scholarly journals Impact Size and Determinants of Indirect Cost of Financial Distress: Role of Receivable and Inventory Management

2020 ◽  
Vol 16 (2) ◽  
pp. 179-207
Author(s):  
Umar Farooq ◽  
Muhammad Ali Jibran Qamar ◽  
Krishna Reddy
Keyword(s):  
Indirect Cost ◽  
Inventory Management ◽  
Financial Distress ◽  
Multi Stage ◽  
Initial Stage ◽  
Non Linear ◽  
Management Policies ◽  
Internal Operations ◽  
The Impact

This research investigates the opportunity cost as an indirect cost of financial distress from two perspectives. First, indirect cost is estimated using multi-stage financial distress and non-linear proxy of debt. Second, receivable and inventory management are studied as determinants of indirect cost. The sample includes ongoing Pakistani firms that were healthy in the previous year and documenting positive gross profit. Results showed that firms bear opportunity loss primarily due to leverage rather than multistage financial distress. However, a non-linear relationship is found between leverage and indirect cost. Results further explored the impact of multistage financial distress on internal operations, i.e., working capital policies. It is found that firms manage receivable and inventory simultaneously during the multistage financial distress. Results revealed that increasing receivables and decreasing inventory is suitable during the transition of healthy firms to initial stage of financial distress, i.e., profit reduction. However, decreasing receivables, along with holding more inventory, is recommended for healthy firms that face liquidity problems subsequently. It is concluded that managers can reduce the indirect cost after deploying the optimal debt ratio and recommended receivable and inventory management policies.

Surviving from garbage: the role of informal waste-pickers in a dynamic model of solid-waste management in developing countries

2006 ◽  
Vol 11 (3) ◽  
pp. 371-391 ◽  
Author(s):  
ROCÍO DEL PILAR MORENO-SÁNCHEZ ◽  
JORGE HIGINIO MALDONADO
Keyword(s):  
Developing Countries ◽  
Waste Management ◽  
Solid Waste ◽  
Dynamic Model ◽  
Solid Waste Management ◽  
Waste Collection ◽  
Management Policies ◽  
The Impact ◽  
Waste Pickers

In developing countries, informal waste-pickers (known as scavengers) play an important role in solid waste management systems, acting in a parallel way to formal waste collection and disposal agents. Scavengers collect, from the streets, dumpsites, or landfills, re-usable and recyclable material that can be reincorporated into the economy's production process. Despite the benefits that they generate to society, waste-pickers are ignored when waste management policies are formulated. The purpose of this paper is to integrate the role of scavengers in a dynamic model of production, consumption, and recovery, and to show that, in an economy producing solid waste, efficiency can be reached using a set of specific and complementary policies: a tax on virgin materials use, a tax on consumption and disposal, and a subsidy to the recovery of material. A numerical simulation is performed to evaluate the impact of these policies on landfill lifetime and natural resource stocks. A discussion on the implementation of these instruments is also included.

scholarly journals The yin and yang nature of coopetition activities: non-linear effects and the moderating role of competitive intensity for internationalised firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
James M. Crick ◽  
Dave Crick
Keyword(s):  
Chinese Philosophy ◽  
Market Performance ◽  
Company Performance ◽  
Competitive Intensity ◽  
Content Type ◽  
Non Linear ◽  
Yin And Yang ◽  
The Impact ◽  
Moderating Role

PurposeThis paper draws upon the Yin and Yang concept of Chinese philosophy within a Western context to examine coopetition, namely, the interplay between cooperation and competition. Although coopetition activities should positively affect company performance, earlier research involving this relationship has typically been linear in nature and without moderating factors. Consequently, underpinned by resource-based theory and the relational view, the purpose of this investigation is to examine the non-linear (inverted U-shaped) link between coopetition and company performance under the moderating role of competitive intensity.Design/methodology/approachCollection of survey data involved a sample of 101 internationalising wine producers in New Zealand. Following a check of the statistical data for all major assessments of reliability and validity (together with common method variance), testing the research hypotheses and control paths took place through hierarchical regression. Furthermore, 20 semi-structured interviews helped explain the underlying mechanisms behind the quantitative results.FindingsCoopetition had a non-linear (inverted U-shaped) relationship with market performance. Surprisingly, competitive intensity yielded a negative moderation effect. The mixed methods results highlighted that firms must strike an effective balance between the paradoxical forces of cooperativeness and competitiveness across their product-market strategies.Originality/valueThis investigation contributes to the existing literature by developing and testing a conceptual framework examining the nature of the relationship between coopetition activities and market performance – using non-linear (inverted U-shaped) and moderating effects. It addresses a debate between two schools-of-thought concerning the impact of competitive intensity on the coopetition paradox. Additionally, this study helps to explain the coopetition construct through the Yin and Yang concept to highlight how the paradoxical forces of cooperativeness and competitiveness can create harmful outcomes for organisations if they do not manage them effectively (across domestic and international markets).

scholarly journals The impact of pharmacist shortage on the inventory management of medicines at primary healthcare centres in East Java, Indonesia

2021 ◽  
pp. 8-14
Author(s):  
Abdul Rahem ◽  
Umi Athiyah ◽  
Catur Dian Setiawan ◽  
Andi Hermansyah
Keyword(s):  
Inventory Management ◽  
Primary Healthcare ◽  
Medicine Management ◽  
The Impact ◽  
Primary Healthcare Centers

Background: Pharmacists are the only people authorised to manage the medicines inventory. However, in the case of pharmacist shortage, other personnel may take over this function. This is particularly the case in most primary healthcare centers (puskesmas) in Indonesia. Aim: To compare the outcome of medicine inventory management between pharmacists and non-pharmacists in primary healthcare centres (PHCs). Methods: A survey of 146 puskesmas in East Java was conducted involving 73 pharmacists and 73 non-pharmacist staff. This study was conducted from July to January 2020. Each respondent completed a questionnaire focusing on the inventory aspects of medicine management. Results: Purchasing accuracy is higher for pharmacists (90%) than for non-pharmacists (68%). Pharmacists manage the inventory more efficiently with only 2% of the drugs expired and wasted while non-pharmacist staff wasted 16% of the drugs and 18% of the drugs expired. Conclusion: The role of pharmacists in medicine inventories is vital as they carry out more efficient and accurate medicine management.

Analyzing the impact of board vigilance on financial distress through the intervention of leverage structure and interaction of asset tangibility in the non-financial sector of Pakistan

2021 ◽  
pp. 2150004
Author(s):  
Wen Xuezhou ◽  
Rana Yassir Hussain ◽  
Haroon Hussain ◽  
Muhammad Saad ◽  
Sikander Ali Qalati
Keyword(s):  
Capital Structure ◽  
Financial Distress ◽  
Ordinary Least Squares ◽  
Debt Maturity ◽  
Financial Firms ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
The Impact ◽  
The Relationship

This study focuses on the relationship between board vigilance and financial distress in non-financial firms listed on the Pakistan Stock Exchange (PSX). The mediating role of leverage structure and moderating role of asset tangibility is also studied following Baron and Kenney’s approach. The study analyzed the data of 284 firms ranging from 2013 to 2017 by using ordinary least squares (OLS) and panel corrected standard errors (PCSE) regressions. The study revealed that the debt maturity structure mediates the relationship between board independence and financial distress and between CEO non-duality and financial distress but the capital structure did not mediate any of the stated relationships. Similarly, asset tangibility negatively moderated the relationship between debt maturity and financial distress. However, there was no such moderation detected between the relationship of capital structure and financial distress. The results remained consistent throughout the analysis with both regression techniques. These results suggest using more long-term debt in debt maturity structure to have control over financial distress and also to reduce the reliance on non-productive tangible assets in the asset structure of non-financial firms of Pakistan.

The effects of ownership structure on likelihood of financial distress: an empirical evidence

2017 ◽  
Vol 17 (4) ◽  
pp. 589-612 ◽  
Author(s):  
Shahab Udin ◽  
Muhammad Arshad Khan ◽  
Attiya Yasmin Javid
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Financial Distress ◽  
Generalized Method Of Moments ◽  
The Body ◽  
Content Type ◽  
The Government ◽  
The Impact

Purpose The purpose of this paper is to explore the role of corporate governance proxies by ownership structure on the likelihood of firms’ financial distress for a sample of 146 Pakistani public-limited companies listed at the Karachi Stock Exchange over the period of 2003-2012. Design/methodology/approach The dynamic generalized method of moments (GMM) estimator and panel logistic regression (PLR) are used to determine the impact of corporate governance on the financial distress. The ownership structure is used as a determinant of corporate governance, while the Altman Z-score is utilized as an indicator of financial distress, as it measures financial distress inversely. The smaller the values of the Z-score, the higher will be the risk of financial distress. Findings The authors find insignificant impact of ownership structure on firms’ likelihood of financial distress based on the dynamic GMM method. However, the PLR results indicate that foreign shareholdings have a significant negative association with firms’ likelihood of financial distress, in the case of Pakistan. An evidence of a negative and insignificant relationship between institutional ownership and financial distress was observed, which indicates the passive role of institutional investors in Pakistan. The results also reveal a positive and significant relationship between insider’s ownership and likelihood of financial distress. This finding is consistent with the entrenchment hypothesis which predicts that insiders are more aligned with their self-interest than outside shareholders’ interest when their shareholding increases in the business. Furthermore, the results also reveal insignificant association between government shareholdings and the probability of financial distress. The reason could be the social welfare objective of the government entities rather than profit maximization. Practical implications The findings of this study provide more insight to corporate managers and investors about the association between the quality of corporate governance and the degree of financial distress, with respect to Pakistani firms. Furthermore, this study contributes to the existing literature by adding new evidence from developing countries like Pakistan which are helpful for regulatory bodies and policymakers in the formulation of long-term corporate governance strategies to manage the financial distress. It is well established that strengthening the quality of corporate governance practices enhances the efficiency of capital markets and reduces the probability of financial distress. Originality/value The study extends the body of existing literature on corporate governance and the likelihood of financial distress with reference to Pakistan. The results suggest that policymakers may pay special attention to the quality of corporate governance, specifically ownership structure, while predicting corporate financial distress.

scholarly journals Spiritual Well-Being, Social Support, and Financial Distress in Determining Depression: The Mediating Role of Impact of Event During COVID-19 Pandemic in Iran

2021 ◽  
Vol 12 ◽  
Author(s):  
Hamid Sharif Nia ◽  
Ozkan Gorgulu ◽  
Navaz Naghavi ◽  
María Auxiliadora Robles-Bello ◽  
David Sánchez-Teruel ◽  
...  
Keyword(s):  
Social Support ◽  
Depressive Symptoms ◽  
Financial Distress ◽  
Online Survey ◽  
Well Being ◽  
Mediating Role ◽  
Spiritual Well Being ◽  
The Impact ◽  
The Relationship

This study investigates the relationship between spiritual well-being, social support, and financial distress with depressive symptoms due to the COVID-19 pandemic. A path analysis was used to analyze data collected from 1,156 Iranian participants via an online survey. The results showed that spiritual well-being and social support were negatively related to depressive symptoms and financial distress. The impact of COVID-19 events showed negative associations with depressive symptoms. In addition, the link between spiritual well-being and financial distress with depressive symptoms was partially mediated by the impact of events.

scholarly journals Application of Lateral Transshipment in Cost Reduction of Decentralized Systems

2020 ◽  
Vol 12 (12) ◽  
pp. 5081
Author(s):  
Yi Liao ◽  
Jun Li ◽  
Xinxin Hu ◽  
Ying Li ◽  
Wenjing Shen
Keyword(s):  
Inventory Management ◽  
Cost Reduction ◽  
Demand Uncertainty ◽  
Switching Behavior ◽  
Primary Concern ◽  
Decentralized Systems ◽  
Product Availability ◽  
Multi Stage ◽  
Lateral Transshipment ◽  
The Impact

COVID-19 has exposed the global supply chains to great vulnerability. In such extreme circumstances, product availability becomes a primary concern. This paper studies a basic inventory management strategy—lateral transshipment—under decentralized systems, which may play an important role in dealing with stockouts during unexpected crises. Lateral transshipments not only react quickly to stockout, but are also environmentally friendly due to the significant reduction of production and transportation pollution. This paper studies optimal lateral transshipment and replenishment decisions under a decentralized setting. We construct a multi-stage stochastic model that captures demand uncertainty and customer switching behavior. We demonstrate that, similar to the centralized setting, the optimal transshipment decision follows a double-threshold structure. The optimal replenishment quantities are determined under two pricing mechanisms—individual mechanism (IP) and negotiated mechanism (NP). Numerical examples are provided to demonstrate the impact of lateral transshipment on supply chain cost reduction.

scholarly journals Cash Holding and Firm Value in the Presence of Managerial Optimism

2021 ◽  
Vol 14 (8) ◽  
pp. 356
Author(s):  
Ashfaq Habib ◽  
M. Ishaq Bhatti ◽  
Muhammad Asif Khan ◽  
Zafar Azam
Keyword(s):  
Linear Relationship ◽  
Firm Value ◽  
Manufacturing Firms ◽  
Economic Conditions ◽  
Cash Holding ◽  
The Novel ◽  
Non Linear ◽  
Managerial Optimism ◽  
The Impact

Cash holding is important for Chinese manufacturing firms coping with the increasing costs of financing and tough economic conditions. This study examines the impact of cash holding on the firm value of Chinese manufacturing businesses. We found evidence that a non-linear relationship exists between cash holding and firm value in these companies. The study reveals that a higher level of cash holding in financially constrained firms negatively affects the firm value, while unconstrained firms with a less cash holding level have a better firm value. Finally, this research is enriched by implementing the novel measure of managerial optimism. Revealed is the interactive role of cash holding and optimism and how they affect firm value. The study concludes that managerial optimism influences a firm’s cash holding decisions, and this is more costly for unconstrained firms.

Can the IoT Help Small Businesses?

2018 ◽  
Vol 38 (1-2) ◽  
pp. 3-12
Author(s):  
Nory B. Jones ◽  
C. Matt Graham
Keyword(s):  
Economic Development ◽  
Inventory Management ◽  
Small Businesses ◽  
Medium Size ◽  
Business Managers ◽  
Exploratory Approach ◽  
Willingness To Adopt ◽  
Potential Benefits ◽  
The Impact

The IoT (Internet of Things) can transform businesses by automating processes ranging from inventory management to robotics to automation, saving time, and money. However, can small businesses benefit from the IoT? This article explores the emerging role of the IoT in small businesses, the impact on their ability to compete in a rapidly changing digital environment, and their awareness, attitudes, perceptions, and willingness to adopt it. The research utilizes an initial exploratory approach based on a review of case studies in the literature, interviews with several economic development personnel and a few small and medium-size business managers. Benefits from the use of the IoT include increased efficiency in operations and reduced costs in businesses. The medium-size businesses interviewed have verified these benefits. However, the majority of economic development personnel and small businesses interviewed did not have much or any awareness of what IoT technologies were or their potential benefits.

scholarly journals Family firms, risk-taking and financial distress

2017 ◽  
Vol 15 (2) ◽  
pp. 168-177 ◽  
Author(s):  
Pietro Gottardo ◽  
Anna Maria Moisello
Keyword(s):  
Family Involvement ◽  
Financial Distress ◽  
Family Firms ◽  
Explanatory Power ◽  
Firm Risk ◽  
Risk Characteristics ◽  
The Family ◽  
The Impact ◽  
Qualitative Characteristics

The authors investigate the question of whet her qualitative characteristics are likely to explain the survival of family firms in case of financial distress and whether these variables improve the explanatory power of quantitative variables in clarifying the different probability of distress between family and non-family firms. They focus their attention on the impact of the controlling owner and, using the Socioemotional Wealth theory (SEW), study the role of the family involvement in mitigating or accentuating the likelihood of distress. Using a dataset of 1,137 Italian family and non-family firms during 2004–2013, the authors found that family firms are significantly less likely to incur distress than non-family firms. The board dimension and the number of family members on board affect the probability of distress even controlling for some firm risk characteristics such as beta and ROA volatility, and there is also evidence of a gender mitigating effect in case of a female CEO.

Sign in / Sign up

Export Citation Format

Share Document