Financing manufacturers for investing in Industry 4.0 technologies: internal financing vs. External financing

2021 ◽  
pp. 1-17
Author(s):  
Majid Azadi ◽  
Zohreh Moghaddas ◽  
Reza Farzipoor Saen ◽  
Farookh Khadeer Hussain
Keyword(s):  
Industry 4.0 ◽  
External Financing ◽  
Internal Financing

scholarly journals Financing and pricing strategies of construction supply chain under capital constraint

2021 ◽  
Vol 336 ◽  
pp. 09004
Author(s):  
Yuxin Wen ◽  
Linyi Wu ◽  
Fengmin Yao
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Stackelberg Game ◽  
Distribution Model ◽  
Pricing Strategies ◽  
External Financing ◽  
Pricing Decision ◽  
Decentralized Decision Making ◽  
Internal Financing ◽  
Decision Making Model

Affected by factors such as cost, the financial constraints faced by the supply chain are becoming more and more severe. This paper constructs a financing and pricing decision-making model for the construction supply chain under capital constraints, and uses Stackelberg game theory to analyze and obtain the best financing and pricing strategy for the construction supply chain under the internal and external financing modes. The study found that when centralized decision-making is adopted, there is a profit distribution model that makes the profits obtained by construction developers and contractors greater than the profits obtained in decentralized decision-making; the internal financing model of the construction supply chain is better than external financing, and can enable the construction supply chain get higher profits.

scholarly journals Study on the Selection Strategy of Supply Chain Financing Modes Based on the Retailer’s Trade Grade

2018 ◽  
Vol 10 (9) ◽  
pp. 3045 ◽  
Author(s):  
Jianjun Yu ◽  
Dan Zhu
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Selection Strategy ◽  
External Financing ◽  
Market Demand ◽  
Bankruptcy Risk ◽  
Financing Cost ◽  
Financing Mode ◽  
Supply Chain Financing ◽  
Internal Financing

In the supply chain financing (SCF) system composed of a capital-constrained retailer, a supplier and a commercial bank, we design two different limited financing modes (internal financing and external financing) based on the retailer’s collateral assets. A newsvendor-like retailer has a single opportunity to order goods from a supplier to satisfy future uncertain demand. In the presence of bankruptcy risk for the retailer, we model their strategic interaction as a Stackelberg game with the supplier as the leader and analyze the optimal decisions for each participant. Regardless of which financing mode is chosen, the capital-constrained retailer orders fewer goods if the financing cost is relatively high. In addition, when the market demand obeys the uniform distribution, if the retailer possesses more collateral assets, he will enjoy a lower loan interest rate and increase order quantity gradually. Moreover, compared with the internal financing mode, each participant obtains the larger expected profits under the external financing mode.

scholarly journals Internal or External Financing: New Evidence on Investor Reaction in Indonesian Manufacturing Firms

2021 ◽  
Vol 22 (2) ◽  
Author(s):  
Rifki Fikasari ◽  
Yustrida Bernawati
Keyword(s):  
Order Theory ◽  
Manufacturing Firms ◽  
Least Square ◽  
Internal Source ◽  
External Financing ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Internal Financing ◽  
Retained Earnings ◽  
Investor Reaction

Research aims: This study aims to examine investor reaction to financing sources due to its pecking order theory hierarchy.Design/Methodology/Approach: This research used a purposive sampling method of manufacturing listed firms on the Indonesia Stock Exchange, which were tested utilizing Ordinary Least Square and SPSS software.Research findings: The results showed that the investor reacted negatively to internal financing measured by the firm's retained earnings. Conversely, this research found that investors reacted positively to external financing in measurement, leverage, and equity issuance. Furthermore, the results revealed that leverage had a more positive reaction than equity issuance.Theoretical contribution/Originality: This research contributes to the pecking order theory literature to test how investor reacts to which source of financing is chosen due to its hierarchy. There is evidence that Indonesian manufacturing firms had inadequate internal financing, which made investors react negatively, and investors tended to choose leverage over equity as external financing.Practitioner/Policy implication:  Our study contributes to the firm's management to carefully choose financing sources to fulfill the investor interest. This research also suggests that the firm produces more profit to provide adequate internal source financing as the research results showed that investors preferred internal than external financing. Furthermore, when there is inadequate internal financing, the firm's management should use leverage over equity.Research limitation/Implication: First, our study employed total liability rather than debt to leverage measurement. Second, our study only provided evidence of negative reactions to show that the firm failed to provide adequate internal financing sources rather than examined the level of adequate internal financing sources.

scholarly journals Research on the Impact of Financing Liquidity on Risk-taking of Commercial Banks

2019 ◽  
Vol 267 ◽  
pp. 04012
Author(s):  
Yumeng Bu
Keyword(s):  
Risk Taking ◽  
Financial Crises ◽  
Commercial Banks ◽  
Mutual Influence ◽  
Risk Exposure ◽  
External Financing ◽  
Internal Financing ◽  
The Impact ◽  
The Relationship ◽  
Bank Risks

Insufficient liquidity and maturity mismatches lead to bank risks and financial crises. After Basel III included the net stable funding ratio into regulatory indicators, the relationship between the liquidity indicators represented by the net stable capital ratio and the bank's risk exposure triggered discussions among domestic and foreign scholars. This paper uses the data of China's commercial banks, mainly discussing the mutual influence of internal financing liquidity and external financing liquidity on the risk exposure of banks, and then putting forward some suggestions on how to reduce bank risks through financing liquidity.

scholarly journals Efek Waktu Pasar dan Kebijakan Investasi terhadap Struktur Modal

2014 ◽  
Vol 5 (2) ◽  
Author(s):  
Winston Pontoh
Keyword(s):  
Capital Structure ◽  
Capital Market ◽  
Stock Exchange ◽  
Market Timing ◽  
External Condition ◽  
Investment Policy ◽  
External Financing ◽  
Pecking Order ◽  
Internal Financing ◽  
Using Data

The capital structure policy by an entity is still a question specially in the context of investment policy and if related to market timing. The question is still exist because the entity faced by two options of financing which are internal financing (capital) and external financing (debt). This study is using data from the samples of 241 entities listed in Indonesia Stock Exchange in period of 2009 till 2012 making the total of observed data are 964. Conducting multiple regression analysis, this study conclude that, the effect of pecking order, trade off and market timing are not absolute for all conditions of entities, because the entities will take decision for capital structure policy based on its conditions such as internally or externally. In this case, the external condition is referring to capital market.

scholarly journals RESEARCH ON FINANCING ECOLOGY AND FINANCING EFFICIENCY OF STRATEGIC EMERGING INDUSTRIES IN CHINA

2019 ◽  
Vol 20 (2) ◽  
pp. 311-329 ◽  
Author(s):  
Ke Xu ◽  
Chengxuan Geng ◽  
Xiaoshu Wei
Keyword(s):  
Financial Development ◽  
Continuous Improvement ◽  
Index System ◽  
External Financing ◽  
Role Of Government ◽  
Endogenous Factors ◽  
Emerging Industries ◽  
Internal Financing ◽  
Full Consideration

After integrating external ecological and endogenous factors of the development of the industry, the paper builds a financing ecology index system, and analyses the financing ecology of strategic emerging industries in recent years. Then the paper further analyses the influence of external and internal financing ecology on financing efficiency. The results show that the financing ecology of the strategic emerging industries, external financing ecology in particular, is in the continuous improvement. The financing efficiency is significantly positively correlated with the macro-economy level and the internal financing ecology, and significantly negatively correlated with the role of government. There is a positive but non-significant correlation between financial development and financing efficiency, meanwhile a negative and non-significant correlation between credit environment and financing efficiency. The internal and external financing ecology can be replaced to some extent. Therefore, the strategic emerging industries should give full consideration to the synergistic optimization of the endogenous factors and external financing ecology so as to improve the financing efficiency.

Growing SMEs and internal financing: the role of business practices

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nazik Fadil ◽  
Josée St-Pierre
Keyword(s):  
Financial Management ◽  
Management Practices ◽  
Growth Stages ◽  
Business Practices ◽  
External Financing ◽  
Critical Question ◽  
Content Type ◽  
Wide Range ◽  
Internal Financing ◽  
And Control

PurposeThe purpose of this paper is to identify business practices that may promote internal financing of growing SMEs. The authors expand the literature on entrepreneurial finance that reduces business practices to either financial management or bootstrapping, by exploring all management practices that may have an impact on liquidities. This study enriches the literature on business practices. This is an important consideration for managers of SMEs who intend to preserve their financial independence and their capacity to survive different crises.Design/methodology/approachThe empirical study involved a sample of 235 growing Canadian SMEs. The sample was extracted from a private database using a questionnaire that covered a wide range of business practices. Variance testing of business practices between SMEs with a line of credit and those without (and lower overall debt) was supplemented by a logistic regression.FindingsSMEs which make use of efficiency-promoting technology, carry out preventive maintenance and control their costs and turnover during their growth are more inclined to use less external financing.Originality/valueThis is the first study that associates business practices, beyond bootstrapping, with financing and which answers a critical question posed by SME executives on how to preserve their financial and decision-making autonomy through growth stages. In addition, the desire to retain control of the company does not compel the SME manager to limit the size of the company.

scholarly journals The Order Quantity Decision of Newsboy Retailer with Financing

2014 ◽  
Vol 2 (4) ◽  
pp. 358-365
Author(s):  
Zhonghua Ma
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Stochastic Demand ◽  
Optimal Order ◽  
External Financing ◽  
Order Quantity ◽  
Revenue Model ◽  
Internal Financing ◽  
The Impact ◽  
Inventory Financing

AbstractWe analyze the retailer’s optimal order with capital constraint under stochastic demand. We consider the impact of external financing, that is inventory financing, and the internal financing, that is trade credit, on the order strategy of retailer separately. We establish revenue model of retailer and solve, and give revenue of retailer and supplier respectively. Finally, we give the impact of own funds on the retailer’s order quantity, retailer’s revenue, supplier’s revenue, as well as the impact on the overall revenue gains of the supply chain. And some analysis and statement are also given in the end.

scholarly journals Corporate Carbon Disclosure, Financing Structure and Total Factor Productivity: Evidence from Chinese Heavy Polluting Listed Corporates

2021 ◽  
Author(s):  
Sai Yuan ◽  
Xiongfeng Pan
Keyword(s):  
Total Factor Productivity ◽  
Mediating Effect ◽  
External Financing ◽  
Low Carbon ◽  
Factor Productivity ◽  
Disclosure Quality ◽  
Financing Structure ◽  
Financing Costs ◽  
Internal Financing

Abstract Low-carbon economy has become the current global economic development trend, and Corporate carbon disclosure has attracted more and more attention from scholars and investors. This paper creatively explores the mechanism of corporate carbon disclosure quality on total factor productivity with financing structure as a mediating variable. The content analysis method is used to construct a carbon disclosure evaluation index system that is suitable for Chinese companies. Through the mediating effect model and Sobel test, the internal mechanism of carbon disclosure quality affecting total factor productivity is analyzed, with Chinese heavy polluting listed corporates from 2015 to 2018 as research samples. The empirical results show that, Firstly, the Quality of carbon disclosure has a positive effect on the improvement of total factor productivity. The effect of monetary carbon disclosure quality on the improvement of total factor productivity is higher than that of non-monetary carbon disclosure quality. Secondly, the financing structure has a mediating effect on the quality of carbon disclosure and total factor productivity, and the mediating effect of internal financing capabilities is better than those of external financing costs. Finally, external financing costs and internal financing capabilities have mediating effects in both heterogeneous carbon disclosure quality and total factor productivity. The mediating effect of internal financing capabilities is significantly higher than the mediating effect of external financing costs. Meanwhile, the effect of monetary carbon disclosure quality on total factor productivity indirectly through internal financing capabilities is higher than that of non-monetary carbon disclosure quality.

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