scholarly journals Corporate debt maturity and economic development

2019 ◽  
Vol 15 (5) ◽  
pp. 669-687 ◽  
Author(s):  
Celia Álvarez-Botas ◽  
Víctor M. González-Méndez
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Financial Crisis ◽  
Firm Size ◽  
Debt Maturity ◽  
Corporate Debt ◽  
Content Type ◽  
Country Level ◽  
The Relationship ◽  
Bank Concentration

Purpose The purpose of this paper is to analyse the effect of economic development on the influence of country-level determinants on corporate debt maturity, bearing in mind firm size and the period of financial crisis. Design/methodology/approach The authors employ panel data estimation with fixed effects to examine the role of economic development in influencing the relationship between country-level determinants on corporate debt maturity. The paper uses a sample of 30,727 listed firms, belonging to 39 countries, over the period 2005–2012. Findings Corporate debt maturity increases with the efficiency of the legal system and bank concentration and decreases with the weight of banks in the economy. However, the importance of these country determinants is greater in developing than in developed countries. The authors also show that firm size in developed and developing countries influences country determinants of corporate debt maturity. Finally, the results reveal that the financial crisis has affected the debt maturity of firms differently in developed and developing countries, with the effect of bank concentration lengthening debt maturity, this effect being more pronounced in developing countries. Practical implications The findings provide useful insights to guide policy decisions providing access to long-term financing, as corporate debt maturity depends on economic development, institutional environment, banking structure and firm size. Originality/value This study incorporates economic development in explaining the relationship between country-level determinants and corporate debt maturity.

scholarly journals Digital transformation, development and productivity in developing countries: is artificial intelligence a curse or a blessing?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Heidi Aly
Keyword(s):  
Artificial Intelligence ◽  
Developing Countries ◽  
Economic Development ◽  
Labor Productivity ◽  
Developed Countries ◽  
Digital Transformation ◽  
Future Research ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The entire world is now witnessing the Fourth Industrial Revolution and Artificial Intelligence (AI) is indeed altering the lives of the many in both developing and developed countries. Massive digital transformations are affecting the economies of those countries and are bringing with them many promised merits, as well as many challenges to face. This paper aims to examine the relationship between digital transformation (as a one facet of the fourth revolution and AI trends) on one side, and economic development, labor productivity and employment on the other side. Design/methodology/approach The paper analyzes different indices of digital transformation, and then uses the Digital Evolution Index (DEI) to study those relationships in a group of developing countries using feasible generalized least squares method (FGLS). Findings The results show a positive relationship between the digital transformation index and economic development, labor productivity and job employment. Females seem to gain more from digital transformation compared to males, as suggested by the positive relation with the first and the insignificant relation with the latter. The relationship with vulnerable employment is not significant; more evidence is still needed to judge whether digital transformation will have an impact upon the vulnerable employees in the economy. Research limitations/implications The paper focused on the impact of digital transformation upon total aggregate employment. Future research is still needed to examine the impact upon the structure of the labor market and the shift of occupations. Originality/value The paper aims to add to in the literature regarding the relationship between digital transformation, economic development, employment and productivity in the developing world. The implications of those relationships are of significant importance to policymakers regarding how much support should be given to encourage the digital transformation. At the same time, it shall also indicate how much social support policies are required – if any – to lessen the negative impact of digital transformation on the vulnerable groups inside the country. Another contribution is using a single composite index for digital transformation that is comparable across the chosen set of developing countries, instead of using single indices each capturing a different dimension of digital transformation.

scholarly journals Financial distress and highway infrastructure delays

2017 ◽  
Vol 15 (1) ◽  
pp. 118-132 ◽  
Author(s):  
David John Edwards ◽  
De-Graft Owusu-Manu ◽  
Bernard Baiden ◽  
Edward Badu ◽  
Peter Edward Love
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Financial Distress ◽  
Project Planning ◽  
Related Factors ◽  
Public And Private ◽  
Content Type ◽  
Highway Infrastructure ◽  
Construction Firms ◽  
The Relationship

Purpose In developing countries, delays in highway infrastructure projects caused by financial distress-related factors threaten the construction industry’s capacity to contribute optimally to economic development. Against this backdrop, this paper aims to determine factors contributing to financial distress and develops a conceptual framework to illustrate the relationship between financial distress and project delay. Design/methodology/approach A questionnaire survey collected data on factors that contributed to financial distress and delays in highway infrastructure delivery. In total, 78 responses were obtained, and factor analysis revealed that factors associated with payment, project financing, cash flow, economic issues, project planning and cost control influenced project delays. Findings The research identifies the importance of efficient public and private policies to engender financial sustainability among construction firms in developing countries. Originality/value This work presents the first research of its kind and strives to engender wider academic debate and renewed economic development in some of the world’s most impoverished nations.

Sustainability reporting and bank performance after financial crisis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amina Buallay ◽  
Sayed M. Fadel ◽  
Jasim Alajmi ◽  
Shahrokh Saudagaran
Keyword(s):  
Developing Countries ◽  
Financial Crisis ◽  
Generalized Method Of Moments ◽  
Sustainability Reporting ◽  
Developed Countries ◽  
Bank Performance ◽  
Content Type ◽  
The 2008 Financial Crisis ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the relationship between sustainability reporting and bank performance after financial crisis in developed and developing countries. Design/methodology/approach This study examines 882 banks from developed and developing countries covering 11 years after the 2008 financial crisis. The independent variable is environmental, social and governance (ESG) scores. The dependent variables are return on assets, return on equity and Tobin’s Q. This study uses bank- and country-specific control variables to measure the relationship between sustainability reporting and bank performance. Findings The findings deduced from the empirical results demonstrate that ESG improves banks’ accounting and market-based performance in developed countries, supporting value creation theory. Using pooling regression and instrumental variable – generalized method of moments, this study finds that ESG weakens banks’ performance in developed and developing countries. Originality/value To the best of the author’s knowledge, this is the first study to investigate and compare the impact of sustainability reporting on banks’ performance in developed and developing countries. The study found similarities in the impact of sustainability reporting and the improvement of banks’ current and future performance.

Merton-type default risk and financial performance: the dynamic panel moderation of firm size

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Mushafiq ◽  
Syed Ahmad Sami ◽  
Muhammad Khalid Sohail ◽  
Muzammal Ilyas Sindhu
Keyword(s):  
Financial Performance ◽  
Firm Size ◽  
Default Risk ◽  
Banking Sector ◽  
Generalized Method Of Moments ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Content Type ◽  
Nonfinancial Firms ◽  
The Relationship

PurposeThe main purpose of this study is to evaluate the probability of default and examine the relationship between default risk and financial performance, with dynamic panel moderation of firm size.Design/methodology/approachThis study utilizes a total of 1,500 firm-year observations from 2013 to 2018 using dynamic panel data approach of generalized method of moments to test the relationship between default risk and financial performance with the moderation effect of the firm size.FindingsThis study establishes the findings that default risk significantly impacts the financial performance. The relationship between distance-to-default (DD) and financial performance is positive, which means the relationship of the independent and dependent variable is inverse. Moreover, this study finds that the firm size is a significant positive moderator between DD and financial performance.Practical implicationsThis study provides new and useful insight into the literature on the relationship between default risk and financial performance. The results of this study provide investors and businesses related to nonfinancial firms in the Pakistan Stock Exchange (PSX) with significant default risk's impact on performance. This study finds, on average, the default probability in KSE ALL indexed companies is 6.12%.Originality/valueThe evidence of the default risk and financial performance on samples of nonfinancial firms has been minimal; mainly, it has been limited to the banking sector. Moreover, the existing studies have only catered the direct effect of only. This study fills that gap and evaluates this relationship in nonfinancial firms. This study also helps in the evaluation of Merton model's performance in the nonfinancial firms.

Relationship between corporate social responsibility and tax avoidance: international evidence

2019 ◽  
Vol 15 (2) ◽  
pp. 244-257 ◽  
Author(s):  
Tao Zeng
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Tax Avoidance ◽  
Content Type ◽  
Tax Rate ◽  
Country Level ◽  
International Setting ◽  
Corporate Social ◽  
Statutory Tax Rate ◽  
The Relationship

Purpose This paper aims to examine the relationship between corporate social responsibility (CSR) and tax avoidance as well as how CSR and country-level governance interplay in affecting tax avoidance in an international setting. Design/methodology/approach This paper is an empirical work using listed companies from 35 countries and relying on several proxies for corporate tax avoidance activities including the difference between the statutory tax rate and the annual effective tax rate, the book-tax difference and the residual book-tax difference. Findings This study finds strong evidence that CSR is positively related to tax avoidance. It also finds that in countries with weak country-level governance, firms with higher CSR scores engage in less tax avoidance, implying that CSR and country-level governance are substitutes. Originality/value This paper is the first study that examines the relationship between CSR and tax avoidance in an international setting with different legal and institutional environment.

scholarly journals Corporate debt maturity in developing countries: Sources of long and short-termism

World Economy ◽  
2018 ◽  
Vol 41 (12) ◽  
pp. 3288-3316 ◽  
Author(s):  
Juan J. Cortina ◽  
Tatiana Didier ◽  
Sergio L. Schmukler
Keyword(s):  
Developing Countries ◽  
Debt Maturity ◽  
Corporate Debt ◽  
Short Termism

Board involvement in corporate performance: evidence from a developing country

2015 ◽  
Vol 5 (3) ◽  
pp. 250-268 ◽  
Author(s):  
Chaminda Wijethilake ◽  
Athula Ekanayake ◽  
Sujatha Perera
Keyword(s):  
Developing Countries ◽  
Sri Lanka ◽  
Developing Country ◽  
Resource Dependence ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Corporate Boards ◽  
Ceo Duality ◽  
Content Type ◽  
The Relationship

Purpose – The purpose of this paper is to provide insights into the understanding of the relationship between board involvement and corporate performance within the context of developing countries. Design/methodology/approach – A number of aspects related to board involvement, including board’s shareholdings, frequency of board meetings, availability of independent board committees, board size, CEO duality, and CEO is being a promoter, were examined in order to explore their influence on corporate performance measured in terms of earnings per share. The study mainly draws on agency theory, and is supplemented by resource dependence and stewardship theories. Multiple regression analysis is utilized to analyze the data gathered from a sample of 212 publicly listed companies in 20 industries in the Colombo Stock Exchange in Sri Lanka. Findings – Among the aspects of board involvement considered, board’s shareholdings, board meetings frequency, independent committees, and CEO duality showed a positive influence on corporate performance. However, two other aspects, namely CEO being a promoter, and the size of corporate boards showed a negative effect. The findings also suggest that the use of multiple theories, rather than depending on a single theory, is more effective in understanding the relationships examined in this study. Further, the study highlights the need to be cautious in utilizing the theories that are more applicable to matured western economies when analyzing issues relating to developing countries. Originality/value – This study makes an original contribution to corporate governance literature by examining the relationship between board involvement and corporate performance in a developing country, namely Sri Lanka. The study also adds to the existing literature by utilizing multiple theories to examine the issue under investigation.

Targeted state economic development incentives and entrepreneurship

2018 ◽  
Vol 7 (3) ◽  
pp. 235-247 ◽  
Author(s):  
Meg Patrick Tuszynski ◽  
Dean Stansel
Keyword(s):  
Economic Development ◽  
Economic Freedom ◽  
Entrepreneurial Activity ◽  
Data Set ◽  
Content Type ◽  
Incentive Programs ◽  
Economic Development Incentives ◽  
State Economic Development ◽  
Development Incentives ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between state economic development incentives programs and entrepreneurial activity. Design/methodology/approach The authors use panel data and a fixed-effects model to examine the determinants of five measures of entrepreneurial activity. To measure state economic development incentives programs, they use a new and substantially improved data set from Bartik (2017). They also include a measure for economic freedom, the Fraser Institute’s Economic Freedom of North America index. Findings The authors find a robustly negative relationship between development incentives and patent activity. They find some evidence that incentives are negatively associated with small business establishments (<10 employees) as a percentage of total establishments but positively associated with the large business establishment (>500 employees) share. They also find evidence of a positive relationship between economic freedom and both patent activity and net business formation. Research limitations/implications The results imply that economic development incentive programs are unlikely to increase entrepreneurial activity and may decrease it. They also imply increased economic freedom (lower taxes, lower spending, and lower governmental restrictions on labor markets) may increase entrepreneurial activity. Originality/value To the authors’ knowledge, this paper provides the first examination of the relationship between development incentives and entrepreneurial activity that utilizes Bartik (2017), a new vastly improved data set of state economic development incentive programs. The paper also contributes to the literature on the relationship between economic freedom and entrepreneurial activity.

How the Human Resource Practices of Chinese MNEs in Africa Create Economic Growth and Livelihood Options

2018 ◽  
pp. 85-109
Author(s):  
Sue Claire Berning ◽  
Judith Ambrosius
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Development ◽  
Human Resource ◽  
Multinational Enterprises ◽  
Poverty Reduction ◽  
Developmental Effect ◽  
Livelihood Options ◽  
Chinese Mnes ◽  
The Relationship

The purpose of this paper is to critically analyze the economic development impact of multinational enterprises (MNEs) in developing countries. In particular, the relationship between MNEs' developmental effect on economic growth and poverty reduction and their use of human resource management (HRM) practices will be examined. The regional focus will be on Chinese MNEs in Africa. The paper is conceptual in nature by analyzing relevant key literatures, investigating cases of Chinese MNEs in Africa, and finally deriving a systematic conceptual framework.

Trust: mediator between mobile money adoption and usage and financial inclusion

2019 ◽  
Vol 16 (8) ◽  
pp. 1215-1237
Author(s):  
George Okello Candiya Bongomin ◽  
Joseph Ntayi
Keyword(s):  
Developing Countries ◽  
Mobile Network ◽  
Mobile Telephone ◽  
Partial Least Square ◽  
Financial Inclusion ◽  
Mediating Effect ◽  
Content Type ◽  
Mobile Money ◽  
The Relationship

Purpose Recently, a large body of research has been devoted on the role of trust in shaping different types of transactions, especially in rural financial development. Trust is a set of expectations shared by all those who engage in an exchange. Indeed, the “rule of the game” suggests that no trusting party in a transaction should act opportunistically. Consequently, this study aims to establish the mediating effect of trust in the relationship between mobile money adoption and usage and financial inclusion of MSMEs in developing countries with a specific focus on rural Uganda. Design/methodology/approach A quantitative survey-based study was used and responses obtained from 379 MSMEs located in northern Uganda were analysed using partial least square-PLS version 3.0. A semi-structured questionnaire was developed from scales and items used in previous studies referenced in internationally recognised journals to elicit responses from the MSMEs. Structural equation modelling was used to test the models to arrive at a final empirical model derived from the data. Findings The authors found evidence that trust enhances mobile money adoption and usage to increase the scope of financial inclusion of MSMEs in developing countries. Moreover, when individual effect was determined, trust also had significant and positive effect on financial inclusion. Thus, the study results imply that trust enhances mobile money adoption and usage to improve the level of financial inclusion of MSMEs in developing countries. Research limitations/implications The study used cross-sectional data to document the relationship between mobile money adoption and usage and financial inclusion and to establish the mediating effect of trust in the relationship. Future research could use relevant longitudinal data to verify other benefits of trust. Practical implications The results present trust as a significant factor for FINTECH financial services marketing and growth. Specifically, data privacy and effectiveness of the mobile telephone network is more likely to help consumers to bridge the gap between participation and non-participation on the mobile money platform. Customers’ data sent over the mobile network of providers should be protected from unnecessary access and usage by Mobile Network Operators (MNOs) staff and unauthorised persons and agents. Data protection protocols should be set by the MNOs to avoid unnecessary access and use of customers’ data. Originality/value Globally, Fintech scholars have examined the role of mobile money in promoting financial inclusion. However, there is insufficient evidence on the mediating effect of trust in the relationship between mobile money adoption and usage and financial inclusion, especially among rural MSMEs. This study invents a novel direction on the importance of trust in creating transaction efficiency by eliminating opportunism and fraud with in the Fintech ecosystem.

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