Does opening high-speed railways affect the cost of debt financing? A quasi-natural experiment

2020 ◽  
Vol 10 (4) ◽  
pp. 473-496
Author(s):  
Hongling Guo ◽  
Keping Wu
Keyword(s):  
High Speed ◽  
Geographical Location ◽  
Debt Financing ◽  
Cost Of Debt ◽  
High Speed Railway ◽  
Content Type ◽  
Financing Cost ◽  
Debt Market ◽  
The Cost ◽  
The Impact

PurposeThis study aims to investigate how opening high-speed railways affects the cost of debt financing based on China's background.Design/methodology/approachUsing panel data on Chinese listed firms from 2008 to 2017, this study constructs a quasi-natural experiment and adopts a difference-in-difference model with multiple time periods to empirically examine the relation between the high-speed railway openings and debt financing cost.FindingsOur results show that opening high-speed railways reduces the cost of debt financing, and this negative correlation is more significant in non-state firms, firms with weaker internal control, and firms that hire non-Big Four auditors. Besides, we explore the impact mechanisms and find that opening high-speed railways improves analyst attention, institutional investor participation, and information disclosure quality, which in turn lowers the cost of debt financing.Research limitations/implicationsThe results imply that the opening of high-speed railways helps to alleviate the information asymmetry and adverse selection between firms and creditors and ultimately reduces the cost of corporate debt financing.Practical implicationsThis paper can inform firms and stakeholders about the impact of opening high-speed railways on debt financing cost: it improves the information environment, reduces the geographical location restrictions of debt financing, ensures the reasonable pricing of corporate debt, and thus promotes the healthy and sound development of the debt market.Originality/valueThis paper provides theoretical support and empirical evidence for the impact of infrastructure construction on the information environment of the debt market in China, which enriches the research on the “high-speed railway economy.” In addition, as an exogenous event, the opening of high-speed railways instantly shortens the time distance between firms and external stakeholders, which gives us a natural environment to conduct empirical research, thus providing a new perspective for financial research on firms' geographical location.

Impacts of high-speed railway on the industrial pollution emissions in China

Kybernetes ◽  
2020 ◽  
Vol 49 (11) ◽  
pp. 2713-2735 ◽  
Author(s):  
Xiaomin Fan ◽  
Yingzhi Xu ◽  
Yongqing Nan ◽  
Baoli Li ◽  
Haiya Cai
Keyword(s):  
Environmental Effects ◽  
Industrial Pollution ◽  
High Speed ◽  
Assessment Method ◽  
Economic Effects ◽  
High Speed Railway ◽  
Central Cities ◽  
Content Type ◽  
Pollution Emissions ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of high-speed railway (HSR) on industrial pollution emissions using the data for 285 prefecture-level cities in China from 2004 to 2016. Design/methodology/approach The research method used in this paper is the multi-period difference-in-differences (DID) model, which is an effective policy effect assessment method. To further address the issue of endogeneity, the DID integrated with the propensity score matching (PSM-DID) approach is employed to eliminate the potential self-selection bias. Findings The results show that the HSR has significantly reduced industrial pollution emissions, which is validated by several robustness tests. Compared with peripheral cities, HSR exerts a greater impact on industrial pollution emissions in central cities. In addition, the mechanism test reveals that the optimised allocation of inter-city industries is an important channel for HSR to mitigate industrial pollution emissions, and this is closely related to the location of HSR stations. Originality/value Previous studies have paid more attention to evaluating the economic effects of HSR, however, most of these studies overlook its environmental effects. Consequently, the impact of HSR on industrial pollution emissions is led by using multi-period DID models in this paper, in which the environmental effects are measured. The results of this paper can provide a reference for the pollution reduction policies and also the coordinated development of economic growth and environmental quality.

scholarly journals Examining partial proportional odds model in analyzing severity of high-speed railway accident

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jing Wang ◽  
Yinghan Wang ◽  
Yichuan Peng ◽  
Jian John Lu
Keyword(s):  
High Speed ◽  
Proportional Odds Model ◽  
Impact Factors ◽  
Proportional Odds ◽  
High Speed Railway ◽  
Severity Level ◽  
Content Type ◽  
Factors Affecting ◽  
Partial Proportional Odds Model ◽  
The Impact

Purpose The operation safety of the high-speed railway has been widely concerned. Due to the joint influence of the environment, equipment, personnel and other factors, accidents are inevitable in the operation process. However, few studies focused on identifying contributing factors affecting the severity of high-speed railway accidents because of the difficulty in obtaining field data. This study aims to investigate the impact factors affecting the severity of the general high-speed railway. Design/methodology/approach A total of 14 potential factors were examined from 475 data. The severity level is categorized into four levels by delay time and the number of subsequent trains that are affected by the accident. The partial proportional odds model was constructed to relax the constraint of the parallel line assumption. Findings The results show that 10 factors are found to significantly affect accident severity. Moreover, the factors including automation train protection (ATP) system fault, platform screen door and train door fault, traction converter fault and railway clearance intrusion by objects have an effect on reducing the severity level. On the contrary, the accidents caused by objects hanging on the catenary, pantograph fault, passenger misconducting or sudden illness, personnel intrusion of railway clearance, driving on heavy rain or snow and train collision against objects tend to be more severe. Originality/value The research results are very useful for mitigating the consequences of high-speed rail accidents.

Web-based disclosure and the cost of debt: MENA countries evidence

2020 ◽  
Vol 18 (3) ◽  
pp. 533-561
Author(s):  
Henda Abdi ◽  
Mohamed Ali Brahim Omri
Keyword(s):  
Information Disclosure ◽  
Developed Countries ◽  
Economic Consequences ◽  
Cost Of Debt ◽  
Mena Region ◽  
Web Based ◽  
Content Type ◽  
Mena Countries ◽  
The Cost ◽  
The Impact

Purpose The aim of this study is to investigate the effect of web - based disclosure on the cost of debt for the MENA region setting. Design/methodology/approach The sample of this paper consists of 237 MENA listed non-financial companies for the year 2017. Multiple regression models were used to examine the impact of online disclosure on the cost of debt. Content analysis is used to measure the extent of web-based disclosure. Findings The results reveal that there is a negative and significant association between the web-based disclosure and the company’s cost of debt. These results support the hypothesis of the economic utility of the information disclosed on the website for creditors in this region. Practical implications The results of the study have important implications for managers in the MENA region. It is necessary for managers to improve the company’s transparency through web-based disclosure. The companies must benefit from the different technologies offered by the Internet in order to offer to the creditors unlimited access to up to date information. In fact, web-based disclosure may mitigate the information asymmetry, the uncertainty of creditors and, consequently, reduces the cost of debt. 10; 10;Moreover, the results of the study provide empirical evidence for the advantages of voluntary web-based disclosure. The results highlight the importance to companies and regulators of understanding the benefits of using the website as a means of information disclosure. The regulators in MENA countries can rely on these results to establish suitable policies to improve the quality of web-based disclosure. The regulators need also to put in rules in relation to the online disclosure. In fact, an understanding of web-based disclosure is important for regulators and companies. Given the positive effect of online disclosure (the reduction of the cost of debt), knowledge about the economic consequences of web-based disclosure would enable companies in the MENA region to optimize their online disclosure policies. Originality/value This study, added to the existing literature by examining the consequences of online disclosure practices in MENA countries. Most previous studies conducted in this region were limited to analyzing the determinants of the company’s web-based disclosure. This paper would extend the literature on the online disclosure practices by investigating the association between these practices and the cost of debt in a developing economics: the MENA region. Previous studies were limited to testing this association only in developed countries.

The impact of government ownership on the cost of debt and valuation of Vietnamese listed companies

2020 ◽  
Vol 32 (2) ◽  
pp. 255-270
Author(s):  
Ben Le
Keyword(s):  
Instrumental Variable ◽  
Ordinary Least Squares ◽  
Firm Valuation ◽  
The Other ◽  
Cost Of Debt ◽  
Government Ownership ◽  
Content Type ◽  
The Cost ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the impact of government ownership on the cost of debt and firm valuation in listed Vietnamese companies for the period 2007 to 2016. Design/methodology/approach The authors use both the generalised methods of the moment (GMM) and the ordinary least squares (OLS) regressions to analyse a panel data spanning over the period 2007 to 2016 in the markets of Vietnam. Further, the instrumental variable is used in the paper. Findings The authors find that firms with relative higher government stockholdings or state-owned companies where the government owns 50 per cent or more of shares outstanding enjoy a lower cost of debt compared to the other firms. Consequently, these firms have higher firm valuation and profitability. The results are robust for both the GMM and the OLS regressions. Further, firms that no longer retain government ownership have a higher cost of debt than the other firms. The results of the paper imply the importance of political connections in businesses in the market of Vietnam. Originality/value This paper connects the relationship between government ownership and the cost of debt with the relationship between government ownership and firm valuation. The paper tests the relationship between the cost of debt and government ownership using both OLS and GMM specifications and the results are robust for both approaches. The manuscript uses an instrumental variable to show that government ownership has a positive impact on higher firm performance through reducing cost of debt. Further, this paper addresses the possible issue of endogeneity.

Study on Safety Measures for Construction of Foundation Pit close to Existing Railway Lines

2012 ◽  
Vol 178-181 ◽  
pp. 1279-1286 ◽  
Author(s):  
Xiao Hui Zhang ◽  
Quan Mei Gong ◽  
Shun Hua Zhou
Keyword(s):  
High Speed ◽  
Cost Effective ◽  
Structure Design ◽  
Foundation Pit ◽  
High Speed Railway ◽  
Reinforcement Measures ◽  
Railway Operation ◽  
The Cost ◽  
Effective Reinforcement ◽  
The Impact

The finite-element method is adopted to analyze the impact of foundation pit construction on close-by railway lines, and related measures are studied to ensure the safety of railway operation during the pit construction. Eventually, cost-effective reinforcement method is recommended, therefor providing a reference for construction of similar foundation pit close to railway lines to determine reinforcement method. The conclusions indicate that under the existing structure design and basal reinforcement design of the foundation pit, the largest settlement of high-speed railway lines is 23.48mm, which does not meet the relative requirements. To reduce the settlement, three rows of high pressure jet grouting piles reinforcement outside the foundation pit and 0.15m away from waterproof curtain is recommended, and 18.0m is considered as the cost-effective reinforcement depth. With the effect of the proposed reinforcement measures, the largest settlement magnitude of high-speed railway subgrade is reduced by 25% to 14.0mm, which meets the relative requirement.

Political connections, the cost of debt and board attributes: evidence from Malaysia

2019 ◽  
Vol 45 (7) ◽  
pp. 842-855 ◽  
Author(s):  
Chwee Ming Tee
Keyword(s):  
Audit Committee ◽  
Ethnically Diverse ◽  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Cost Of Debt ◽  
Board Diversity ◽  
Content Type ◽  
Crony Capitalism ◽  
The Cost ◽  
The Impact

Purpose The purpose of this paper is to examine whether the relationship between politically connected firms (PCFs) and the cost of debt is moderated by board attributes such as audit committee independence, ethnic board diversity, gender board diversity and family controlling ownership. Design/methodology/approach This study employs ordinary least squares model to examine the moderating effect of audit committee independence on the association between PCFs and the cost of debt; moderating effect of ethnic board diversity on the association between PCFs and the cost of debt; moderating effect of gender board diversity on the association between PCFs and the cost of debt; and moderating effect of family-controlled boards on the association between PCFs and the cost of debt. Findings The results show that PCFs are associated with lower cost of debt, consistent with crony capitalism theory. Furthermore, board attributes are shown to have significant moderating effect on the association between PCFs and the cost of debt. Specifically, the cost of debt in PCFs can be further reduced, provided the boards have higher audit committee independence, are ethnically diverse, have higher proportion of female directors in the board and audit committee and are controlled by family shareholders. Originality/value This study reveals evidence on the impact of board attributes on the cost of debt in PCFs. All findings suggest that concerns on PCFs’ severe agency problems can be alleviated through effective monitoring. The significant board attributes that facilitate effective monitoring are audit committee independence, ethnic board diversity, gender board diversity and family ownership.

scholarly journals Accruals quality and the cost of debt: the European evidence

2019 ◽  
Vol 27 (2) ◽  
pp. 333-351 ◽  
Author(s):  
Yasser Eliwa ◽  
Andros Gregoriou ◽  
Audrey Paterson
Keyword(s):  
Financial Crisis ◽  
Cost Of Debt ◽  
Content Type ◽  
Crisis Period ◽  
Listed Firms ◽  
National Characteristics ◽  
Accruals Quality ◽  
The Cost ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to investigate the empirical relationship between the cost of debt (CoD) and accruals quality (AQ) of European listed firms during the period of 2005 to 2014. Also, it aims to test the impact of the interrelationship between the financial crisis (2008-2009) and AQ on CoD. Finally, we decompose AQ into two components; the innate (InnateAQ) and discretionary components (DiscAQ); and test their relationships with CoD. Design/methodology/approach To empirically examine the relationship between AQ and CoD, a sample including 15 member states of the EU is constructed. AQ proxy is based on the McNichols (2002) modification of Dechow and Dichev (2002) model. A univariate analysis and a multivariate analysis are conducted to examine the relationship between AQ and CoD after controlling for firm characteristics and institutional variables. Findings We find a significant negative association between AQ and CoD in a vast proportion of the 15 countries under review. Also, the results indicate that during the crisis period, creditors pay relatively more attention to the quality of accounting information than during the pre-crisis period when they determine CoD of firms. Moreover, we report a link between the magnitude of this relationship and national characteristics and provide evidence of the significant effects of national characteristics and market forces on CoD. Finally, we find that InnateAQ drives the relationship with CoD. Practical implications This paper provides up-to-date evidence on the economic consequences of AQ and IFRS in the capital market. The results should, therefore, be of interest to managers, creditors, regulators and standard-setters. Originality/value To the best of the authors’ knowledge, this is the first paper to investigate the effects of AQ on CoD for European listed firms. Also, it examines the impact of financial crisis on the association between AQ and CoD.

Impact of CSR on cost of debt and cost of capital: Australian evidence

2019 ◽  
Vol 16 (3) ◽  
pp. 419-430 ◽  
Author(s):  
Md. Borhan Uddin Bhuiyan ◽  
Thi Hong Nhung Nguyen
Keyword(s):  
Risk Mitigation ◽  
Practical Implication ◽  
Multivariate Regression Analysis ◽  
Cost Of Debt ◽  
Content Type ◽  
Listed Firms ◽  
Financing Cost ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Cost

Purpose This paper aims to investigate the association between the corporate social responsibility (CSR) and the cost of equity (COE) and cost of debt (COD). Design/methodology/approach The authors use the multivariate regression analysis approach to address the developed hypotheses. Findings Using a sample of 230 Australian listed firms from 2004 to 2016, the authors document that firms complying with higher CSR affect both COE and COD negatively, which means that CSR disclosure reduces financing cost. Practical implication These results support the risk mitigation perspective of CSR compliance, showing that both the investors and creditors may lower their expected returns because they find that CSR can mitigate potential business risk. Originality/value The authors extend the CSR research with both COE and COD.

Carbon emissions and the cost of capital: Australian evidence

2014 ◽  
Vol 13 (4) ◽  
pp. 400-420 ◽  
Author(s):  
Yongqing Li ◽  
Ian Eddie ◽  
Jinghui Liu
Keyword(s):  
Carbon Emissions ◽  
Emission Intensity ◽  
Carbon Emission ◽  
Cost Of Capital ◽  
Cost Of Debt ◽  
Emissions Reduction ◽  
Cost Of Equity ◽  
Content Type ◽  
The Cost ◽  
The Impact

Purpose – The purpose of this paper is to investigate the potential impact of the approved Australian carbon emissions reduction plan on the cost of capital and the association between companies’ carbon emission intensity and the cost of capital. Design/methodology/approach – A sample of Australian Stock Exchange 200 (ASX 200)-indexed companies from 2006 to 2010 is used. Hypotheses are tested based on Heckman’s two-stage approach. Three regression models are developed to examine the association between carbon emissions and the cost of capital. Findings – Using a sample of ASX 200-indexed listed companies, the paper finds that the cost of capital, including the cost of debt and the cost of equity, will increase for emissions-liable companies. Results also show that the cost of debt is positively correlated with a company’s emission intensity. However, little evidence supports that the emission intensity affects the cost of equity. Originality/value – As it is evident that the emissions reduction plan will adversely affect corporate entities’ cost of capital, this study suggests that companies, investors and lenders need to include carbon emission in risk analysis. An emissions-liable company should establish strategies to combat the impact of the Plan on rising cost that comes with the enforcement of the Plan. Government assistance is essential in the transitional period.

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