Leverage Factors Research Articles

The Leverage Factor: Credit Cycles and Asset Returns

Research has found strong links between past credit booms and adverse outcomes for macroeconomic aggregates like output and investment. However, are price impacts also seen more widely in broad asset classes such as equity and fixed-income markets? We document such a robust and significant connection using a large sample of historical data for many advanced countries since 1870. Credit boom periods with a high “leverage factor” tend to be predictably followed by unusually low returns to risky equities, in absolute terms and relative to a safe fixed-income portfolio. Fixed income is a safe haven at these times and has slightly higher than normal returns. We show these properties hold in-sample and out-of-sample. Return predictability because of the leverage factor is distinct from that because of momentum (lagged return) and value (cashflow relative to price). Trading strategies built on the leverage factor accrue meaningful excess profits out-of-sample. This paper was accepted by Victoria Ivashina, finance.

Does Corporate Governance Support Tax Avoidance Practice in Indonesia?

Tax avoidance is an action taken by company management so that corporate tax payments are smaller than they should be. The practice of tax avoidance often occurs in companies in Indonesia related to the tax rate for business entities which is considered too high. This study was conducted to establish if the factors of corporate governance, sales growth and leverage have an impact on the practice of tax avoidance. Corporate governance in this study is divided into five, namely independent board of commissioners, institutional ownership, managerial ownership, audit committee, and audit quality. The sample in this study is mining companies listed on the Indonesia Stock Exchange. The method used to take the sample was purposive sampling. This study used multiple linear regression. The results showed that independent board of commissioners, institutional ownership, audit quality, sales growth, and leverage had no effect on tax avoidance, whereas managerial ownership and audit committee had a positive effect on tax avoidance. This shows the impasse of corporate governance in preventing tax avoidance and even the audit committee actually encourages tax avoidance. The implication of this research is that it is very important to have strict supervision of mining companies in Indonesia in respect of tax avoidance practices by relevant agencies such as the tax office so that it has an impact on the need for technical skills for tax officers to detect tax evasion by companies.

The commercial bank leverage factor in U.S. asset prices

I present novel results on a commercial bank leverage factor that drives U.S. asset prices. Portfolios which load negatively on this risk factor and are comprised of firms that are less resilient in credit expansions earn higher returns on average. In the time-series, a simple buy-and-hold strategy of the market index at medium- and long-horizons illustrates how investors can profit on the commercial bank loan cycle and earn higher returns and Sharpe ratios in recoveries and early stages of an expansion as opposed to credit booms.

Business roadmap for the European Union in the NewSpace ecosystem: a case study for access to space

A business roadmap is a high-level strategic management tool that maps the actions to develop new industries. It serves as a guide to plan and forecast technological, market and product developments in a more operational way. Precisely, the business roadmap of this article highlights the main actions to be taken by the European Union (EU) space ecosystem with regards to Low Earth Orbit (LEO)—orbits from 450 to 2000 km—and Very Low Earth Orbit (VLEO)—orbits from 150 to 450 km. On the one hand, it is necessary to (1) develop industrial and technological space capabilities, (2) continue investing public funds in European Programs to develop new vehicle concepts of access to space, (3) improve testing, demonstration and exploration for faster the Technology Readiness Level (TRL) development, (4) promote an entrepreneurial and risk-taking culture, and (5) leverage the private investment to boost the development of advanced access to space technologies, attract talent, promote collaboration between public and private companies, and finance NewSpace Small–Medium sized Enterprises (SMEs). On the other hand, it should also strengthen its relationship with the European Space Agency (ESA) to foster its space capabilities and become a competitive player in the access to space market in the medium term (5–10 years). The implementation of these actions will help the EU to improve its international positioning, and adapt the technology to the needs and requirements of NewSpace demand, mobilizing around €40,500 million euros for the EU economy during the first 10–15 years of operations with an average Leverage Factor (LF) of 4.

Leverage Factors Affecting the Sustainability of Seaweed Agro-industry Development in Central Sulawesi, Indonesia

There has been a decline in seaweed prices in Central Sulawesi in the last five years, particularly in the processing and marketing sub-systems. The processing problems have constrained the volume of market demand. In contrast, marketing problems have disturbed the fulfillment of industrial and consumer demand for raw materials, thereby declining economic activity and profit. This research aimed to examine the leverage factors affecting the sustainability of the seaweed agro-industry integrated between sub-systems in Central Sulawesi Province. The collected numerical and non-numerical data were analyzed using the multidimensional scaling approach of the RAP-Seaweed technique. The results revealed that social conflict, labor absorption, the low value-added of the seaweed processing, and the high cost of raw material procurement caused the unsustainable development of the seaweed agro-industry. Therefore, government policies are required to facilitate investment in the seaweed industry, supported by enhancing the quality of transportation infrastructure, the use of local workers, and the security stability of the local area

Financial Crisis and Leverage Determinants : A Juxtaposition of Pre and Post-Crisis Periods Using HLM

The present study examined the direct and indirect influences of firm-level and industry-level determinants on capital structure for all BSE-listed firms in India. The study analyzed financial data from 2000 – 2019 and employed the hierarchical linear modeling technique of regression as firms are a subset of industries. The output demonstrated that a few capital structure determinants either did not have any impact or had the same effect in both pre and post-crisis periods. However, a few determinants such as short-term liquidity, firm profitability, and Z - score had a conflicting impact on leverage in the two time periods. Determinants such as median industry tangibility, median industry leverage, industry munificence, industry liquidity, and industry dynamism had a significant impact in one period and an insignificant impact in another period. This showed that the direct effect of capital structure determinants changed when equity market and credit supply conditions varied. We showed that industry-level factors moderated the relationship between leverage and firm-level factors. Further, it was exhibited how economic conditions affected not just the direct influences of firm and industry level factors but also the indirect influences of industry-level factors. The results of the present study highlighted the complexity of corporate leverage decisions by exhibiting how changes in economic conditions and industry characteristics led to changes in leverage levels.

Business Process Improvement for Sustainable Technologies Investments in Construction: A Configurational Approach

Given the importance of investments in business process improvements for sustainable technologies, many industry sectors are forced to examine and balance new investments with long-term economic viability. There are disputes with regard to the value of investments, particularly within the construction sector, which is characterized by poor capitalization, over-leveraged firms, and high risks, often coupled with business cycles or boom and bust periods. Understanding when construction firms should engage in business process improvements with sustainable technologies is not clear due to the risks and investment costs. To address this problem, the study takes a configurational approach to examine the factors of leverage and use of capital to examine their impact on firm performance with qualitative comparative analysis (QCA). We show distinct configurational outcomes that are associated with superior success, giving construction firms viable pathways to evaluate potential investments in sustainable technologies. Specifically, one configuration, focusing on incremental innovations, consistently produces positive firm performance. Two configurations that lead to the absence of performance are associated with radical innovations in firms that struggle to manage their working capital.

Efek Good Corporate Governance Dan Rasio Keuangan Terhadap Pengungkapan Enterprise Risk Management

The purpose of this study is to clarify how good corporate governance and financial ratios affect a company's risk management. Data and information on ERM, obtained from annual reports, management reports and annual corporate governance. The purposive examining method turned into applied in determining the take a look at gotten through 34 groups from fifty seven basis department groups recorded at the Indonesia Stock Exchange with six years of remark from 2015 to 2020, in order that 204 look at take a look at had been gotten. The findings of this look at found out that Good Corporate Governance, particularly the Independent Board of Commissioners, Audit Committee, Risk Management Committee, and Leverage, had no giant effect at the Company`s Risk Management, while Profitability had a giant high quality effect at the ranges of company threat control in infrastructure groups indexed at the Stock Exchange. Indonesian Securities for the 2015-2020 period. However, as a whole, the ERM chart for the 2015-2020 period, when companies participate in the Enterprise Risk Management Index, combines the presence of independent, audit and risk Management committees, leverage and profitability factors. Affects the index. Measures infrastructure companies listed on the Indonesia Stock Exchange. Another result of this study is that the most common type of risk is financial risk.

The Role of Profitability in Moderating the Influence of Liquidity and Leverage on Audit Opinion

The auditor issued an audit opinion to determine the risk of uncertainty regarding the condition of the company to continue operating where COVID-19 is spreading rapidly. This research aims to look at the influence of liquidity and leverage on audit opinion in the consumer goods sector listed on the Indonesia Stock Exchange in 2020, with profitability as a moderation variable. The research model uses a causal-comparative design and binary logistic regression analysis with secondary data types. 188 consumer goods sector companies listed on the Indonesia Stock Exchange, in 2020, met the criteria for being the research sample. The results of the study showed that liquidity and leverage simultaneously affect audit opinion. Partially, liquidity has no influence on audit opinion, while leverage partially affects audit opinion. Profitability as moderation is able to strengthen the influence of liquidity on opinions but is not able to moderate the influence of leverage on audit opinions. The limitation in this study is that it only selects the company’s internal factors. Further researchers are expected to consider other free variables such as auditor turnover, and opinions submitted by auditors in the previous period, as well as using other sectors such as the real estate property sector. The leverage factor can be used as reference data for auditors to see how the company is able to maintain the condition of the company to avoid bankruptcy in the pandemic.

Dynamic Modeling and Flexibility Analysis of an Integrated Electrical and Thermal Energy System With the Heat Pump–Thermal Storage

The integration of high-efficiency heat pump and thermal storage devices is of great significance to realize the synergy between efficient and flexible operation of the integrated electric and thermal energy systems. This article proposed an integrated electric–thermal energy system with heat pump and thermal storage devices and introduced the heat current method for constructing its overall dynamic power flow model by considering energy transfer, conversion, and storage processes. On this basis, we derived the overall system constraint and component constraint equations. Under the objective of wind power curtailment minimization, the comprehensive effects of the dynamic characteristics of the heat pump, thermal storage capacity, new wind power installation, and new heat load on the electric and thermal output are analyzed. The results show that the dispatching accuracy of wind power output can be improved by up to 8% by taking into account the dynamic characteristics of the heat pump. The combination of heat pump and thermal storage device results in a leverage factor of 3.06 and 0.17 for the storage and release processes, respectively, effectively increasing the flexibility of system scheduling. The coordination between the newly added wind power installation and the added new heat load, with the higher operating temperature of the heat pump, is more conducive to promote wind power accommodation and improve the system’s overall flexibility. These results provide the necessary basis for the development of an integrated dispatch plan for the integrated electric and thermal energy systems containing the heat pump–thermal storage.

KOMPENSASI MANAJEMEN, REPUTASI AUDITOR,PROFITABILITAS,LEVERAGE, FASILITAS PAJAK DAN MANAJEMEN PAJAK

This study expects to examine the impact of the management compensation, auditor reputation, profitability, leverage, and tax facilities on tax management. The populace in this study is manufacturing companies recorded on the Indonesia stock trade for the 2017-2019 period. The sample testing procedure utilized the purposive sampling method. Manufacture companies recorded on the IDX in 2017-2019 totaled 182 companies. There are 60 companies that are included in the sampling criteria with a perception time of 3 years for a sample of 180 manufacturing companies. The scientific technique used is multiple regression using SPSS version 25.0. From the consequences of the test that have been done, the partial regression test ( t-test) shows that compensation management and profitability have a critical adverse consequence on tax management. Auditor reputation variable and tax facilities significantly affect tax management. And leverage factor has no impact on tax management.

Factors Related Tax Avoidance on Food and Beverage Manufacturing Companies Listed in Indonesia Stock Exchange Period 2017-2020

Tax avoidance is an effort to reduce the burden of taxes paid but is carried out legally and ethically, and does not conflict with the applicable tax rules. This study aims to determine the factors that influence tax avoidance, with a focus on analyzing the variables of leverage, profitability, and capital intensity. The design of this research is analytic observational. The research subjects are manufacturing companies in the food and beverage sector which are listed on the Indonesia Stock Exchange in 2017-2020. There were 11 companies that meet the sample criteria. The results of the analysis show that the mean + SD on the tax avoidance variable is 0.887+1.973. The mean + SD on the leverage variable is 0.498+0.622, the profitability variable is 0.913+2.781, and the capital intensity variable is 0.729+ 0.794. In conclusion, the factors of leverage, profitability, and capital intensity have no effect on tax avoidance in food and beverage manufacturing companies on the Indonesia Stock Exchange in 2017-2020.

Sustainable Consumption Practices – A Leveraging Factor of Atmanirbhar Bharat

This study applies the theory of consumption value perceptions to adjudicate the influence of such values on sustainable consumption decisions which is gradually becoming an indispensable measure for creation of a sustainable economy. The study aims to ascertain the urgency of green consumerism towards deployment of green management practice, an indispensable tool to make Sustainable ‘Atmanirbhar’ India. The deleterious impact of unsustainable consumption on environment has been a matter of painstaking concern and to supersede such predicament the need to assess the impact of economic variables assessing the role of consumption on environment needs contemplation. The study thus tries to adopt a modelling framework to assess the impact of consumption value perceptions as major predictor variables on adoption of sustainable consumption practices which shall eventually lead to the transition of sustainable lifestyle practices in an emerging economy.

Pengaruh Profitabilitas, Likuiditas, Leverage, dan Ukuran Perusahaan terhadap Kebijakan Dividen

This study is intended to determine the effect of the independent variable (X), namely: Profitability, Liquidity, Leverage, and Company Size on Dividend Policy in the study of companies in the Consumer Goods Industry sector. The research method in this test uses quantitative descriptive and the data used is secondary data from official sources. The population in this study were all companies in the Consumer Goods Industry sector, totaling 60 companies. The sampling technique in this study was using purposive sampling by taking into account certain conditions that had been agreed upon so that the authors decided to use 10 companies as samples in this test. The data obtained with the observation time of 5 years is 50 data. The source of data in this study is secondary data. Test the quality of the data using Descriptive Analysis Techniques, Classical Assumption Test, and Multiple Linear Analysis. The data analysis technique in this test uses the t statistic test, f statistic test, and the coefficient of determination (Adjust R2). The partial test results in this test show that profitability and liquidity have a positive effect on Dividend Policy, while Leverage and Firm Size have a negative effect on Dividend Policy. Simultaneous test results show that the free factors of Profitability, Liquidity, Leverage, and Company Size also have a positive and significant effect on Dividend Policy in the Consumer Goods Industry sector on the IDX for the 2016-2020 period.
 Keywords: Profitability, Liquidity, Leverage, Firm Size, Dividend Policy

Risk Committee Effectiveness and Financial Performance Indicator of Quoted Firms in Selected African Countries

The rise in contemporary risk and the resultant corporate failures has necessitated the need for the required attributes of risk committee that would minimize risk of firms. To this end, this study was set to find out the effect of risk committee effectiveness (RCE) on financial successes of quoted banks in selected three African countries. The study spanned from 2009 to 2018. The study focused specifically on risk committee diligence, committee composition, committee diversity, committee expertise, committee size and return on equity (ROE) of the countries selected from Africa namely Nigeria, South Africa and Ghana. More so, we controlled for financial leverage. Ex post facto research design was adopted for the study and panel data in relation to the study were sourced from the annual reports of the chosen banks in the selected countries. The study patterned after the fixed effect model (FEM) since the Hausman test supports the FEM. The FEM reported that the effect of RCE diligence and RCE compositions on bank performance in Nigeria, South Africa and Ghana is highly significant statistically at 5% level. Hence, the study concludes that RCE vis-à-vis risk committee diligence, committee compositions and leverage factors should be pivotal to the formulation of risk management committee of organisations.

ANALISIS STATUS KEBERLANJUTAN KAKAO (Theobroma cacao L) DI KABUPATEN BANTAENG

Cocoa cultivation business that still has great potential in the future. The problem faced by farmers in cocoa cultivation is that farmers are still lacking in implementing post-harvest management that can provide added value and competitiveness of cocoa quality in the market. This study aimed to 1) analyze the status of cocoa sustainability in Gantarangkeke sub-regency, Bantaeng Regency; 2) analysing the sensitive leverage to the sustainability of cocoa in the Gantarangkeke sub-district. Based on the results of the analysis of the social and cultural dimension index value of 55.19 percent and infrastructure and technology of 51.66 with the category of quite sustainable. While the ecological dimension is 46.68 percent, economy 36.69 percent and legal and institutional 27.45 percent with the category of less sustainable. The results of the analysis of leverage factor, there are fourteen sensitive attributes that affect the sustainability of cocoa in Gantarangkeke sub-district, Bantaeng district. Improvement of attributes, especially sensitive attributes, can improve the cocoa sustainability index.

Assessing the sustainability status of mangrove forest ecosystem management by coastal community in Jaring Halus Village, North Sumatra, Indonesia

Abstract. Sahputra E, Harahap RH, Wahyuningsih H, Utomo B. 2021. Assessing the sustainability status of mangrove forest ecosystem management by coastal community in Jaring Halus Village, North Sumatra, Indonesia. Biodiversitas 22: 1-9. Mangrove forest ecosystems provide various important ecological (physical and protection) and economic services. Mangrove forest needs to be sustainably managed to ensure their functions and benefits are available in perpetuity. Still, issues regarding sustainable management of mangrove forests are rarely discussed, especially in Indonesia. This research aims: (i) to gain the fundamental understanding of the level of sustainable mangrove management by determining indicator attributes that can be categorized as leverage factors; ii) obtain the perceptions of coastal communities in mangrove forest management; and iii) investigate the compliance of coastal communities in mangrove forest management. Data were obtained through a series of interviews, field observation and focused group discussion (FGD) and questionnaires conducted from January 2018 to March 2019 in Jaring Halus Village, Secanggang Subdistrict, Langkat District, North Sumatra, Indonesia. Data were analyzed using multidimensional scaling (MDS). The results showed that the status of mangrove forest management in Jaring Halus Village was categorized as moderately sustainable with a score of 65.83%. The majority of the coastal community (96% of respondents) perceived and understood the value of protecting the mangrove ecosystem, which provided physical (ecological), economic, and social functions. The community's understanding and knowledge of the importance of mangrove forests is due to the high level of dependency on their main livelihood as fishermen. Around 97% of the respondents held strong obedience to the mangrove forest management in Jaring Halus Village, which could be attributed to local wisdom related to natural resource management.

Soil freezing-thawing induces immediate shifts in microbial and resource stoichiometry in Luvisol soils along a postmining agricultural chronosequence in Western Germany

Freeze-thaw (FT) events exert a great physiological stress on soil microorganisms and hence impact biogeochemical processes in soils. As numerous environmental factors affect microbial and chemical responses to FT, a better understanding of the leverage factors that regulate the responses to FT events is required. To date, FT-induced shifts and transformations in microbial and resource stoichiometry have received particularly little attention. We exposed fifteen Luvisol soils with different time after restoration and corresponding differences in soil organic C contents from a postmining agricultural chronosequence to a single FT event and analysed changes in soil chemistry and microbial stoichiometry one hour and eighteen hours after thawing. FT considerably altered soil biochemical attributes within the first hours of thawing. Microbial biomass C declined substantially after FT, and its relative losses were positively correlated with enhanced dissolved organic C contents. Thus, microbial cell lysis likely led to the significant increase of dissolved organic C. Moreover, microbial biomass C losses were disproportionally higher in C-rich soils, suggesting that soil microorganisms in high-C soils might be particularly prone to FT stress. Microbial biomass N marginally decreased one hour after thawing, yet returned to initial levels eighteen hours after thawing. The alternating responses of microbial biomass C and N caused a strong stoichiometric reduction of the microbial C:N ratio. The resulting microbial oversaturation with N relative to C is likely the first step in the chain of processes that generally lead to the high N losses commonly recorded in agricultural soils in the aftermath of FT events. Metabolic activity of the soil microbial community increased with the relative decline of the microbial biomass C:N ratio eighteen hours after thawing, suggesting increased levels of microbial metabolic expenditure due to stoichiometric shifts. The strength of the FT-driven biochemical responses was strongly dependent on soil organic C content, indicating that high-C soils might be especially vulnerable to initial C and N losses due to shifts in microbial stoichiometry.

Strategies for sustainable corn production: a case of South Lampung District, Lampung Province, Indonesia

Demand for corn has been increasing from time to time. However, efforts to increase its production face multidimensional challenges and problems. This study aims to assess sustainability status, analyze leverage and prospective factors, and formulate follow-up strategies for sustainable corn production. Data used primarily were data collected through online focus group discussions and interviews with various related agencies and key informants at provincial and district levels. This study was conducted between May and October 2020 in South Lampung District. Multidimensional Scaling (MDS) and Matrix of Cross Impact Multiplications Applied to Classification (MICMAC) were used to assess the sustainability status and analyze leverage and prospective factors. Then, the Multicriteria Policy (MULTIPOL) was used to formulate the follow-up strategies. The results show that the corn production in South Lampung District is classified as less sustainable, with a sustainability index of 49.30. The sustainability of corn production is influenced by ten leverage attributes, four of which are prospective factors, namely corn prices at the farmer level, the number of water pumps, the use of natural pesticides and fertilizers, and the number of corn shellers. The strategies for sustainable corn production could be carried out by by applying reference purchase prices effectively, strengthening farmer partnerships with the feed industry, supporting environmentally friendly corn farming, and optimization and effective use of pre-harvest and post-harvest machinery. It is necessary to evaluate the effectiveness of various assistance and policies implemented at this time to improve the implementation of programs/policies in the future.

Factors affecting sustainability of agricultural machinery assistance program

One of the Ministry of Agriculture’s efforts to support agricultural development is by providing equipment and machinery assistance. There are many multi-dimensional problems, both technical, socio-cultural, economic, and environmental. This study aimed to analyze the sustainability status of the agricultural equipment and machinery assistance program. This research was conducted in 2020 with the object of the two-wheeled tractor and four-wheeled tractor assistance program in 2018-2019. Research location covers six districts, the selection of site determined by the provinces considered the most successful and the least successful in realizing activities. The sustainability status of the activity program was analyzed using Multidimensional Scale Analysis. The collected data and information through structured questionnaires from 47 institutional respondents and literature studies, both printed and electronic. The results showed that agricultural equipment and machinery assistance program (TR2 and TR4) was less sustainable. The comparison of the MDS value and Monte Carlo’s analysis was 49.93, with an R2 value of 89%. The S-Stress statistical test is still relatively high, namely 0.30 (above 0.25), which means improvements and refinement needs from the implementation aspect. Improvements from various elements are divides into two groups. First, leverage factors that encourage the sustainability and success of the implementation of activities, and the second is the improvement of the performance of TR2 and TR4 beneficiary groups. Policy recommendations for implementing future program activities are a strict selection of potential beneficiaries and improvements in the management aspects of beneficiaries at the farmer level by providing guidance.