placing them in an unhealthy financial state. This condition could lead to financial distress, limiting operational flexibility and increasing vulnerability to external economic shocks. Furthermore, the results suggest that excessive leverage poses significant risks, making it difficult for the companies to secure further funding from creditors or attract potential investors. To mitigate this issue, it is recommended that PT Angkasa Pura I and PT Angkasa Pura II explore alternative financial sources, such as increased equity financing through shareholders and investors or issuing new shares. Additionally, restructuring existing debt and optimizing cost management strategies could help improve financial resilience. This study highlights the critical need for effective debt management strategies to enhance financial sustainability and investor confidence. The insights from this research contribute to the broader understanding of leverage risk management in the aviation sector, especially in times of economic downturns and global crises.

Leverage risk and REIT returns

This study assesses the impact of risk management on the financial performance of listed financial service firms in Nigeria. The study aimed to measure the relationship between credit risk, market risk, financial leverage risk management and financial performance of listed financial service firms in Nigeria, as measured by ROA and ROE. The study employed Secondary data, which collected from audited annual reports of 15 listed financial service firms in Nigeria, for the period 2013-2022. Descriptive statistics were used to analyze the data. The study revealed that credit risk management has a significant effect on both ROA and ROE, while market risk management has a significant effect on both ROA and ROE. Financial leverage risk management has a significant effect on ROA but a more significant effect on ROE. Effective Risk management has significant effect on ROA and ROE, and financial service firms should implement effective risk management strategies to maximize ROA and ROE. The study recommended that risk management practices should be taken into account when evaluating the financial performance of listed financial service firms. Financial service firms should also consider implementing comprehensive risk management strategies that address credit, market, and financial leverage risk. Investors should evaluate the risk management practices of financial service firms in addition to traditional financial performance measures such as ROA and ROE.

Aim:This study aims to assess the effect of risk management practices on organizational performance in the banking sector, with a special focus on institutions operating in the Delhi NCR region. It examines how various dimensions of risk—business risk, liquidity risk, financial leverage, and organizational characteristics such as size and age—impact key performance indicators like Return on Assets (ROA) and Return on Equity (ROE). Methodology:The research adopts a quantitative, cross-sectional design using primary data collected from 410 banking professionals across public and private sector banks in Delhi NCR. A structured questionnaire based on a 5-point Likert scale was used to capture responses related to risk dimensions and organizational performance. Statistical Methods: Data analysis was conducted using IBM SPSS software. Descriptive statistics, reliability analysis (Cronbach’s Alpha), normality tests (Shapiro-Wilk, skewness, kurtosis), Pearson correlation, and multiple linear regression were employed to validate the model and test the proposed hypotheses. Results:The findings revealed that leverage risk and organizational size & age have a significant positive impact on organizational performance, whereas business risk (variability in asset returns) and liquidity risk exert a negative influence. All null hypotheses were rejected, and the model demonstrated exceptionally high explanatory power (R² = 1.000), indicating a strong relationship between risk management and performance in the studied banks. Originality/Value:This study provides a comprehensive, multi-dimensional view of risk management in the Indian banking sector, especially within a high-growth region like Delhi NCR. It is one of the few studies to integrate multiple risk factors and organizational traits in assessing performance, offering valuable insights for bank managers, policymakers, and financial analysts. The empirical evidence enhances current literature and supports the formulation of risk-sensitive strategies for sustainable banking operations.

The study proposed a framework on the moderating effect of inflationary trend on the relationship between financial risk and the financial performance of Nigeria listed deposit money banks. Literature has shown that financial risk parameters are very essential factors that adversely affect corporate firm financial performance. However, the main objective of this study is to propose a framework on the moderating effect of inflationary trends on the relationship between financial risk variables and financial performance of listed deposit money banks in Nigeria. The independent variable used in this study is financial risk proxy by credit risk, liquidity risk, market risk, operational risk and leverage risk. The moderating variable is inflationary trend measured as ratio of consumer price index (CPI) calculated as annual percentage changes in inflation rate and the dependent variable is financial performance measured by return on assets (ROA) and Tobin’s q. Therefore, based on the reviewed literatures a moderator is introduced to propose a framework for the study resulting from inconsistency in findings of previous studies. The study proposed capital asset pricing model as underpinning theory. As such, the study recommended for empirical investigation on the proposed research framework.

This study investigates the determinants of financial performance in Indonesian Microfinance Institutions (MFIs), analyzing financial and social factors alongside the impacts of COVID-19. Using panel data from 242 OJK-regulated MFIs from 2018 to 2023 (1,452 observations), fixed-effects regression reveals that the Debt-to-Equity Ratio (DER), Women’s Empowerment Index (WEI), and Microcredit Proportion (PMC) negatively affect Return on Assets (ROA), while Firm Size (SIZE) and Loan-to-Deposit Ratio (LDR) show positive effects. Service Accessibility (ACCES) proves to be insignificant. The findings highlight a critical trade-off: while MFIs’ social missions such as women’s empowerment and microcredit expansion depress profitability, operational scale and liquidity management enhance performance. The pandemic exacerbated these tensions, particularly in under-supported empowerment programs. This study contributes to the microfinance literature by empirically validating capital structure and social performance theories in Indonesia’s unique context. Practical implications suggest optimizing capital structures to reduce leverage risks, balancing microcredit portfolios with larger loans, and integrating digital tools to improve efficiency. For policymakers, these insights underscore the need for regulations harmonizing financial sustainability with inclusive development goals. By bridging empirical gaps, this research offers a framework for MFIs navigating post-pandemic recovery while maintaining their dual social–financial mission.

The evaluation of marine environmental concealment is crucial for underwater activities. Traditional assessment methods do not fully leverage risk indicators and expert experience. To address this, this paper proposes a marine environmental concealment assessment model based on a 2-additive piecewise linear Choquet integral. This model combines the fuzzy measure to aggregate the utility values of various environmental indicators, integrating both expert opinions and objective data, while also considering the nonlinear interactions between indicators. Verification using real ocean data and expert preferences shows that the depth of the ocean grid and seabed terrain have the most significant impact on concealment, while the interaction between temperature gradient, salinity gradient, and ocean current is positively correlated. This model offers a theoretical contribution to marine environmental concealment assessment and demonstrates the advantages of the Choquet integral method in handling complex, multi-factor risk evaluations, with significant practical application value.

Based on the risk-return tradeoff theory, this quantitative study examined the effect of financial risk on the sustainability of insurance companies in Nigeria. Insurance is a pool of risk. Information was taken from the 2012–2021 annual reports of ten selected companies. Liquidity risk, solvency risk, and leverage risk are the three proxies for financial risk, which is the independent variable. Return on equity serves as a proxy for sustainability, which is the dependent variable. Firm size, tangibility, contingency fund, and industry intrinsic factor are the control variables. The study found that, during the studied period, solvency risk significantly increased the sustainability of the sampled insurance companies, while liquidity and leverage risks significantly decreased their sustainability. While the intrinsic value of the insurance industry has a significant negative impact on sustainability, the size and tangible nature of insurance companies have a significant positive impact. The sustainability of the examined insurance companies is not significantly improved by contingency funds. Given that the three financial risk proxies have a substantial impact on return on equity (a measure of sustainability), the applicability of risk-return tradeoff theory in this study is evident. Operationally, insurance companies should monitor their liquidity and leverage risks as because they reduce sustainability. The study recommends (among others) that Insurance firms should continue to optimally increase their size and tangibility in order to increase their sustainability.