The choice of financing with public debt versus private debt: New evidence from Japan after critical binding regulations were removed

2007 ◽  
Vol 19 (4) ◽  
pp. 393-424 ◽  
Author(s):  
Yoko Shirasu ◽  
Peng Xu
Keyword(s):  
Public Debt ◽  
Private Debt ◽  
Critical Binding ◽  
New Evidence

scholarly journals Debt Origin and Investment Efficiency from Korea

2020 ◽  
Vol 8 (3) ◽  
pp. 47
Author(s):  
Heung Joo Jeon ◽  
Hyun Min Oh
Keyword(s):  
Financial Reporting ◽  
Public Debt ◽  
Negative Relationship ◽  
Optimal Investment ◽  
Capital Gains ◽  
Investment Efficiency ◽  
Private Debt ◽  
Significant Negative Relationship ◽  
Private And Public

This study empirically analyzes the effect of debt origin on investment efficiency. According to previous studies that report that the quality of financial reporting may vary depending on the origin of the debt, the empirical analysis predicted that the effects of the origin of the debt on investment efficiency would be differential. Debt origin was divided into private and public debt. The analysis results of this study are as follows. First, there is a significant negative relationship between the private debt and investment efficiency, while there is a significant positive relationship between public debt and investment efficiency. This means that capital gains under public debt may be more profitable to managers by improving the quality of their accounting information than those under private debt. This is in line with the previous research which found that, when financing with public debt, the earnings management is reduced and accounting transparency is high. This study focuses on the origin of debt as a determinant of investment efficiency and analyzes the level of investment efficiency according to the origin of debt. We examine the sustainability of firms from the perspective of investment efficiency, such as raising capital and selecting optimal investment options. The results of this study suggest that the level of incentives and investment efficiency of managers may be differentiated depending on the origin of the debt.

scholarly journals EFFECT OF EXTERNAL DEBT LIABILITY ON ECONOMIC GROWTH IN KENYA

2021 ◽  
Vol 6 (1) ◽  
pp. 23-42
Author(s):  
Joshua Matanda ◽  
Samuel Mbalu
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
World Bank ◽  
Public Debt ◽  
External Debt ◽  
Debt Service ◽  
Series Data ◽  
National Bureau ◽  
Private Debt ◽  
Independent Variables

Purpose: The purpose of the study was to evaluate the effect of external debt liability on economic growth in Kenya. Materials and Methods: The descriptive research design was adopted. The target population was three institutions: The National Treasury, Kenya National Bureau of Statistics, and the World Bank. The study used time series data. The designated sample for this study covered a period of 43 years (1977–2019). Secondary data was used in this study. The data collected was on GDP of Kenya between 1977 and 2019, External public debt in terms of US dollars from 1977 to 2019, External private debt from 1977 and 2019 and external debt service payments from 1977 to 2019, all in US dollars. A data collection sheet was used to collect the data on the four variables. World Bank and World Development Indicator economic Meta data and published data by Central Bank of Kenya and the Kenya National Bureau of Statistics were the source of data for this study. The study used Eviews version 10 for analyzing and presenting study findings. The study employed multivariate time series and panel data regression analysis. The model employed GDP as a measure of economic growth and external public debt, external private debt, and external debt service payment as its main independent variables. Results:  The study found out that only the external private debt and the debt service payment showed bilateral causal relationship. External public debt and external private debt had a positive and significant effect on the GDP, indicating that external debt promotes economic growth in Kenya. The external debt service payment showed a negative and a significant effect on the GDP as well. The model explained 97% variability of the GDP as explained by the three independent variables combined. The 3% is attributed to other factors, not included in this study. Unique contribution to theory, practice and policy: The study recommends a more robust multivariate model to be employed to include more macro-economic variables to explain economic growth. A decade-to-decade comparison can also be done to compare the effects of the external debt on Kenyan economic growth in different time intervals. Fiscal and monetary policies should be reviewed to encourage more domestic and foreign investments and discourage external borrowing to fund budget deficits or projects with low or no returns.

scholarly journals THE JANUS-FACED NATURE OF DEBT: RESULTS FROM A DATA-DRIVEN COINTEGRATED SVAR APPROACH

2018 ◽  
Vol 24 (1) ◽  
pp. 24-54
Author(s):  
Mattia Guerini ◽  
Alessio Moneta ◽  
Mauro Napoletano ◽  
Andrea Roventini
Keyword(s):  
Public Debt ◽  
Economic Activity ◽  
Ad Hoc ◽  
Positive Impact ◽  
Data Driven ◽  
Private Debt ◽  
Structural Shocks ◽  
Mortgage Debt ◽  
Vector Autoregressive ◽  
The Impact

In this paper, we investigate the causal effects of public and private debts on US output dynamics. We estimate a battery of Cointegrated Structural Vector Autoregressive models, and we identify structural shocks by employing Independent Component Analysis, a data-driven technique which avoids ad-hoc identification choices. The econometric results suggest that the impact of debt on economic activity isJanus-faced. Public debt shocks have positive and persistent influence on economic activity. In contrast, rising private debt has a milder positive impact on gross domestic product, but it fades out over time. The analysis of the possible transmission mechanisms reveals that public debtcrowds inprivate consumption and investment. In contrast, mortgage debt fuels consumption and output in the short-run, but shrinks them in the medium-run.

scholarly journals Is Public Debt Harmful Towards Economic Growth? New Evidence from Sri Lanka

Staff Studies ◽  
2019 ◽  
Vol 49 (1) ◽  
pp. 51
Author(s):  
Thilak Ranjeewa Priyadarshana
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Public Debt ◽  
New Evidence

scholarly journals Cyprus

2019 ◽  
Vol 19 (151) ◽  
Author(s):  
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Direct Investment ◽  
Sharp Reduction ◽  
Private Debt ◽  
Public And Private ◽  
Balance Sheets ◽  
Bank Balance Sheets ◽  
Investment Grade ◽  
The Eu

Economic growth is gradually decelerating but remains strong, buoyed by the services and construction sectors, partly financed with foreign direct investment. While employment is picking up, wage pressures and inflation remain low. A large fiscal surplus is helping to lower public debt after a sizable one-off increase related to the sale of Cyprus Cooperative Bank (CCB) last year. The removal of CCB’s non-performing loans (NPLs) and securitization of a large NPL portfolio has led to a sharp reduction in NPLs, earning Cyprus a sovereign rating upgrade back to investment grade status. Nevertheless, NPLs are still among the highest in the EU, public and private debt levels remain elevated and efforts to clean up bank balance sheets and build capital buffers are ongoing.

scholarly journals The Greek crisis: Causes and implications

2010 ◽  
Vol 57 (4) ◽  
pp. 391-404 ◽  
Author(s):  
Georgios Kouretas ◽  
Prodromos Vlamis
Keyword(s):  
Public Debt ◽  
Sovereign Debt ◽  
Budget Deficit ◽  
Debt Crisis ◽  
Fiscal Crisis ◽  
Mortgage Loan ◽  
The European Union ◽  
Private Debt ◽  
Subprime Mortgage ◽  
The Us

This paper presents and critically discusses the origins and causes of the Greek fiscal crisis and its implications for the euro currency as well as the SEE economies. In the aftermath of the 2007-2009 financial crisis the enormous increase in sovereign debt has emerged as an important negative outcome, since public debt was dramatically increased in an effort by the US and the European governments to reduce the accumulated growth of private debt in the years preceding the recent financial turmoil. Although Greece is the country member of the eurozone that has been in the middle of this ongoing debt crisis, since November 2009 when it was made clear that its budget deficit and mainly its public debt were not sustainable, Greece?s fiscal crisis is not directly linked to the 2007 US subprime mortgage loan market crisis. As a result of this negative downturn the Greek government happily accepted a rescue plan of 110 billion euros designed and financed by the European Union and the IMF. A lengthy austerity programme and a fiscal consolidation plan have been put forward and are to be implemented in the next three years.

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