Do Country-level Creditor Protections Affect Firm-level Debt Structure Concentration?

Abstract We study the effects of country-level creditor protections on the firm-level choice of debt structure concentration. Using data from 46 countries, we show that firms form more concentrated debt structures in countries with stronger creditor protection. We propose a trade-off framework of optimal debt structure and show that in strong creditor rights regimes, the benefit of forming concentrated structures outweighs its cost. Because strong creditor protections increase liquidation bias, firms choose concentrated debt structures to improve the probability of successful distressed debt renegotiations. Firms with ex-ante higher bankruptcy costs, including those with higher intangibility, cash flow volatility, R&D expenses, and leverage exhibit stronger effects. Firms with restricted access to capital are also affected more. A difference-in-differences analysis of firms’ debt structure responses to creditor rights reforms confirms the cross-country results. Our findings are robust to alternative settings and a battery of robustness checks.

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National Culture and Corporate Governance

Journal of International Accounting Research ◽

10.2308/jiar-51346 ◽

2015 ◽

Vol 15 (3) ◽

pp. 67-96 ◽

Cited By ~ 15

Author(s):

Hong K. Duong ◽

Helen Kang ◽

Stephen B. Salter

Keyword(s):

Corporate Governance ◽

National Culture ◽

Hierarchical Linear Modeling ◽

Economic Institutions ◽

Linear Modeling ◽

Firm Level ◽

Country Level ◽

Preference Index ◽

Cross Country ◽

Robust Evidence

ABSTRACT This paper examines the influence of national culture on corporate governance. We postulate that national culture can shape the contracting environments by serving as an informal constraint that affects incentives and choices in corporate governance. We hypothesize that national culture can explain cross-country variations in corporate governance after controlling for legal, political, financial, and economic institutions. We develop a Rule Preference Index as a proxy of national culture for a sample of 12,909 firm-year observations from 41 countries. Employing a hierarchical linear modeling approach to isolate the effects of firm-level and country-level variables, we find robust evidence that firms (and countries) with a higher Rule Preference Index tend to have better corporate governance.

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Low Agricultural Potential Exacerbates the Effect of Temperature on Civil Conflicts

10.21203/rs.3.rs-78395/v1 ◽

2020 ◽

Author(s):

Jonathan Goyette ◽

Maroua Smaoui

Keyword(s):

Policy Implications ◽

Effect Of Temperature ◽

Control Group ◽

Civil Conflicts ◽

Country Level ◽

Agricultural Potential ◽

Causal Impact ◽

Potential Impact ◽

Cross Country ◽

Using Data

Abstract Using data on 172 countries from 1946 until 2014, this paper examines how time-wise variations in temperature at the country level interacted with cross-country variations in agricultural potential impact the incidence of civil conflicts. In the analysis, countries exhibiting high agricultural potential act as a control group for countries with a lower agricultural potential and variations in temperature act as a treatment from one period to the next. This allows identifying the causal impact of the interaction on conflict incidence. We find that deviations in annual or decennial temperature are conducive to a higher probability of being in conflict in countries with lower agricultural potential. The findings have important policy implications to predict, avoid or mitigate conflicts related to climate change.

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Risk-Antecedents of Firms and Strategic Mediators – New Evidence from a Cross-Country Analysis

American Business Review ◽

10.37625/abr.24.1.3-35 ◽

2021 ◽

Vol 24 (1) ◽

pp. 3-35

Author(s):

Ranjan DasGupta ◽

Monika Dhochak

Keyword(s):

Corporate Governance ◽

Emerging Market ◽

Empirical Literature ◽

Mediating Effects ◽

Firm Risk ◽

Firm Level ◽

Country Level ◽

Country Analysis ◽

Cross Country ◽

New Evidence

We examine the strength and nature of firm aspiration and expectation as strategic mediators in the association of risk antecedents and firm risk, after exploring the possible impact of such antecedents on firm aspiration, and firm aspiration’s preliminary influence on firm risk. Empirical literature is mostly silent about risk antecedents of firms in an emerging market or cross-country context, and to the best of our knowledge, the mediators proposed in this study are yet to be explored. We report strong significant positive mediating effects of firm aspiration and expectation in association of risk antecedents and firm risk. Our results also validate that all studied risk antecedents, except corporate governance- composition, significantly influence aspiration and expectation mediators and firm risk in line with our hypotheses. Our results also hold true after controlling for firm-level and country-level heterogeneities and conducting two additional robustness tests.

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Will Blockchain Bring an End to Corruption?

Research Anthology on Blockchain Technology in Business, Healthcare, Education, and Government ◽

10.4018/978-1-7998-5351-0.ch100 ◽

2021 ◽

pp. 1846-1856

Author(s):

Kibum Kim ◽

Taewon Kang

Keyword(s):

Economic Benefit ◽

Third Party ◽

Data Governance ◽

Firm Level ◽

Security Issues ◽

Country Level ◽

Blockchain Technology ◽

Multiple Servers ◽

The World ◽

Cross Country

Blockchain technology is an electronic ledger of digital records that is distributed over a network of computers rather than located on single or multiple servers. As the technology is by itself transparent and secure even without a trusted third party involvement, many applications are being developed as a means of eliminating corruption around the world. This article examines how the blockchain technology could be used to curb corruption and take integrity to higher standards at a firm level, within-country level and cross-country level. Possible risks and challenges related to the technology were identified and found that without considering the data governance and security issues, the blockchain technology may not always lead to a socio-economic benefit.

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Inventory in Times of War

Management Science ◽

10.1287/mnsc.2020.3801 ◽

2021 ◽

Author(s):

Andres F. Jola-Sanchez ◽

Juan Camilo Serpa

Keyword(s):

Operations Management ◽

Difference In Differences ◽

Firm Level ◽

Rebel Groups ◽

Related Risk ◽

Physical Assets ◽

Uncertain Future ◽

Using Data ◽

Conflict Intensity ◽

Identification Strategy

Using data from 38,916 businesses in war-torn Colombia and from 5,138 attacks by the two rebel groups, FARC and ELN, we study how firms manage inventory during civil war. We obtain exogenous variation in the conflict intensity via a difference-in-differences model, which hinges on the peace process between Colombia’s government and FARC. Relying on this identification strategy, we hypothesize and show that war causes two effects on firm-level inventories. First, it leads firms to replace physical assets (inventory) with fungible assets (cash), causing them to operate with an oversecured financial buffer, but a fragile operational buffer. Second, this inventory reduction occurs mostly in unprocessed inventories (finished-goods inventories are insensitive to violence), meaning that, although war-torn businesses are equipped to fulfill planned orders, they become inflexible at handling uncertain future demand. We then show that the magnitude of these effects is highly contingent on the firm’s position in the supply chain, its proximity to distribution markets, and the type of attacks it is subject to. We then propose policies to address war-related risk in supply chains. This paper was accepted by Vishal Gaur, operations management.

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Will Blockchain Bring an End to Corruption?

International Journal of Information Systems and Social Change ◽

10.4018/ijissc.2019040103 ◽

2019 ◽

Vol 10 (2) ◽

pp. 35-44

Author(s):

Kibum Kim ◽

Taewon Kang

Keyword(s):

Economic Benefit ◽

Third Party ◽

Data Governance ◽

Firm Level ◽

Security Issues ◽

Country Level ◽

Blockchain Technology ◽

Multiple Servers ◽

The World ◽

Cross Country

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Confucius Institute and the Completion of Chinese Cross-Border Acquisitions

Sustainability ◽

10.3390/su11185088 ◽

2019 ◽

Vol 11 (18) ◽

pp. 5088 ◽

Cited By ~ 3

Author(s):

Ouyang ◽

Keyword(s):

Cultural Distance ◽

Macro Level ◽

Host Countries ◽

Firm Level ◽

Confucius Institute ◽

Cross Border ◽

Country Level ◽

Using Data ◽

Global Platform

As a global platform for cultural exchange, the Confucius Institute (CI) has effectively promoted sustainable development among countries and regions. However, existing literature has mostly drawn insights from the national macro-level to study the roles played by CIs, whereas the potential of CIs to influence corporate behaviors has not received extensive attention. This study expands the research on CIs from the national macro-level to the enterprise micro-level by exploring the effect of CIs on the likelihood of acquisition completion. Using data from 1695 Chinese cross-border acquisitions from 2006 to 2017, we find that establishment of CIs can significantly increase acquisition completion likelihood. Furthermore, the level of influence of CIs on acquisition completion depends on country- and firm- level factors. At the country level, the positive effect of CIs on completion likelihood intensifies when cultural distance between host countries and China is great. At the firm level, the acquirer’s past cross-border acquisition experience moderates the effects of CIs, which are more beneficial to firms with no previous successes. In addition, we have made some further analyses, and find that the presence of CIs not only helps to increase the likelihood of acquisitions completion, but also helps to shorten the acquisition durations. The role of CIs in cross-border acquisition completion likelihood do not depend on the types of Chinse enterprises, which indicates that CIs, unlike government agencies, do not offer additional help for SOEs.

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The partisan ties of lobbying firms

Research & Politics ◽

10.1177/2053168019877039 ◽

2019 ◽

Vol 6 (3) ◽

pp. 205316801987703 ◽

Cited By ~ 2

Author(s):

Alexander C. Furnas ◽

Michael T. Heaney ◽

Timothy M. LaPira

Keyword(s):

Republican Party ◽

The United States ◽

Difference In Differences ◽

Firm Level ◽

Majority Party ◽

Organized Interests ◽

Financial Benefits ◽

Partisan Theory ◽

Using Data ◽

Financial Losses

This article examines lobbying firms as intermediaries between organized interests and legislators in the United States. It states a partisan theory of legislative subsidy in which lobbying firms are institutions with relatively stable partisan identities. Firms generate greater revenues when their clients believe that firms’ partisan ties are valued highly by members of Congress. It hypothesizes that firms that have partisan ties to the majority party receive greater revenues than do firms that do not have such ties, as well as that partisan ties with the House majority party lead to greater financial returns than do partisan ties to the Senate majority party. These hypotheses are tested using data available under the Lobbying Disclosure Act from 2008 to 2016. Panel regression analysis indicates that firms receive financial benefits when they have partisan ties with the majority party in the House but not necessarily with the Senate majority party, while controlling for firm-level covariates (number of clients, diversity, and organizational characteristics). A difference-in-differences analysis establishes that Democratically aligned lobbying firms experienced financial losses when the Republican Party reclaimed the House in 2011, but there were no significant differences between Republican and Democratic firms when the Republicans reclaimed the Senate in 2015.

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Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

American Economic Journal Economic Policy ◽

10.1257/pol.20170504 ◽

2019 ◽

Vol 11 (1) ◽

pp. 38-63 ◽

Cited By ~ 5

Author(s):

Youssef Benzarti ◽

Dorian Carloni

Keyword(s):

Value Added ◽

Consumption Tax ◽

Difference In Differences ◽

Firm Level ◽

Employment Effects ◽

Level Data ◽

Price Effects ◽

Firm Level Data ◽

Material Goods ◽

Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

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