Bankruptcy Prediction with a Doubly Stochastic Poisson Forward Intensity Model and Low-Quality Data

With the record high leverage across all segments of the (global) economy, default prediction has never been more important. The excess cash illusion created in the context of COVID-19 may disappear just as quickly as the pandemic entered our world in 2020. In this paper, instead of using any scoring device to discriminate between healthy companies and potential defaulters, we model default probability using a doubly stochastic Poisson process. Our paper is unique in that it uses a large dataset of non-public companies with low-quality reporting standards and very patchy data. We believe this is the first attempt to apply the Duffie–Duan formulation to emerging markets at such a scale. Our results are comparable, if not more robust, than those obtained for public companies in developed countries. The out-of-sample accuracy ratios range from 85% to 76%, one and three years prior to default, respectively. What we lose in (data) quality, we regain in (data) quantity; the power of our tests benefits from the size of the sample: 15,122 non-financial companies from 2007 to 2017, unique in this research area. Our results are also robust to model specification (with different macro and company-specific covariates used) and statistically significant at the 1% level.

Download Full-text

Australia—The Hidden Jewel

10.1093/oso/9780198827481.003.0012 ◽

2018 ◽

Author(s):

Mahesh K. Joshi ◽

J.R. Klein

Keyword(s):

Natural Resources ◽

Value Chain ◽

Global Economy ◽

Good Governance ◽

Developing Economies ◽

Raw Materials ◽

Manufacturing Sector ◽

Developed Countries ◽

The United States ◽

Dutch Disease

The twenty-first century is being touted as the Asian century. With its stable economy, good governance, education system, and above all the abundant natural resources, will Australia to take its place in the global economy by becoming more entrepreneurial and accelerating its rate of growth, or will it get infected with the so-called Dutch disease? It has been successful in managing trade ties with fast-developing economies like China and India as well as developed countries like the United States. It has participated in the growth of China by providing iron ore and coal. Because it is a low-risk country, it has enabled inflow of large foreign capital investments. A lot will depend on its capability and willingness to invest the capital available in entrepreneurial ventures, its ability to capture the full value chain of natural resources, and to export the finished products instead of raw materials, while building a robust manufacturing sector.

Download Full-text

Positive Design for Children with Atopic Dermatitis—Enhanced Problem-Solving and Possibility-Driven Approach in the Context of Chronic Disease

Multimodal Technologies and Interaction ◽

10.3390/mti4040069 ◽

2020 ◽

Vol 4 (4) ◽

pp. 69

Author(s):

Veronika Weiß ◽

Michael Minge ◽

Bernhard Preim ◽

Steffi Hußlein

Keyword(s):

Atopic Dermatitis ◽

Problem Solving ◽

Developed Countries ◽

Research Area ◽

Steady Increase ◽

Early Age ◽

Human Flourishing ◽

Very Young Children ◽

The 1960S ◽

Design For Children

Since the 1960s, atopic dermatitis has seen a steady increase in prevalence in developed countries. Most often, the onset begins at an early age and many patients are very young children. Due to their young age, their parents are forced to take over handling of the disease. As a consequence, atopic dermatitis places a high burden not only on affected children, but also on their parents and siblings, limiting human flourishing of a whole family. Therefore, the described research area calls for a possibility-driven approach that looks beyond mere problem-solving while building on existing support possibilities and creating new ones. This paper presents atopi as a result of such a possibility-driven approach. It incorporates existing patient education and severity scoring into an extensive service, adding new elements to turn necessary practices into joyful experiences, to create feelings of relatedness and to increase perceived self-efficacy, thus is suitable to enable human flourishing.

Download Full-text

Internationalization of emerging multinationals: the Latin American case

European Business Review ◽

10.1108/ebr-03-2013-0055 ◽

2014 ◽

Vol 26 (6) ◽

pp. 588-602 ◽

Cited By ~ 5

Author(s):

Mauricio Losada-Otálora ◽

Lourdes Casanova

Keyword(s):

Latin American ◽

Global Economy ◽

Secondary Data ◽

Developed Countries ◽

Analytical Framework ◽

Content Type ◽

Emerging Multinationals ◽

Internationalization Strategies ◽

American Case ◽

Key Resources

Purpose – The purpose of this paper is to develop an analytical framework that challenges the condescending view of multinationals of emerging countries. In this paper, it is showed that emerging multinational companies (EMNCs) developed valuable resources that leveraged their internationalization strategies. Design/methodology/approach – An exploratory approach was used to investigate the internationalization strategies of EMNCs. A qualitative study was built on secondary data sources, particularly analysis of cases of the internationalization of Latin American companies. Findings – The internationalization strategies deployed by EMNCs are similar to the strategies of traditional multinationals (firms of developed countries). Similarly, EMNCs exploit, acquire or defend their resources in foreign markets. Additionally, the selection of each strategy depends on the availability, transferability and substitutability of the resources involved in the internationalization. Research limitations/implications – The traditional approaches that study the role of resources in the internationalization of the EMNCs have some shortcomings. It is worth conducting additional research including the approach developed here to advance in the comprehension of the behavior of EMNCs. Practical implications – Managers must identify and develop key resources to invest abroad. Additionally, managers need to take into account the characteristics of the resources of their firms to select an adequate strategy abroad. Originality/value – This paper shows that EMNCs are not resource laggards. Consequently, theoretical and empirical evidence is provided to advance the development of comprehensive theories of the internationalization of EMNCs. This paper offers academics and practitioners with a new focus to analyze the internationalization of EMNCs which are recognized as a driving force of the global economy.

Download Full-text

CONCEPTUAL PRINCIPLES OF ACHIEVING INTELLECTUAL LEADERSHIP

Economics & Education ◽

10.30525/2500-946x/2021-2-18 ◽

2021 ◽

Vol 6 (2) ◽

pp. 100-104

Author(s):

Liudmyla Tsymbal

Keyword(s):

Economic Development ◽

Intellectual Capital ◽

Global Economy ◽

Physical Capital ◽

Developed Countries ◽

Educational Process ◽

High Tech ◽

The Impact ◽

Intellectual Leadership

The article identifies the key conceptual foundations for the formation of intellectual leadership of economic entities, including countries as specific actors in the global economy. Thorough preconditions for increasing the level of economic development and the impact of education have been identified. It is determined that historical concepts and modern realities of economic activity only actualize the role of education and enlightenment in the economic development of the national economy and ensuring its competitiveness. The strategies of increasing the competitiveness of individual countries of the world are analyzed, their key priorities in the conditions of formation of the knowledge economy are determined. The evolution of views on the role of human and intellectual capital in increasing the welfare of countries, the impact on GDP and other macroeconomic indicators is described. The ratings of countries are analyzed, in particular by the level of investment in intellectual capital and the structure of their GDP, which confirms the dominance of science-intensive economic activities. In addition, it was determined that the leading countries are characterized by increasing the role of knowledge-intensive activities, increasing the share of intangible assets, redistribution of capital of leading international companies and increasing research spending, increasing investment in human and intellectual capital, increasing exports of high-tech products. Analytical assessment confirms the advanced development of science-intensive industries in countries with developed economies, which creates the need for training and retraining of specialists needed for such industries. In modern conditions, the educational process ceases to be predominantly the prerogative of young people, and becomes a lifelong process, which increases spending on education in developed countries, but without denying the significant asymmetries on this indicator. Research confirms the direct relationship between the quality of human and physical capital and economic development, which is typical of highly developed countries, one of the main reasons for the development lag of the poorest countries. In addition, the article substantiates the key factors of intellectual leadership and their impact on the development of economic development strategies.

Download Full-text

The Rise of Transnational Corporations from Developing Countries in the Second Half of the 20th Century

Istoriya ◽

10.18254/s207987840017589-6 ◽

2021 ◽

Vol 12 (11 (109)) ◽

pp. 0

Author(s):

Alexey Kuznetsov

Keyword(s):

Developing Countries ◽

Foreign Direct Investment ◽

Direct Investment ◽

Global Economy ◽

World Order ◽

Developed Countries ◽

Global South ◽

Business Environment ◽

Outward Foreign Direct Investment ◽

Foreign Direct Investment Stock

The article highlights three stages of the formation of multinationals from developing countries. Although first Argentine TNCs appeared at the turn of the 19th — 20th centuries, in the majority of the Global South countries TNCs appeared in the 1960s — 1980s. With the collapse of the bipolar world order, which in many developing countries was accompanied by significant internal political and economic transformations, the second stage of foreign expansion of TNCs from the Global South began. Indeed, in 1990 they accounted for 6 % of global outward foreign direct investment stock, while the figure was 10 % by the end of 2005. We date the beginning of the third stage to the financial and economic crisis of 2007—2009, since multinationals from developing countries as a whole are more successfully overcoming the period of turbulence in the global economy. By the end of 2020, they accounted for 22 % of global outward foreign direct investment stock, and during the COVID-19 pandemic crisis they generally exported more than 50% of the capital. The modern foreign expansion of such TNCs has many reasons, differs greatly from country to country, and often differs slightly from the specifics of Western multinationals. At the same time, initially, “late internationalization” in developing countries had two main vectors — the use of new opportunities for South — South cooperation and overcoming, through the creation of subsidiaries in highly developed countries, the shortcomings of the business environment of “catching up” countries.

Download Full-text

Dynamic factor models: Does the specification matter?

SERIEs ◽

10.1007/s13209-021-00248-2 ◽

2021 ◽

Author(s):

Karen Miranda ◽

Pilar Poncela ◽

Esther Ruiz

Keyword(s):

Factor Models ◽

Model Specification ◽

Dynamic Factor ◽

Dynamic Factor Models ◽

Number Of Factors ◽

Time Varying Parameters ◽

Out Of Sample ◽

Mixed Frequency Data ◽

Natural Way ◽

Factor Estimation

AbstractDynamic factor models (DFMs), which assume the existence of a small number of unobserved underlying factors common to a large number of variables, are very popular among empirical macroeconomists. Factors can be extracted using either nonparametric principal components or parametric Kalman filter and smoothing procedures, with the former being computationally simpler and robust against misspecification and the latter coping in a natural way with missing and mixed-frequency data, time-varying parameters, nonlinearities and non-stationarity, among many other stylized facts often observed in real systems of economic variables. This paper analyses the empirical consequences on factor estimation, in-sample predictions and out-of-sample forecasting of using alternative estimators of the DFM under various sources of potential misspecification. In particular, we consider factor extraction when assuming different number of factors and different factor dynamics. The factors are extracted from a popular data base of US macroeconomic variables, widely analyzed in the literature without consensus about the most appropriate model specification. We show that this lack of consensus is only marginally crucial when it comes to factor extraction, but it matters when the objective is out-of-sample forecasting.

Download Full-text

Industry 4.0 and Developing Countries: Innovation Perspective of Ethiopia, India and Bangladesh

International Journal for Modern Trends in Science and Technology - RTT2020 ◽

10.46501/ijmtst060615 ◽

2020 ◽

Vol 6 (6) ◽

pp. 62-70

Author(s):

Amrut Rao ◽

Ravindra Pathak ◽

Ashraf Mahmud Rayed

Keyword(s):

Developing Countries ◽

Industry 4.0 ◽

Global Economy ◽

Information Technologies ◽

Technological Development ◽

Value Added ◽

Developed Countries ◽

Intelligent Manufacturing ◽

Smart Manufacturing ◽

Efficient Production

Ethiopia, India and Bangladesh are raising economic power, but have not yet integrated very much with the global economy and still have not achieved their potential in context of technology, globalization, and international competitiveness like developed countries. These countries have much strength, but at the same time , are facing many challenges in the increasingly competitive and fast changing global economy. The main key strengths of these courtiers are their large domestic market, young and growing population, a strong private sector with experience in market institutions, and a well developed legal and financial system. In today’s environment of global competition, technological development and innovation; companies, especially manufacturing, are forced to reconfigure their manufacturing and management processes. Industry 4.0 and intelligent manufacturing are part of a transformation, in which manufacturing and information technologies have been integrated to create innovative systems of manufacturing, management and ways of doing business. This system allows optimizing manufacturing, to achieve greater flexibility, efficient production processes and generate a value added proposal for their customers, as well as to provide a timely response to their market needs. The objective of this work is to explore the Industry 4.0, smart manufacturing, environment requirement and relation of innovation in perspective of developing countries.

Download Full-text

How Can National Competitiveness of Less Developed Countries be Enhanced? : A Case Study of Laos

10.26686/wgtn.17000638 ◽

2021 ◽

Author(s):

◽

Phoxai Inthaboualy

Keyword(s):

Natural Resources ◽

Global Economy ◽

Developing Economies ◽

Critical Role ◽

Developed Countries ◽

Less Developed Countries ◽

Global Integration ◽

Factor Endowments ◽

National Competitiveness ◽

The Government

<p>The current literature focuses primarily on the national competitiveness of developed or developing economies. However, minimal research exists on understanding the national competitiveness of less developed countries (LDCs) whose strengths in factor endowments, government institutions and the extent of global integration are not the same as those of developed or developing countries. This study aims to fill this research gap by exploring factors contributing to the competitiveness of Laos. Laos is a small, poor and land-locked country in Southeast Asia with rich natural resources. To achieve the study objectives, 20 semi-structured interviews were conducted with senior government officials, industrial representatives, professors and NGOs in Laos. The findings suggest three key factors are critical for enhancing Lao competitiveness: factor endowments, the role of government, and global integration. Laos‘ factor endowments include hydropower, mining, agriculture, garment and textile industries, and services. Laos is interacting more with the global economy as it gets set to embrace membership of the World Trade Organisation after approximately 15 years of membership of ASEAN. The government is playing a critical role by developing Lao factor endowments and developing policies required for global integration. However, the country faces challenges of value addition to the existing natural resources, developing and leveraging human capital, and further improvement in rules and regulations.</p>

Download Full-text

Family Businesses in Global Economy and Evaluating their Financial Health Using Bankruptcy Models

SHS Web of Conferences ◽

10.1051/shsconf/202112903031 ◽

2021 ◽

Vol 129 ◽

pp. 03031

Author(s):

Maria Truchlikova

Keyword(s):

Financial Distress ◽

Global Economy ◽

Agricultural Sector ◽

Prediction Models ◽

Predictive Accuracy ◽

Value Added ◽

Business Environment ◽

Bankruptcy Prediction ◽

Family Businesses ◽

Financial Health

Research background: Predicting and assessing financial health should be one of the most important activities for each business especially in context of turbulent business environment and global economy. The financial sustainability of family businesses has a direct and significant influence on the development and growth of the economy because they still represent the backbone of the economy and play an important role in national economies worldwide accounting. Purpose of the article: We used in this article the financial distress and bankruptcy prediction models for assessing financial status of family businesses in agricultural sector. The aim of the paper is to compare models developed by using three different methods to identify a model with the highest predictive accuracy of financial distress and assess financial health. Methods: The data was obtained from Finstat database. For assessing the financial health of selected family businesses bankruptcy models were used: Chrastinova’s CH-Index, Gurcik’s G-Index (defined for Slovak agricultural enterprises) and Altman Z-score. Findings & Value added: This article summarizes existing models and compares results of assessing financial health of family businesses using three different models.

Download Full-text