Financial Distress with Family Farm Transfer in Six European Countries

EuroChoices ◽  
2004 ◽  
Vol 3 (2) ◽  
pp. 18-23 ◽  
Author(s):  
Karei Bommei ◽  
Hennie Veen ◽  
Gabe Venema
2019 ◽  
Vol 22 (3) ◽  
pp. 429-434
Author(s):  
Iuliia Tetteh ◽  
Michael Boehlje

This case illustrates a challenging management decision faced by the family farm: when should they bring the younger generation to the farm full-time? Under consideration is a critical trade-off between the firm’s growth and transfer tax implications that drives the farm transfer decision. Industry practitioners and students are asked to use the results of the intergenerational farm transfer simulation model to evaluate this trade-off and provide an effective recommendation. The case can be used as part of succession/estate planning workshops attended by agricultural producers, farm managers, agricultural lenders, as well as in Master’s level courses in agricultural finance and farm management.


Author(s):  
Alice Delerue Matos ◽  
Andreia Fonseca de Paiva ◽  
Cláudia Cunha ◽  
Gina Voss

AbstractStudies show that older individuals with multimorbidity are more susceptible to develop a more severe case of COVID-19 when infected by the virus. These individuals are more likely to be admitted to Intensive Care Units and to die from COVID-19-related conditions than younger individuals or those without multimorbidity. This research aimed to assess whether there are differences in terms of precautionary behaviours between individuals aged 50 + with multimorbidity and their counterparts without multimorbidity residing in 25 European countries plus Israel. We used data from the SHARE-COVID19 questionnaire on the socio-demographic and economic characteristics, multimorbidity, and precautionary behaviours of individuals. SHARE wave 8 and 7 databases were also used to fully identify individuals with multimorbidity. Our results showed that individuals with multimorbidity were more likely to exhibit precautionary behaviours than their counterparts without multimorbidity when gender, age, education, financial distress and countries were included as controls. Additionally, we found that women, more educated individuals and those experiencing more financial distress adopt more protective behaviours than their counterparts. Our results also indicate that the prevalence of precautionary behaviours is higher in Spain and Italy and lower in Denmark, Finland and Sweden. To guarantee the adoption of preventive actions against COVID-19, public health messaging and actions must continue to be disseminated among middle and older aged persons with multimorbidity, and more awareness campaigns should be targeted at men and less educated individuals but also at persons experiencing less financial distress, particularly in countries where people engaged in fewer precautionary behaviours.


Author(s):  
Douglas Davis ◽  
Edward S. Prescott

This Commentary describes experiments conducted to study alternative designs for a new type of financial security, CoCo bonds, that is being used in some European countries to manage the risk of financial crises. CoCo bonds are bank-issued debt that converts to equity when a trigger is breached. The conversion into equity serves to recapitalize a bank during financial distress, precisely when it is hardest to raise capital. The types of trigger used for all CoCos issued thus far are defined in terms of book capital. The experiments we conducted explore the effects of using triggers that are based on market prices.


Author(s):  
Andrea Quintiliani

In the aftermath of the global financial crisis, this chapter sheds light on the determinants of the financial distress costs between Italian and German small and medium enterprises (SMEs). The authors propose an innovative formulation of the expected costs originated by financial distress expressed as the product of the expected financial distress likelihood times the total amount of the financial distress costs if insolvency does occur. The model is estimated using panel data methodology on samples from two European countries (Italy and Germany). The results indicate that the amount of ex-post costs depends on derivative financial instruments, intangible assets, and relation with local banks (small local banks rather than large banking groups).


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