Types Of Debt Research Articles

Analyzing Small and Medium Enterprises’ Perception towards Private Equity as an Alternative Source of Finance in Lusaka District

As guided by the Capital Structure theory, in order to obtain external financing, SMEs may either select debt type of financing or equity type of financing. Since the typical SME cannot meet the requirements to be listed on the Lusaka Stock Exchange, Private Equity remains an attainable source of finance for SMEs who do not want to be financed with debt. This study aimed to analyse the perceptual preference of private equity as an alternative source of financing for SMEs. To meet this objective, an assessment was conducted on the preference of Private Equity to Debt finance. Further, the perception of SMEs towards private equity was explored and themes that influenced the various perception were investigated. A qualitative study was undertaken to meet the above-mentioned objectives. The study employed a grounded theory approach and interviews were used as the primary data collection tool. Fifty-five (55) SMEs who hold accounts with Zambia Industrial Commercial Bank under the Wholesale and Retail trade industrial sector were interviewed and a purposive sampling method was used. From the interviews conducted, the emerging theme was SMEs preferred private equity finance to debt finance mainly in cases where the SMEs interviewed were faced with economic uncertainty, limited collateral, intended to grow quickly, and required technical assistance. However, loss of control, lack of a legal framework and unavailability of Private Equity firms in Lusaka hindered SMEs from utilizing this type of financing. This finding is derived from SMEs preference to Private Equity over debt finance and a largely positive perception SMEs have towards Private Equity finance. Negative perceptions of Private Equity were also noted. This study, therefore, went further to analyse both the factors that influence positive and negative perceptions. These factors included technical assistance, loss of control, payment mechanisms, and duration of the financing methods. The conclusion drawn from this study is that Private Equity is preferred to debt finance because of the lack of high-interest rates and collateral requirements for Private Equity. This study also concludes that there are mainly positive attributes to private equity, though negative perceptions also exist. Loss of control, decision-making concerns, technical assistance, lack of availability of this type of finance, repayment mechanisms, and non-requirement of collateral were noted as factors that were attributed to the conflicting perceptions of SMEs towards Private Equity. Due to this situation, it is recommended that Financial Services Providers take a keen interest in this mode of financing as there is a potential market in this field. Additionally, it is recommended that researchers may focus on conducting a feasibility study to extend the mandate of firms that have been historically providing debt to also include Private Equity Finance for SMEs. Lastly, it is proposed that studies are carried out to assess the legal landscape of Private Equity in Zambia. KEYWORDS:

On the interdependencies between mortgage, credit card and auto loans delinquency rates: evidence from the US states plus the District of Columbia

Purpose This study aims to explain how delinquency shocks in one type of debt contaminate the others. That is, the authors aim to shed light on the time pattern of delinquencies in different debt types. Design/methodology/approach This study analyzes the interdependencies between mortgage, credit card and auto loans delinquency rates in the USA from 2003 to 2019, using a panel VAR-X, the panel Granger causality tests and the Geweke linear dependence measures. The authors also compute the impulse response functions of a shock to one kind of debt on the others and decompose the variance of the forecast errors. Findings The authors find a statistically significant bidirectional Granger causality between the delinquencies. The Geweke measures of linear dependence and the Dumitrescu and Hurlin Granger non-causality tests support that mortgage predominantly causes credit card and auto loan delinquencies. Auto loans also cause credit card delinquencies. The impulse response functions confirm this pattern. This scenario aligns with a sequence where debtors consider rational first to default on credit cards, second on auto loans and only on mortgages in the last instance. Indeed, credit card delinquencies Granger-cause delinquencies in other debts when it occurs. Originality/value To the best of the authors’ knowledge, this is the first study to focus on the temporal pattern of delinquency rates for all the US states, using panel data. Furthermore, the results call for policymakers to design regulations to break the transmission channel from debt delinquencies.

Differences In Debt Among Postgraduate Medical Residents By Self-Designated Race And Ethnicity, 2014-19.

The US physician workforce does not reflect the racial and ethnic makeup of the country's population, despite efforts to promote diversity. Becoming a physician requires significant time and financial investment, and populations that are underrepresented in medicine have also been excluded from building wealth. Understanding the differential burden of debt by race and ethnicity may inform strategies to improve workforce diversity. We used 2014-19 data on postgraduate resident trainees from the Association of American Medical Colleges to examine the association between race and ethnicity and debt independent of other demographics and residency characteristics. Black trainees were significantly more likely to have every type of debt than the overall sample and all other racial and ethnic groups (96percent of Black trainees had any debt versus 83percent overall; 60percent had premedical education loans versus 35percent overall, and 50percent had consumer debt versus 25percent overall). American Indian/Alaska Native, Hispanic, and Native Hawaiian/Pacific Islander trainees were more likely to have debt compared with White and Asian trainees. Overall, debt prevalence decreased over time and varied by specialty; however, for Black trainees, debt decreased minimally over time and was stable across specialties. Scholarships, debt relief, and financial guidance should be explored to improve diversity and inclusion in medicine across specialties.

Методологічний компонент удосконалення оцінки довгострокової заборгованості як фінансового інструменту

Accounts receivable and payable are one of the most common types of financial instruments of agricultural enterprises. Until recently, such debt was considered a traditional accounting object with established recognition rules, cost measurement and disclosure. However, since the end of 2019, the valuation of such financial instruments has changed due to introducing the present value as a priority for its long-term type. The article aims to reveal the methodology for determining the present value of long-term debt as the most common type of financial instrument. The specifics of the application of the present value for the assessment of long-term debt were disclosed. It was substantiated which types of such debt are subject to the discounting requirement and which are not. The problem points of introducing a new type of assessment, which affect the data of financial statements, were identified. The article contains the necessary data and rules for the most reliable calculation of the present value of long-term receivables and long-term liabilities as financial instruments. The study results show that for the most accurate and objective determination of the present value of long-term receivables and long-term liabilities as financial instruments, the agricultural enterprise needs to record the methodology of cost measurement of such objects in the Regulation of accounting policy. In particular, it is necessary to specify the object (which type of long-term debt is subject to discounting and which is not), the calculation (formula), the variable (discounting rate selection procedure) and the documentary (a form of the primary document) components.

South Africa’s NINA debtor plight: Lessons from the Scottish consumer debt relief system post the Covid-19 pandemic

In this article, the authors consider the plight of the so-called No Income No Asset (NINA) debtors against the backdrop of debt relief measures provided for this category of debtors who find themselves in a debt trap. It is a well-known fact that South African insolvency law does not provide sufficient debt relief measures for all types of debts, and those, like the NINA debtors, who are effectively excluded from the relief afforded by the sequestration and ultimately rehabilitation procedures of the Insolvency Act 24 of 1936 have no proper statutory measure to provide a discharge of debt in instances where they may desperately need it. It is submitted that the debt restructuring mechanisms provided by the administration procedure and debt review measure, are not sufficient since these do not offer a discharge. Reference is made to the newly proposed debt intervention procedure that may provide some relief in this regard, but it is argued that the legislature needs to consider further procedures to deal with their plight. With the view of making some recommendations for reform, aspects of mainly the Scottish system of debt relief measures are also considered.

Borrower- and lender-specific determinants in the pricing of sustainability-linked loans

The financial industry has developed a wide breadth of instruments to support the growing number of firms interested in socially responsible, or “sustainable”, investing. The use of the most well-known, green bonds, is generally limited to investments defined by the Green Bond Principles. However, more flexible sustainability-linked loans (SLLs) have skyrocketed in importance recently. In 2021, they became the largest corporate debt type including a sustainable feature, raising USD 735 billion globally. Existing evidence on the potential lower yields of green bonds, also known as the greenium, supports their attractiveness from a borrower's perspective. Contrary to this evidence, however, little is yet known about the financial attractiveness of SLLs. We address this research gap, and provide new findings on the yields of sustainability-linked loan financing. We study 121 SLLs originated in 2021, and compare them to peers of matched conventional loans featuring similar characteristics. We find that SLLs are associated with lower initial yields for borrowers. This benefit is more pronounced for borrowers with strong environmental profiles, and for loan originations conducted using a lender syndicate with high environmental standards. The financial benefits, coupled with their flexible structure, suggest that SLLs can be an attractive tool for companies from a variety of sectors to use in managing sustainable business transformations and addressing the challenges of climate change.

From SATD Recognition to an Interpretation Method Based on the Dataset

Technical debt describes a trade-off between short-term goals and long-term code quality during software development. Self-admitted technical debt (SATD), a type of technical debt, is intentionally introduced by developers. The existence of SATD is likely to leave hidden dangers for future changes in software systems, so identifying SATD is an essential task. Before this, many methods for recognizing SATD (such as pattern matching-based, natural language processing-based, text mining-based, etc.) have been proposed. This paper will present a pre-trained deep learning model to complete the SATD recognition task. An efficient deep learning model interpretation tool Captum can be used to understand the experimental results. At the same time, a new interpretation view is proposed for the matching-based model. Finally, combined with the research in this paper, reasonable suggestions are put forward for future SATD recognition tasks.

Debt component of financial stability

Subject. The article considers the debt burden of countries and institutional units within them as part of financial stability. Objectives. The purpose is to analyze the conditions and to trace long-term historical trends in the debt of non-financial sector as a factor of financial stability in relation to some developed and developing nations. Methods. The study rests on the review of counter-positions of various authors on the subject, the cross-country comparative analysis, cluster analysis, trend analysis, and the graphical method. Results. The paper offers a systematization of types of debt of institutional sectors, discloses theoretical foundations of debt analysis as a factor of financial stability, reveals long-term trends in non-financial sector’ debt, based on the Bank for International Settlements data covering information on 31 advanced economies and 13 emerging markets. Conclusions. The findings can be used by the Ministry of Finance and the Bank of Russia, when developing fiscal and monetary policy strategies and tools aimed at ensuring conditions for financial stability. The paper identifies countries with leverage (including public debt and private sector debt) exceeding critical thresholds in terms of constraints on economic growth and financial stability.

Household debt in the times of populism

This study examines the effects of populism on household debt in 30 countries. Using a newly developed database of populist leaders, we observe that populism has a significantly negative effect on household debt, that is, households tend to hold less debt when populist leaders are in office than when non-populist ones are in office. We explore potential channels for this phenomenon. We observe that left-wing populism diminishes household debt by reducing household consumption while right-wing populism diminishes household debt by increasing public debt. Both types of populism decrease household debt by reducing lenders’ willingness to lend. Overall, our results suggest that populism is an important factor in explaining household debt dynamics.

Features of recognition of doubtful debt in the tax accounting of medical organizations

The article is devoted to the peculiarities of recognition of dubious debt in order to calculate the provision for dubious debts in the tax accounting of medical organizations. It is noted that the reserve can be created only by taxpayers who apply the accrual method when recognizing income and expenses on corporate tax. The concept of doubtful debt in tax accounting is considered. It was noted that the amount of doubtful debt includes overdue debt, taking into account value added tax, while according to Article 266 of the Tax Code of the Russian Federation, this debt should arise exclusively in connection with the provision of medical services, the performance of work or the sale of goods — other types of debt (for example, loans or paid raw materials) are not included in the amount of doubtful debt. Analyzed situations in which the organization has both overdue receivables and payables for the same counterparty. Practical examples of determining the amount of doubtful debt in tax accounting are considered.

Firm-level political risk and corporate leverage decisions

This study examines the effects of firm-level political risk on firm leverage decisions and speed of adjustment. We uncover that firm-level political risk has a negative impact on a firm's total and long-term leverage. We also find that firms facing high political risk tend to prefer debts with short-term maturity. However, firm-level political risk is positively related to debt specialisation, suggesting that firms are more inclined to adopt fewer debt types when they face high political risk. Further analysis reveals that firms with high political risk are associated with a faster speed of adjustment to target than those with low political risk. Our results are robust to endogeneity concerns and the effects of financial crisis.

Contradiction and restructuring in the Belt and Road Initiative: reflections on China’s pause in the ‘Go world’

The Belt and Road Initiative (BRI) is a massive Chinese state/capitalist programme of transnational infrastructure construction initiated in 2013. Between 2013 and 2016, Chinese banks extended hundreds of billions of dollars –principally across Asia, but also Europe and Africa – for transportation and energy networks. Recently released statistics, however, suggest that project lending for the BRI collapsed from 2016 onwards. Our paper examines the reasons for this contraction through a case-study of the BRI in Africa. We contend that the lending contraction resulted from political and economic contradictions generated by this form of international interconnection, including the types of debt traps it helped create. This outcome is explained partly by the fact that the BRI is simultaneously a geopolitical and geoeconomic project. Whereas the balance of economic risks is arguably skewed against borrowers (in some cases leading to debt traps), from a geopolitical perspective, the Chinese state also seeks to expand influence in Africa and elsewhere in the developing world. This creates counter-pressure on further expansion of such financing, which, complemented by domestic economic implications of loan failure, helps to explain the contraction.

Financial Leverage and Life Satisfaction of U.S. Baby Boomer Retirees: An Empirical Study

This study examined the association between financial leverage and life satisfaction for retired baby boomers in the United States. Financial planning factors modeled included mortgage and non-mortgage debt, wealth, income, financial satisfaction, and financial control. This empirical study used a sample of 984 retirees aged 50-70 from the 2016 Health and Retirement Study. Life-cycle hypothesis was employed to explain and model life satisfaction. Ordinary least squares regression produced an adjusted R-squared of 41.31%. Partial support for the hypotheses was demonstrated. Non-mortgage debt was found to be negatively associated with life satisfaction, indicating lack of utility for this type of debt. Mortgage debt, on the other hand, was not negatively or positively associated with life satisfaction. Significant variables contributing to life satisfaction included financial satisfaction, physical health, social control, life expectations, and marital status. The results of this modeling would appear to indicate that outstanding non-mortgage debt has a greater negative impact on life satisfaction than mortgage debt.

Debt dynamic, debt dispersion and corporate governance

PurposeThis paper addresses the following questions: Why do some firms employ multiple debt types? What explains debt heterogeneity? Is the choice of the source of debt a function of corporate governance?Design/methodology/approachThe author's paper is empirical and uses multiple regression analysis.FindingsFirms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Contrastingly, firms that are well-managed tend to concentrate debt and borrow predominantly from a few creditors. The author also found that while bank debt is negatively associated with debt concentration, market debt is positively associated with debt concentration.Research limitations/implicationsFirms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Well-managed firms tend to concentrate debt and borrow predominantly from a few creditors. Bank debt is negatively associated with debt concentration and market debt is positively associated with debt concentration.Practical implicationsPolicymakers and practitioners need to account not only for changes in the firm’s total debt level but also for changes within the firm’s debt composition. Understanding a manager’s choice of debt structure can incentivize creditors to effectively monitor and use debt concentration as a form of commitment device that transfers some control rights from the manager to creditors.Originality/valueWhile a vast body of corporate finance literature examines the conflict between shareholders and management, there is little empirical work on the conflict between creditors and management. In this paper, the author examines how managerial entrenchment affects debt structure. The results provide a comprehensive picture of how corporate governance influences debt choice(s).

Identifying self-admitted technical debt in issue tracking systems using machine learning

Technical debt is a metaphor indicating sub-optimal solutions implemented for short-term benefits by sacrificing the long-term maintainability and evolvability of software. A special type of technical debt is explicitly admitted by software engineers (e.g. using a TODO comment); this is called Self-Admitted Technical Debt or SATD. Most work on automatically identifying SATD focuses on source code comments. In addition to source code comments, issue tracking systems have shown to be another rich source of SATD, but there are no approaches specifically for automatically identifying SATD in issues. In this paper, we first create a training dataset by collecting and manually analyzing 4,200 issues (that break down to 23,180 sections of issues) from seven open-source projects (i.e., Camel, Chromium, Gerrit, Hadoop, HBase, Impala, and Thrift) using two popular issue tracking systems (i.e., Jira and Google Monorail). We then propose and optimize an approach for automatically identifying SATD in issue tracking systems using machine learning. Our findings indicate that: 1) our approach outperforms baseline approaches by a wide margin with regard to the F1-score; 2) transferring knowledge from suitable datasets can improve the predictive performance of our approach; 3) extracted SATD keywords are intuitive and potentially indicating types and indicators of SATD; 4) projects using different issue tracking systems have less common SATD keywords compared to projects using the same issue tracking system; 5) a small amount of training data is needed to achieve good accuracy.

Do we need to pay technical debt in blockchain software systems?

For blockchain software systems, framework developers may introduce technical debts that application developers are not aware of. Because these technical debts can have a negative impact on software projects, we need to investigate the issue of technical debt in blockchain software systems. We wanted to investigate what types of self-introduced technical debt exist in open-source blockchain software systems, and how these technical debts are distributed. We have selected six most popular blockchain software projects from GitHub. Then the code comments from these software projects were extracted and manually labelled. Finally, the code comments were statistically analysed. We propose a new type of technical debt, resource debt, which is explicitly identified by the framework developers and requires special attention in subsequent production systems. Six types of technical debt are prevalent and there is not any algorithm debt. In addition, we find that the code comments containing technical debt are not entirely determined by task tags. SATD is prevalent in blockchain projects. There is more significant variability between different application software projects for different technical debts. The results of the study imply that for detecting SATD, deep semantic discovery models should be used, such as pre-trained models.

Економіко-правова роль арбітражного керуючого в процесі санації підприємств в Україні

Abstract. Introduction. An effective system of bankruptcy and liquidation of enterprises has a significant impact on the effectiveness of doing business. However, bankruptcy is a way to get rid of debt,. The main purpose is to secure creditors' claims, but not to liquidate the company. In this context, effective implementation of remedial measures is very important for restoring the liquidity and solvency of enterprise, reducing all types of debt. One of the key figures in bankruptcy proceedings is arbitration manager. Purpose. The purpose of the article is features of the reorganization process of enterprises in Ukraine and the economic and legal role of arbitration manager in this procedure. Results. The role of arbitration manager in the process of rehabilitation of enterprises in Ukraine is investigated. The essence and significance of reorganization process in bankruptcy procedure are presented. The main participants of bankruptcy of enterprises are described. The role of arbitration manager in the process of rehabilitation of enterprise from the legal and economic level is described. The professional basis of activity, features of realization of powers in bankruptcy procedure and legally conditions of activity of arbitration manager are specified. The legally defined rights and responsibilities of arbitration.

Stock Market's Assessment of Monetary Policy Transmission: The Cash Flow Effect

ABSTRACTWe show that firm liability structure and associated cash flows matter for firm behavior and that financial market participants price stocks accordingly. Stock price reactions to monetary policy announcements depend on the type and maturity of debt issued by the firms and the forward guidance provided by the Fed, both at and away from the zero lower bound. Further, the marginal stock market participant knows the current liability structures of firms and does not rely on rules of thumb. The cash flow exposure at the time of monetary policy actions predicts future investment, assets, and net worth, clearly violating the Modigliani‐Miller theorem.

Which Loans Do We Take? A Micro-Level Analysis of Croatian Households' Debt Participation

This paper uses a new data set in order to explore micro-level patterns of household borrowing in Croatia. By analyzing cross-section data from the Household Finance and Consumption Survey, conducted for the first time in Croatia in 2017, we present the structure of household debt holdings and identify several household characteristics associated with debt participation in three types of bank debt: secured debt, non-collateralized loans, as well as overdrafts and/ or credit card debt. Our results indicate that: a) households with middle-aged heads tend to participate more and hold larger amounts of all three debt types; b) credit constrained households are more likely to take non-collateralized loans; c) inability to finance consumption and willingness to take risks when making saving and investment decisions contribute to participation in overdrafts and/or credit card debt.

An empirical study on self-admitted technical debt in modern code review

Technical debt is a sub-optimal state of development in projects. In particular, the type of technical debt incurred by developers themselves (e.g., comments that mean the implementation is imperfect and should be replaced with another implementation) is called self-admitted technical debt (SATD). In theory, technical debt should not be left for a long period because it accumulates more cost over time, making it more difficult to process. Accordingly, developers have traditionally conducted code reviews to find technical debt. In fact, we observe that many SATD comments are often introduced during modern code reviews (MCR) that are light-weight reviews with web applications. However, it is uncertain about the nature of SATD comments that are introduced in the review process: impact, frequency, characteristics, and triggers. Herein, this study empirically examines the relationship between SATD and MCR.