Types Of Debt Research Articles

Does Debt Have Threshold Effects on Medium-Term Growth? Evidence from European Union Countries

Abstract Debt has become an important factor in economic activity and its extent has incentivized many researchers to incorporate it into contemporary growth models. On the positive side, debt has the ability to smoothen private consumption, firms’ investment and government expenditure in relation to their corresponding income, subsequently leading to better capital allocation. However, the history of debt defaults and lessons from European sovereign debt crises, which were accompanied by strict austerity measures, have warned us about the danger of debt overhang and unsustainable debt burdens. This paper tackles the question of the existence of a turning point, at which the negative effects of debt start to prevail in the economic process. In the sample of European Union countries in the period from 1995 to 2019, the author of this paper investigated the presence of threshold effects of government, non-financial corporate and household debt on medium-term growth following the paper by Mika and Žumer (2017). The author first confirmed the concave-shaped relationship between public debt and growth with a threshold of 111.6% of GDP, based on Eurostat debt-to-GDP data. In contrast, private debt was found to have first lag effects with an accompanied convex-shaped relationship between private debt and growth and with a corresponding threshold of 149.8% of GDP. Next, the author divided private debt into non-financial corporate and household debt to investigate a more detailed relationship between debt and growth. Corresponding to the Global Debt Database, the concave-shaped relationship between public debt and growth was confirmed with a threshold of 104.8% of GDP. Both of the investigated types of private debt confirmed the previously explored lagged impact on medium-term growth and a convex-shaped relationship between non-financial corporate and household debt and growth. The threshold of non-financial corporate debt stands at 138.3% of GDP, while that for household debt is 145.1% of GDP. Considering the presence of thresholds may offer an important message to economic policymakers, as timely and suitable governance can lead to either higher economic growth or prevent adverse effects of excessive indebtedness.

Blockchain based Transparent and Genuine Charity Application

Abstract: [21]Charity plays an essential role in our society, and often recognized as a type of social debt, leading to the circulation of a significant amount of money worldwide. We have witnessed increased growth of non-commercial organizations and charity funds through recent years, collecting donations for various philanthropic needs. Unfortunately, charity funds frequently gain much traction from the unscrupulous organization, leading to significant damage for industry's reputation, reducing trust level, affecting the power to boost donations. [22]We strongly believe that utilizing blockchain technology will boost trust, increase efficiency, and encourage more donations. The Charity Webapp project, a blockchain-based charity foundation platform that facilitates the trustful network's formation and is accountable for collecting donation funds. The blockchain network would be comprised of publicly known, trustful, and prestigious organizations. All organizations' operations within the platform will become fully transparent and visual , leveraging properties of immutability, provenance, and nonrepudiation.[23]Therefore the platform will alleviate the results of dishonest actions, revealing fraudulent organizations' activities. Keywords: Blockchain; ensuring trust; NGOs; encryption, Bitcoin, Beneficiary, Donars

The Aftermath of Debt Surges

Debt in emerging markets and developing economies is at its highest level in half a century. In about 9 in 10 emerging markets and developing economies, debt is higher now than it was in 2010, and in half of the emerging markets and developing economies, debt is more than 30 percentage points of GDP higher than in 2010. This article reviews a menu of options that in the past have helped lower debt burdens. It examines orthodox options (enhancing growth, fiscal consolidation, privatization, and wealth taxation) and heterodox options (inflation, financial repression, and debt default and restructuring). The mix of feasible options depends on country characteristics and the type of debt. However, none of these options comes without political, economic, and social costs. The challenges associated with debt reduction raise questions of global governance, including to what extent advanced economies can better support emerging market and developing economies in cushioning prospective shocks.

Blockchain-Based Crowdfunding Platform for Disaster Relief and Effective Charity

Charity plays an essential role in our society, and often recognized as a type of social debt, leading to the circulation of a significant amount of money globally. We have seen a increased growth of organizations and public charity funds through recent years, collecting donations for various philanthropic needs. Unfortunately, most of the charity funds frequently gain much funds from the unethical organization, resulting in significant damage for industry's reputation, which results in reducing trust level which affects the ability to raise donations. We strongly believe that utilizing this technology will boost trust , increase efficiency, and encourage more donations. The Charity project, a blockchain-based charity foundation platform that facilitates the trustful network's formation and is accountable for collecting donation funds. The blockchain network contains publically recognized, trustful, and prestigious organizations. The complete system will be decentralised using Blockchain Technology, Smart Contracts and Cryptocurrency. We strongly believe that utilizing our technology will boost trust , increase efficiency, and encourage more donations. All organization’s operations and functions within the platform will become fully transparent and visible, leveraging properties of immutability, provenance, and non- repudiation to the users. All organizations operations and functions within the platform will become fully transparent and visible, therefore the platform will reduce the results of dishonest actions, revealing fraudulent organizations' activity.

Technical debt: What it is, how it limits you and what you can do to manage it

Within educational advancement services, technical debt (and data debt) can have positive or adverse impacts on the strategic initiatives of your organisation as well as your team’s ability to innovate or feel empowered. With the ever-growing need for data products, technical debt can be leveraged positively to provide timely insights into prospect engagement or donor segmentation. However, like its financial counterpart, it can adversely affect staff morale, impair a team’s velocity and impact overall productivity, if it is not managed. This paper identifies what technical debt is; differentiates the types of technical debt and their corresponding effects on your strategies and leadership; and proposes techniques to empower your staff in assessing, mitigating, and planning your technical debt.

Good debt, bad debt: family debt portfolios and financial burdens

PurposeIn recent decades, research on consumer debt and well-being is emerging. However, research on the potential effect of debt portfolios on family financial well-being is limited. The purpose of this study is to fill this research gap by examining the potential effect of debt portfolios on family financial well-being, measured by three indicators of progressive financial burdens. These indicators include debt pressure (debt payment to income ratio >40%), debt delinquency (60+ days late for debt payments) and insolvency (total liability > total asset). Debt portfolios refer to various combinations of mortgage, credit card, vehicle, education and other loans.Design/methodology/approachWith data from the 2019 Survey of Consumer Finances in the USA, multivariate logistic regressions are used to identify specific debt types, consumer backgrounds and financial capability factors that are significantly associated with debt burden indicators. The findings are used to create a table demonstrating warning debt portfolios that may lead to undesirable financial outcomes.FindingsHoldings of different types of debts are associated with different financial burdens. Specifically, holdings of three types of debts (mortgage, vehicle and other debts) tend to increase debt pressure; holdings of two types of debts (education and other debts) tend to increase debt delinquency; and holdings of four types of debts (mortgage, credit card, education and other debts) tend to increase insolvency. These results are used to construct warning debt portfolios that show greater chances of undesirable financial outcomes. Among them, the top warning portfolio for debt pressure is the combined holding of mortgage-vehicle-other debts; for debt delinquency is the holding of education-other debts; and for insolvency is the holding of mortgage-credit card-education-other debts.Research limitations/implicationsThis study is limited by using only cross-sectional survey data to examine associations between debt portfolios and financial burdens. To examine the causality of debt portfolios on financial burdens, appropriate panel data are necessary, which is a direction for future research. In addition, this study used data from only one developed country. In future research, data from more countries, including both developed and developing countries, should be analyzed to verify if similar relationships exist among families in other countries.Practical implicationsResults of this study have implications for practitioners in banking and other financial institutions. The study presents a comprehensive list of debt portfolios in the order from high risk to low risk in terms of financial burdens. Banking and other financial service professionals can use the information to help their clients make informed borrowing decisions, predict their debt burdens and offer early preventions based on their clients' debt portfolios. Marketing strategists can use the information for effective segmentation and promotion purposes.Originality/valueThis study utilizes a new concept, debt portfolios and examines its associations with family financial burdens. Financial burdens include three indicators that are seldom used together in previous research. These indicators conceptually indicate various severity levels of debt burdens. This study also presents a conceptual discussion on the association between debt portfolios and financial burdens and provides a better understanding of consumer debt behavior and its consequences. The warning debt portfolios constructed based on the findings have direct managerial implications for banking and other financial service professionals.

Exploiting gated graph neural network for detecting and explaining self-admitted technical debts

Self-admitted technical debt (SATD) refers to a specific type of technical debt that is introduced intentionally in the software development and maintenance processes. SATD enables practitioners to take some temporary solutions instead of making comprehensive decisions, which will lead to the high complexity of the software. However, most existing studies relied on manual methods for detecting SATDs. A recent study proposed a method HATD that used a hybrid attention-based method to automatically detect SATDs and it achieved the state-of-the-art performance. However, HATD mainly focused on the locality of the comment instances and lacked of the relationship between long-distance and discontinuous comment instances. To address such an issue, in this work, we propose a novel approach named GGSATD. Specifically, GGSATD first builds the graph for comment instances and then employs the gated graph neural network to iteratively update node representation. The global representation can be obtained by the soft attention mechanism and pooling operation. Experiments on 10 projects show that our GGSATD method obtains promising performance against five baseline methods in both within-project and cross-project scenarios. Extended experiments on seven real-world projects illustrate the effectiveness of our GGSATD method.

Decomposition analysis of the decoupling and driving factors of municipal solid waste: Taking China as an example.

As one type of debt 'borrowed' from nature, municipal solid waste (MSW) can be influenced by financing debt. Taking China as an example, an improved Logarithmic Mean Divisia Index (LMDI) model, together with the Tapio decoupling model, is developed to analyze the impact of private debt on MSW generation and the relationship between MSW and economic growth. The results show that the debt-income ratio promotes MSW generation and the output efficiency of debt inhibits MSW generation. Second, the linkage relationship between GDP growth and MSW shows three states: strong decoupling, expansion coupling and weak decoupling. The MSW generation per unit of GDP and the output efficiency of debt are the main contributors to the change of decoupling state. Third, implementing a MSW classification measure can greatly reduce the quantity of MSW removed and transported and improve the decoupling state. By 2035, deleveraging scenario and economic growth slowdown scenario can reduce MSW removal and transportation quantities by 765 and 1080 million tons, respectively. It is worth noting that negative population growth worsens decoupling while curbing MSW. The results provide a new perspective for the realization of MSW reduction and some sound policies are formulated to improve MSW management.

On the Relationship between the Application of Actual Performance and Compensation for Damages in the Civil Code of the People’s Republic of China

The Civil Code of the People’s Republic of China stipulates that actual performance and compensation for damages are the main remedies for breach of contract, but does not specify the order of their application. Actual performance does not fall in the effect of a claim of debt as it contains a negative evaluation of breach of contract. The application of compensation for damages is limited by the difficulty to determine the benefits of performance. Hence, neither has a basis for priority application in the general sense. This paper aims to improve the accuracy of judgments by clarifying the relationship between actual performance and the compensation for damages using typed research methods. In terms of value, the liability for breach of contract should be decided primarily based on the fulfillment of the purpose of the contract and efficiency as well. In terms of method, the judgment should be made comprehensively based on the degree and form of breach of contract, combined with the characteristics of the type of contract debt.

ОБЛІКОВЕ ЗАБЕЗПЕЧЕННЯ УПРАВЛІННЯ ДОВГОСТРОКОВИМИ ЗОБОВ’ЯЗАННЯМИ ПІДПРИЄМСТВ

The article reveals the nature, recognition and evaluation of long-term liabilities, their composition, summarizes the method of accounting for long-term liabilities and disclosure of information in the financial statements, based on which the company makes management decisions. The purpose of the article is to substantiate the theoretical and methodological provisions and develop practical recommendations aimed at improving the accounting support for long-term liabilities. The article will reveal information about the nature and evaluation of long-term liabilities. Valuation of liabilities can be measured reliably, and the future benefits of reducing those liabilities may decrease. This paper presents the composition of long-term liabilities in accordance with NP (S) BU 11 "Liabilities" and the Chart of Accounts. Correspondence of accounts on accounting of long-term financial lease liabilities, bonds sold at a premium and at a discount, promissory notes in national currency will be considered. In modern conditions, enterprises are one of the main sources of financing of economic activity, so the use of obligations effectively (or productively) affects the activities of enterprises. The issue of accounting for accounts payable (long-term and current) is relevant for enterprises, because the financial condition of the enterprise largely depends on the effective management of this type of debt. The question of timeliness of settlements between business entities is acute. Failure to repay liabilities, including long-term ones, leads to the accumulation of such debt and the depreciation of funds for creditors, which adversely affects the financial condition of the enterprise. The solution to this problem is possible under the conditions of effective management of long-term liabilities based on the analysis of information generated in the accounting system for reflection in the financial statements. The information on methodological bases of formation in the account of obligations and their disclosure in the reporting which is regulated by the legislative base is presented. Long-term liabilities are reflected in the liabilities of the balance sheet at their present value in Section II, and the notes to the financial statements provide information on the list and amounts of liabilities. Based on this reporting, the company can make management decisions.

State-Contingent Government Debt: a New Database

State-contingent government debt has been proposed as a way to reduce costly debt crisis. However, markets for this type of debt remain very limited, for reasons that are not yet fully understood. This paper describes a new database covering state-contingent government debt issued between 1863 and 2020. Based on these data, this paper shows stylized facts regarding the main design features, and market performance, of state-contingent government debt. It also provides a brief history of state-contingent government borrowing, which is contextualized with a simple theoretical model of state-contingent debt. The results show that there have been several small, heterogeneous, issuances of state-contingent debt, which resemble pilot runs in this new asset class. The paper concludes with some common challenges associated to state-contingent government debt.

Debt structure: a solution to the puzzle of capital structure

PurposeThe purpose of this paper is to investigate the relation between debt structure and future external financing and investment. Furthermore, it aims to analyze the association between debt structure and future financial performance.Design/methodology/approachVolume, maturity, possessing collateral and having priority at the settlement date are the dimensions of debt structure that have been employed in this paper. The sample consists of 1,060 firm-year observations from Tehran Stock Exchange corporations during the period 2009–2018.FindingsThe findings reveal that greater reliance on financial leverage (debt volume) and short-term debt are associated with increases in future debt financing as well as future equity financing. Moreover, these two dimensions of debt structure are positively related to future investment. This paper also shows that the positive impact of financial leverage and short-term debt on future financing and investment can finally lead to a favorable financial performance. Regarding other dimensions of debt structure, the results suggest that although collateralized debt with the priority option at the settlement date enhances future external financing, this type of debt can ultimately lead to a reduction in future investment and financial performance. Finally, the findings indicate that uncollateralized debt exacerbates future financial performance.Research limitations/implicationsFinancial performance can be affected by several factors, including available funds, investment amount, investment efficiency and managerial capability. However, this paper only considers the investment amount and external financing as the channels through which debt structure improves future financial performance. This study has the potential to contribute to one of the most important issues in finance and business fields, despite its probable trivial drawbacks.Practical implicationsFinancing strategies as one of the most controversial topics have been meticulously scrutinized in this paper and practical implications are made to facilitate the process of decision-making regarding the optimal type of debt financing.Originality/valueThis study extends the literature by analyzing the direct link between debt structure and firm performance in firms domiciled in developing markets.

Estimated policy rules for capital controls

Are capital controls macroprudential or mercantilist? I explore this question using a novel, weekly dataset on policy actions in 21 emerging-market economies (EMEs) from 2001 to 2015, and a new proxy for mercantilist motivations: the weighted appreciation of a country’s currency against those of its trade competitors. Capital controls arebothmercantilist and macroprudential. Moreover, the choice of instruments is systematic: policymakers use two instruments—inflow tightening and outflow easing—to respond to mercantilist concerns, while using only inflow tightening in response to macroprudential concerns. Inflow tightening is countercyclical to bank credit to GDP gap but acyclical to the specific macroprudential concerns related to external or foreign currency borrowing. However,high level of some types of foreign debt reduces countercyclicality to mercantilist concerns. Higher exchange rate pass-through to export prices, and inflation targeting regime with managed exchange rates, increase countercyclicality to mercantilist concerns.

Growing budget deficit and national debt: estimates, problems, risks

The article analyzes the structure of the US federal budget, the main sources of revenues, expenditures (annually revised discretionary spendings, mandatory financing of the main social and a number of critical areas of government activity, interest debt payments), factors affecting their dynamics. A special place is occupied by the analysis of the national (sovereign) debt of the United States, which includes two types of debt: the government’s debt to buyers of its securities (American individuals and legal entities, the Federal Reserve System, international investors, foreign governments) and the so-called intragovernmental debt. The article raises the question of where the "red line" is when the growing debt becomes dangerous for the United States. However, the article lists factors that mitigate the sovereign debt problem for the United States. Much attention is paid to the challenges that the administration of J. Biden and the Congress of the current and future convocations will have to face. In particular, in the short term, this is the need to reduce the budget deficit, to extend a number of social programs that are about to expire, but above all to resolve the debt ceiling issues. The paradoxes of decision-making in the budget process concerning the debt ceiling are considered. The points of view of experts are presented, arguing the need for refusal and preservation of the legislative codification of the debt ceiling. In the long term, the United States will face challenges such as a growing debt burden, the need to reform the budgetary decision-making process. The Congress will have to worry about how to defuse the time bomb laid down in a number of mandatory budget programs.

Welfare generosity, credit access and household debt: clarifying relationships through a new welfare-debt typology

ABSTRACT This paper contributes to the political economy literature exploring the intersection of the welfare state and financialisation by addressing two important questions that have emerged from recent findings. First, why have both low generosity and high generosity environments been linked to higher levels of household debt? Second, how might this be explained by the variation in the role of debt across these very different contexts? To answer these questions, I develop a typology of Welfare State – Credit Contexts, which emerges from the interaction of two dimensions: welfare generosity and credit access. I test the implications of this model using welfare generosity and household liabilities data for a sample of OECD countries, spanning from the late 1990s to 2010. Using fixed effects models, I find that welfare generosity is negatively related to non-mortgage debt, with evidence that this relationship is conditional on credit access. In contrast, I find mortgage debt is consistently linked to levels of credit accessibility but fail to establish its relationship to welfare generosity. These results demonstrate the need for greater specificity when discussing the relationship between welfare generosity and household debt and for greater attention to the causes and consequences of different types of household debt.

Household indebtedness and depressive symptoms among older adults in China: The moderating role of social network and anticipated support

BackgroundExamine the association of household financial indebtedness with depressive symptoms in old age, and investigate whether social network and support anticipation moderate the association. MethodsData were obtained from Sample Survey on Vulnerable Populations from Poor Families in Urban/Rural China (2018), with a sample of 5 934 older adults included. Center for Epidemiologic Studies Depression Scales was applied to measure depressive symptoms. Household indebtedness was measured in several ways, including whether the household was indebted, the amount of debts, and types of debts. We used the 6-item Lubben Social Network Scale to measure individual's social network. Socio-demographic, socioeconomic status and physical health variables were included as covariates. ResultsHousehold indebtedness, in form of being indebted and increased amount of debts, was associated with greater depressive symptoms in the Chinese elderly. The association of indebtedness and depressive symptoms may be driven by consumption and emergency debts. The moderating roles of social network and anticipation of support in the association of household indebtedness and depressive symptoms were found. Among those with household debts, older adults with larger size of social network and/or higher anticipation of being supported in the future reported with less symptoms of depressed. LimitationsDue to a lack of information on the duration and debtor of household debt, we were not able to present a precise estimate for the exact impact of household indebtedness on mental health of elderly. ConclusionFamilial financial strain was associated with aging mental well-being, increased social networks and social protections benefit aging health.

The tax-efficient use of debt in multinational corporations

Affiliates of multinationals borrow a considerable amount from their parent company, even when the parent is located in a high-tax country. This is at odds with standard theories of a tax-efficient capital structure. We set up a model that analyzes the functioning of the internal capital market and investigates the trade-off between tax savings and capital market frictions within the group. We test the model on data of the universe of German multinationals. The empirical analysis largely supports our model in that: (i) smaller multinationals often rely on parental debt financing; (ii) larger multinationals are more likely to use internal banks; (iii) parental debt and external debt are substitutes and the mix depends on the relative cost of raising capital through the parent and the affiliates; (iv) local and within-group tax incentives play an important role in determining all three types of debt.

On the relation between architectural smells and source code changes

AbstractAlthough architectural smells are one of the most studied type of architectural technical debt, their impact on maintenance effort has not been thoroughly investigated. Studying this impact would help to understand how much technical debt interest is being paid due to the existence of architecture smells and how this interest can be calculated. This work is a first attempt to address this issue by investigating the relation between architecture smells and source code changes. Specifically, we study whether thefrequencyandsizeof changes are correlated with the presence of a selected set of architectural smells. We detect architectural smells using the Arcan tool, which detects architectural smells by building a dependency graph of the system analyzed and then looking for the typical structures of the architectural smells. The findings, based on a case study of 31 open‐source Java systems, show that 87% of the analyzed commits present more changes in artifacts with at least one smell, and the likelihood of changing increases with the number of smells. Moreover, there is also evidence to confirm that change frequency increases after the introduction of a smell and that the size of changes is also larger in smelly artifacts. These findings hold true especially in Medium–Large and Large artifacts.

Firm Indebtedness, Deleveraging, and Exit: The Experience of Slovenia during the Financial Crisis, 2008–2014*

ABSTRACT This paper examines the impact of the global financial crisis on firm exit and corporate deleveraging in Slovenia during 2008‒2014 using firm-level data. Firms are classified according to whether they increased their leverage, decreased their leverage or ceased operation during the specified time interval, and the likelihood of being in these three states are estimated. Deleveraging likelihood is analyzed separately for total debt, business-to-business debt, bank debt, and non-bank financial debt. The empirical exercise shows that the influence of covariates on firm exit was different from that on deleveraging, and the impact on deleveraging differed between different types of debt.

Transportation Infrastructure Project Financing; Highways Capital Structure Design Techniques

Whether a private bidder can win a concession depends largely on advanced financial engineering techniques, numerous methods were developed. Meeting large infrastructure needs including its proper maintenance and operation is and will remain a major challenge for the all-around the in the coming years requiring targeted innovative financing mechanisms. Even though it is recognized that there are three types of financial instruments, equity, mezzanine finance and debt in funding an infrastructure project, the status quo is that previous capital optimization methods did not consider mezzanine finance or simply categorized it into debt-like or equity-like instruments. The global infrastructure sector is witnessing a steady growth of private equity investment in mezzanine instruments. The frequent usage of the contingent claim embedded in mezzanine financing makes the traditional model for capital structure optimization invalid. This study presents a more advanced method to optimize capital structure in infrastructure financing. This easily implemented method is based on a two-stage procedure: I) identification of optimal stopping time for convertible securities, and II) capital structure optimization by a conventional model. The quantitative optimization model can be easily generalized. The global infrastructure sector is witnessing the continued growth of a private equity fund of mezzanine tools. Repeated use of potential claims embedded in mezzanine financing has invalidated the traditional model for optimizing capital structure.