Do Financial Shocks Have Negative Effects on Small Businesses? New Evidence from Japan for the Late 1990s

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Daisuke Tsuruta
Keyword(s):  
Small Businesses ◽  
Firm Growth ◽  
Banking Sector ◽  
Credit Crunch ◽  
Economic Activities ◽  
Negative Effects ◽  
Firm Level ◽  
Level Data ◽  
Internal Funds ◽  
Low Performance

Abstract The banking literature suggests that the low performance of the banking sector can spread to real economic activities, especially small businesses. Many previous studies insist that the Japanese experience of the 1990s supports this argument. However, many studies of small businesses are often insufficient since they depend on aggregate data, even though small businesses are likely to face difficult constraints in their activities when financial problems are severe. In this study, we use firm-level data on small businesses and investigate whether bank-dependent small businesses face severe constraints on their activities, which lowers performance. Our results differ from the findings of previous work in this area. First, we show that per the widely used TANKAN statistics, the focus of many existing studies, is misleading and that a majority of respondents in this survey (at least 71%) report no worsening in the lending attitude of financial institutions in the so-called credit crunch period of 1998-1999 (or even in the 2000-2001 period). Second, using detailed firm level panel data from the Credit Risk Database, we find no significant reductions in the loans for the majority of small businesses. Third, while we do find evidence that bank-dependent firms increased reliance on internal funds during the period of the credit crunch (1998-2001), we find no evidence that this negatively impacted firm performance (as reflected in firm growth and profitability measures).

scholarly journals Customs duty incentives and their effects on customs revenue mobilization: the case of Zimbabwe (2009-2014)

2016 ◽  
Vol 5 (1) ◽  
pp. 6-13
Author(s):  
Ezera Madzivanyika
Keyword(s):  
Negative Effects ◽  
Mining Sector ◽  
Firm Level ◽  
Cross Sectional ◽  
Preferential Tariff ◽  
Panel Data Regression ◽  
Level Data ◽  
Data Regression ◽  
Firm Level Data ◽  
Tariff Rates

This paper analyzes the effects of customs duty incentives on customs revenue mobilization for the period 2009 to 2014. It employs both cross-sectional and panel data regression analysis using firm-level data obtained for a sample of 35 firms in Zimbabwe’s mining sector. The data were collected from Zimbabwe Revenue Authority’s Asycuda World System. The results from the two separate models confirm that customs duty incentives (rebates and preferential tariff rates) had negative effects on customs revenues for the period 2009 to 2014. The study, therefore, recommends an urgent need to streamline customs duty incentives granted to importers of goods meant for use in the mining sector

scholarly journals Exploring the sources of loan default clustering using survival analysis with frailty

2021 ◽  
Author(s):  
Enrique Bátiz-Zuk ◽  
Abdulkadir Mohamed ◽  
Fátima Sánchez-Cajal
Keyword(s):  
Survival Analysis ◽  
Default Risk ◽  
Banking Sector ◽  
Bank Loan ◽  
Expected Loss ◽  
Firm Level ◽  
Loan Default ◽  
Level Data ◽  
Default Rate ◽  
Systemically Important Banks

This paper investigates whether three microeconomic loan characteristics are sources of loan default clustering in the Mexican banking sector by employing survival analysis with frailty. Using a large sample of bank loan level data granted to micro, small and medium sized firms from January 2010 to 2018, we test whether classifying loans by the bank's systemic importance, industry or at individual firm level enhances the predictions of loans defaults. Our results show that loans granted by Domestic Systemically Important Banks contribute to the default clustering in micro and small firm loans. This is due to aggregate default rate levels and clusters that are large for these firms loans compared with loans provided to medium-sized firms. These findings have important implications for bank's expected loss management related to the correlated loan default risk

The determinants of ESG in the banking sector of MENA region: a trend or necessity?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rim El Khoury ◽  
Nohade Nasrallah ◽  
Bahaaeddin Alareeni
Keyword(s):  
Banking Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Mena Region ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Driving Mechanisms ◽  
Level Data ◽  
Level Of Economic Development

Purpose As reporting environmental, social and governance (ESG) information is not yet mandatory in all countries, it is intriguing to understand ESG’s underlying driving mechanisms. This study aims to investigate ESG determinants in the banking sector of the Middle East and North Africa countries. Design/methodology/approach The authors gather data for 38 listed banks for the period 2011–2019. The data used is threefold as follows: data related to ESG; firm-level; and country-level data. While ESG and firm’s level data are taken from Refinitiv, country-level data are extracted from the World Bank. Using panel regression, the authors test the effect of firm- and country-specific variables on the overall ESG score and its pillars. Findings Results indicate that banks’ ESG scores are negatively affected by performance and positively affected by size. The level of economic development exerts a negative impact on the environmental pillar while the social development exerts a positive impact on ESG and governance pillar. Corruption is the only country-level that gathers a homogenous effect on ESG scores. Finally, the three pillars follow heterogeneous patterns. Originality/value This study extends the scope of previous studies by introducing new country-level independent variables to contribute to the understanding of ESG antecedents.

scholarly journals The Impact of Water and Soil Scarcity and Pollution on Industrial Agglomeration: Evidence from China

2021 ◽  
Vol 13 (10) ◽  
pp. 5428
Author(s):  
Yingming Zhu ◽  
Yuan Li ◽  
Yi Wang ◽  
Lingfeng Li
Keyword(s):  
Statistical Tests ◽  
Fixed Effect Model ◽  
Environmental Problems ◽  
Industrial Agglomeration ◽  
Economic Activities ◽  
Negative Effects ◽  
Regional Market ◽  
Rapid Economic Growth ◽  
Level Data ◽  
The Impact

Water and soil scarcity and pollution have become more severe problems in China in recent years. On one hand, rapid economic growth has led to increasing environmental problems. On the other hand, the environmental problems resulting from human economic activities can impose new constraints on industrial agglomeration, making economic development unsustainable. In the present study, an individual fixed-effect model was constructed based on the framework of the new economic geography and the provincial-level data of China. The model estimated its parameters with OLS in order to analyze how the mechanisms of industrial agglomeration are affected by resource security and environmental factors. In addition, this study also used Hausman statistical tests and Fisher–PP unit root tests to analyze the endogenous problems and robustness of the model, respectively. The results showed that water and soil scarcity and environmental pollution have negative effects on industrial agglomeration. The negative effects were observed to significantly increase with levels of local government competition, but did not vary with the regional market segmentation.

R&D DYNAMICS AND FIRM GROWTH: THE IMPORTANCE OF R&D PERSISTENCY IN THE ECONOMIC CRISIS

2019 ◽  
Vol 23 (05) ◽  
pp. 1950049
Author(s):  
HAYOUNG PARK ◽  
TAEWON KANG ◽  
JEONG-DONG LEE
Keyword(s):  
Economic Crisis ◽  
Firm Growth ◽  
Global Financial Crisis ◽  
Firm Level ◽  
Level Data ◽  
The Global Financial Crisis ◽  
The Impact ◽  
D Investment ◽  
High Uncertainty

There has been a lot of interest in R&D dynamics, including the persistency and volatility of R&D investment. However, there is a lack of empirical evidence supporting the impact of R&D dynamics on firm growth in the context of an economic crisis. This study examines the effects of R&D dynamics on firm growth during and after the global financial crisis of 2008–2009. Based on firm-level data, we construct a balanced panel for 1,137 firms in the global petrochemical industry. Our findings indicate that firms with R&D persistency show higher growth during and after the crisis, regardless of firm size. R&D persistency has a higher impact on firm growth in large firms than in smaller ones. In addition, R&D persistency has greater influence than the level of R&D investment. Firms should pursue non-cyclical and consistent R&D strategies with a long-term perspective, especially in high uncertainty conditions.

scholarly journals Inward Investment and Market Structure in an Open Developing Economy: A Case of India’s Manufacturing Sector

2011 ◽  
Vol 2 (6) ◽  
pp. 286-297 ◽  
Author(s):  
Jatinder Singh
Keyword(s):  
Market Structure ◽  
Manufacturing Sector ◽  
Market Concentration ◽  
Economic Activities ◽  
Firm Level ◽  
Long Run ◽  
Level Data ◽  
Country Market ◽  
Regression Techniques ◽  
Policy Measures

India announced series of liberalization measures since mid 1980s that inter-alia led to an unprecedented increase in the inflow of foreign direct investment (FDI). Evidence suggests that the rising inflows of FDI have influence on host country market structure though the direction is uncertain. Analytically, market structure has implications on the long run growth path of an economy through its effect on the allocation of economic resources among various economic activities including innovation. In this context, the objective of this paper is to analyze the bearing of FDI on market concentration with special reference to India’s manufacturing industries during the post-reform period. The study made use of firm level and product level data and panel regression techniques to fulfill the objective. The estimated model has shown a positive and significant influence of FDI on market concentration. If the result of the study is any indication, the increased inflow of FDI is likely to make India’s manufacturing sector more concentrated and calls for policy measures to mitigate undesirable outcomes of FDI inflows.

HETEROGENEOUS EFFECTS OF CREDIT ACCESS ON FORMAL AND INFORMAL FIRM GROWTH: EMPIRICAL EVIDENCE FROM VIETNAM

2020 ◽  
Vol 65 (05) ◽  
pp. 1185-1211 ◽  
Author(s):  
TRINH QUANG LONG ◽  
PETER JOHN MORGAN ◽  
MINH BINH TRAN
Keyword(s):  
Fixed Effects ◽  
Firm Growth ◽  
Causal Effect ◽  
High Growth ◽  
Firm Level ◽  
Credit Access ◽  
Access To Credit ◽  
Heterogeneous Effects ◽  
Level Data ◽  
Growth Firms

This paper examines the causal effect of credit access on firm growth (measured by employment growth), using a unique micro-, small-, and medium-sized firm-level data collected every two years in Vietnam from 2005 to 2013. The results obtained from fixed-effects (FE) and FE with instrumental variable estimators show that firms with credit access experience a higher growth than firms without credit access. We also find that access to credit is positively associated with both formal and informal firm growth, but the results for formal firms seem to be driven by some high growth firms (and rapidly shrinking firms). The effect of credit access on firm growth is also heterogeneous by firm size and firm age in both types of firms.

Efficiency and Price Effects of Mergers in European Union's Trade and Manufacturing Sectors

2019 ◽  
Vol 10 (4) ◽  
pp. 993
Author(s):  
Ozana NADOVEZA JELIĆ ◽  
Marko DRUŽIĆ
Keyword(s):  
Manufacturing Sector ◽  
National Level ◽  
Economic Activities ◽  
Firm Level ◽  
Welfare Losses ◽  
Level Data ◽  
Price Effects ◽  
Manufacturing Sectors ◽  
The Difference ◽  
Efficiency Effects

There are two basic tendencies operating simultaneously in every merger case: i) welfare gains due to efficiency related price reductions and ii) welfare losses associated with rising market power and resulting higher prices for consumers. The question of which will prevail is theoretically ambiguous, and consequently has to be settled empirically. The main objectives of this paper are to explore the effects of mergers on efficiency of consolidated firms, and to study their effects on prices in the trade and manufacturing sectors. To explore the effects of mergers on efficiency and prices we employ both a micro and macro approach by relying on firm-level data in the analysis of efficiency effects and on national-level data in the evaluation of price effects of mergers by using the Difference-in-Difference (DiD) approach on a sample of merger cases regulated by the European Commission (EC) during the 2010-2013 period. The DiD based results show that consolidated firms performed better than their competitors in the second year following the merger. Estimated efficiency gains seem to be led by efficiency growth of merged firms in the manufacturing sector. At the same time, we find evidence that compared to their unaffected counterparts, countries and economic activities in which the consolidation took place experienced a higher associated inflation in the year of the merger. Therefore, our results suggest that price effects unfold in the year when the merger is realized while efficiency effects occur with a delay of two years.  

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