scholarly journals INFLUENCE OF GOVERNMENT CREDIT RISK ON PPP PROJECTS IN OPERATION STAGE

2021 ◽  
Vol 25 (3) ◽  
pp. 216-227
Author(s):  
Yining Zhou ◽  
Jicai Liu
Keyword(s):  
Credit Risk ◽  
Credit Rating ◽  
Negative Impact ◽  
Optimal Choice ◽  
Default Probability ◽  
Effort Level ◽  
Contractual Relationship ◽  
Allocation Ratio ◽  
Government Credit ◽  
The Government

In PPP projects, insufficient risk management may lead to the breakdown of partnerships and even project failures. Among them, the government credit risk is regarded as unbearable risk and a key risk affecting PPP projects because of its high frequency and impact. Therefore, based on the contractual relationship between both sides, a principal-agent model for the optimal choice of investors and the government under the government default probability is constructed. This paper explored the quantity relationship of the government credit risk and the project utility through analysing the effect of government default probability perceived by both parties on the investor’s optimal effort level and government allocation ratio. The results demonstrate that the government credit risk will decrease the effort level of investors and have a negative impact on the utility of the project. Furthermore, the government’s modification of the contract allocation ratio based on its own credit rating can offset the negative impact of its credit risk on the effectiveness of the project. But this regulatory effect is limited. The findings effectively provide some insights and theoretical basis for solving the negative effects of government credit risk.

scholarly journals DEBTOR RATING AS A TOOL OF DEBT MANAGEMENT

2020 ◽  
pp. 121-129
Author(s):  
I. Hanus ◽  
I. Plikus ◽  
T. Zhukova
Keyword(s):  
Credit Risk ◽  
Default Risk ◽  
Credit Rating ◽  
Average Rate ◽  
Credit Ratings ◽  
Default Probability ◽  
Probability Of Default ◽  
Corporate Default ◽  
Ifrs 9 ◽  
Credit Losses

IFRS 9 “Financial Instruments” introduced a new model of impairment based on expected credit losses, in which the impairment is based on expected credit losses, and the provision for losses is recognized before the credit loss, i.e. companies recognize losses immediately after initial recognition of the financial asset and revise the amount of the provision for expected credit losses at the reporting date. To create a provision for credit losses, IFRS 9 allows using several practical tools, including the rating debtors’ method. However, IFRS 9 does not express a clear opinion on how the expected credit loss for receivables should be calculated. In this regard, in our opinion, it is possible to apply an individual approach to the choice of credit risk assessment method, determining the debtor’s credit rating and the choice of the default probability, and so on. The paper substantiates that the debtors’ rating by the level of corporate default risk is a method that can reliably assess the probable risks. This method uses credit ratings. The paper proposes using the international credit ratings, which will allow a more objective creditworthiness assessment of both foreign and domestic debtors, taking into account macroeconomic factors used by rating agencies to determine the class of credit risk. The article presents the credit rating of Ukraine and changes in the credit rating of Ukraine for 15 years (2004-2019), shows the model of applying the international default probability rates. Two variants of applying this model are offered. Under the first option, the total amount of receivables from the counterparty / group of debtors is multiplied by the percentage of default probability. The second option involves applying the selected ratio according to the credit rating class at the last stage of calculating the expected credit losses by the simplified method. Due to the fact that there is no single approach to choosing the probability of default and everything relies on expert opinion, we propose using the data of the Annual Global Corporate Default And Rating, which is an analysis of market conditions in the world, the corporate defaults overview, the coefficient of bankruptcy probability of economic entities for each of the risk groups. The paper proposes using the annual rate of corporate defaults, as the expected credit losses must be calculated by companies on a regular basis and revalued at least once a year (on the balance sheet date). It is substantiated that the use of the average rate (Average Rate) to assess the probability of default, it is this rate that takes into account the past experience of companies that are in the corresponding zone of default risk for all the periods under consideration.

scholarly journals Country risk at investing in capital markets – the case of Italy

2019 ◽  
Vol 17 (2) ◽  
pp. 440-448 ◽  
Author(s):  
Božena Chovancová ◽  
Peter Árendáš ◽  
Patrik Slobodník ◽  
Iveta Vozňáková
Keyword(s):  
Economic Development ◽  
Credit Risk ◽  
Capital Markets ◽  
Credit Rating ◽  
Risk Measurement ◽  
Country Risk ◽  
Government Bonds ◽  
Risk Quantification ◽  
The Government

Given the current turbulences on the European capital markets, as well as the expectations of a new recession, it is possible to expect that the risk of individual countries and their capital markets will increase significantly. This is particularly the case of those countries, which have long-term problems with economic instability and imbalances. The basis for country risk quantification is the country credit rating and credit risk of the government bonds. The market-based methods react often differently, as their reactions to the actual market developments are more flexible. The purpose of this paper is to compare various methods of country risk measurement. The study is focused on the country risk of Italy, a country that experienced a turbulent economic development over the last two decades. The results show that the CPFER method and sovereign ratings show a similar level of country risk, while the market-based methods show a higher level of country risk.

scholarly journals Empirical Credit Risk Ratings of Individual Corporate Bonds and Derivation of Term Structures of Default Probabilities

2019 ◽  
Vol 12 (3) ◽  
pp. 124 ◽  
Author(s):  
Takeaki Kariya ◽  
Yoshiro Yamamura ◽  
Koji Inui
Keyword(s):  
Credit Risk ◽  
Term Structure ◽  
Credit Rating ◽  
Default Probability ◽  
Corporate Bond ◽  
Rating System ◽  
Financial Industry ◽  
Cross Sectional ◽  
Risk Rating ◽  
Rating Method

Undoubtedly, it is important to have an empirically effective credit risk rating method for decision-making in the financial industry, business, and even government. In our approach, for each corporate bond (CB) and its issuer, we first propose a credit risk rating (Crisk-rating) system with rating intervals for the standardized credit risk price spread (S-CRiPS) measure presented by Kariya et al. (2015), where credit information is based on the CRiPS measure, which is the difference between the CB price and its government bond (GB)-equivalent CB price. Second, for each Crisk-homogeneous class obtained through the Crisk-rating system, a term structure of default probability (TSDP) is derived via the CB-pricing model proposed in Kariya (2013), which transforms the Crisk level of each class into a default probability, showing the default likelihood over a future time horizon, in which 1545 Japanese CB prices, as of August 2010, are analyzed. To carry it out, the cross-sectional model of pricing government bonds with high empirical performance is required to get high-precision CRiPS and S-CRiPS measures. The effectiveness of our GB model and the S-CRiPS measure have been demonstrated with Japanese and United States GB prices in our papers and with an evaluation of the credit risk of the GBs of five countries in the EU and CBs issued by US energy firms in Kariya et al. (2016a, b). Our Crisk-rating system with rating intervals is tested with the distribution of the ratings of the 1545 CBs, a specific agency’s credit rating, and the ratings of groups obtained via a three-stage cluster analysis.

Analysis of Impacts Malaysia's Territorial Limitation (Lockdown) Policy on Indonesia-Malaysia Border Area, Sanggau District

2020 ◽  
Vol 11 (1) ◽  
pp. 156-156
Author(s):  
Ira Patriani
Keyword(s):  
Social Issues ◽  
Negative Impact ◽  
Research Approach ◽  
Border Area ◽  
Border Areas ◽  
The Government ◽  
Using Data ◽  
Virus Spreading ◽  
Kinship Ties ◽  
Collection Methods

Border areas, is one of affected area on COVID_19 this present. Many of people cn not go out as usually, adding almost each country has to implement their territorial limitation (lockdown policy) to minimalize this virus spreading. One of Malaysia State, where very close and get direct border with Indonesia. This research took place at Sanggau District, Entikong, Gun Tembawang Village.The research approach used is qualitative, using data collection methods in the form of interviews, observations, and documentation supported by interviews with the theoretical approach to the negative and positive aspects on policy implementation. Research results, The results stated that the lockdown activities of Malaysia which were affected by the corona virus outbreak needed to be carried out in an effort to minimize the spread of the virus outbreak. Although of course it has a negative impact on the country's economic structure, social issues and other sector. In implementing this lockdown, there is a need for cooperation between the government and the community as well as an agreement with neighboring countries in terms of the mobility of residents closest to each other's territory on exemptions in order to realize social welfare and public health without limiting the origin of the state, religion, community and profession. Especially in border areas where mobility and kinship ties have always been closer than in other regions. Keywords: Border area, lockdown policy, covid_19

On the Major Differences between the Banking Systems of the EAEU States

2020 ◽  
Vol 26 (4) ◽  
pp. 397-406
Author(s):  
T. E. Chekanova
Keyword(s):  
Financial Stability ◽  
Systems Approach ◽  
Negative Impact ◽  
Banking Regulation ◽  
Member States ◽  
Banking Systems ◽  
Significant Negative Impact ◽  
The Difference ◽  
The Government ◽  
Major Factors

The presented study examines the problems of integration of the national banking systems of the member states of the Eurasian Economic Union (EAEU).Aim. The study aims to examine the major differences in various aspects of functioning of banking systems in the EAEU member states in terms of their impact on integration processes.Tasks. The author identifies the most prominent features of the banking systems of the EAEU states; reveals the depth of the existing differences through a comparative analysis of various indicators of national banking systems; outlines ways of overcoming integration problems associated with differences in the banking sectors of the Union states.Methods. This study is based on universal general scientific methods and elements of comparative, functional, and economic analysis within the framework of a systems approach. The author uses regulatory documents and banking reports of the EAEU states, statistical and analytical materials of the Eurasian Economic Commission (EEC), and data of Moody’s international rating agency.Results. The study identifies a number of aspects that contain the major differences in the functioning of banking systems in the EAEU member states; highlights the disproportions in the scale, level of development, financial stability, and risks of the banking spheres of the Union states; comparatively analyzes the proportion of banking and non-banking structures in the system and the share of the government and non-resident companies in the capital of banks; marks the difference in the pricing of banking services; determines differences in the existing approaches to banking regulation and the established standards; analyzes the major differences in the legislative acts of the central banks and governments of the EAEU member states and in the terms and definitions used. According to the results of the study, the major factors hindering the development of integration processes between the banking systems of the EAEU states are identified.Conclusions. The existing differences between the banking systems of the EAEU countries are diverse and multifaceted. The author states that the aspects addressed in this study have a significant negative impact on the further development of integration processes, describing the major directions and actions of the member states aimed at minimizing the exiting differences, which are required to facilitate the convergence of the states and the transition towards a common financial market.

KAJIAN DAMPAK KEBIJAKAN PENUTUPAN LOKALISASI TELEJU OLEH PEMERINTAH KOTA PEKANBARU

2017 ◽  
Vol 15 (2) ◽  
pp. 78
Author(s):  
M. Zainuddin
Keyword(s):  
Social Order ◽  
Qualitative Method ◽  
Negative Impact ◽  
Early Stage ◽  
Policy Research ◽  
Research Approach ◽  
Policy Content ◽  
The Government ◽  
Closure Policy ◽  
The Impact

This research to analyze the impact of closure policy Teleju brothel by Pekanbaru govermentin 2010. Guidelines for works are Pekanbaru Local Regulations No. 12 of 2008 on Social Order-liness. Closure this brothel inflicts positive and negative impact for society.The research wasconducted to obtain early stage formula for the government to take action against the prostitu-tion activities. This research uses policy research approach with a qualitative method, becausein prostitution activities and prohibition by goverment is an assessment that needs to be done byanalyzing documents and unstructured interview.The results showed that after the closing of the Teleju brothel have an impact on the deploy-ment of a prostitution and affect the economy of the surrounding residents. Government seeksto tackle prostitution in Pekanbaru by moving the brothel, conduct regular raids and providetraining. The effort is considered to be less than the maximum because the handling is not basedon the root of the problem and not programmed properly. There are several causes of failure ofgovernment to overcome the prostitution problem in Pekanbaru, including: policy content isless focus on the prostitution problem, the government did not proceeds with data, lack of finan-cial support, contra productive programs between local government with the police and TNI,and the policy object is difficult to be given understanding.

Community Development and Role of Tourism: A Case Study of Tourist Destination Manali in Himachal Pradesh (India)

2016 ◽  
Vol 2 (1) ◽  
Author(s):  
Sunil
Keyword(s):  
Traffic Congestion ◽  
Local Community ◽  
Negative Impact ◽  
Himachal Pradesh ◽  
Tourism Industry ◽  
Cultural Development ◽  
Infrastructure Development ◽  
Tourism Sector ◽  
The Government ◽  
Agriculture Products

Tourism sector has a significant role in the economic development of our country. Tourism sector has contributed 6.88 percent to the GDP and has 12.36 percent share in employment (direct and indirect) in the year 2014. It has also a significant share in foreign exchange earnings. The benefit of tourism mostly goes to the local community (Sonya & Jacqueline, Mansour E. Zaei & Mahin E. Zaei, 2013). In this paper, an attempt has been made to assess how the tourism industry has created an opportunity for the economic, political, social and cultural development of the local community at Manali in Himachal Pradesh (India) and also tried to study the problems that are associated with the tourism in the region. The study found that the tourism industry has been extending its contribution for the development of local community at Manali. It has been providing employment, business and investment opportunities, revenue generation for the government, encouraging the community to promote and preserve its art, culture and heritage, raising the demand of agriculture products, provided opportunities for local people to run and work in the transport business and by promoting MSMEs in the region. Besides the opportunities, the tourism industry has also added many problems to the local community. Traffic congestion, increase in water and air pollution, solid waste generation, degradation of the cultural heritage, ecological imbalances, rise in cost of living, increase in crime, noise and environment pollution, migration of people to the region, negative impact on local culture, and extra pressure on civic services during the tourists season, are the problems associated with the tourism. The study suggest that effective management of natural resources, dissemination of environment protection information, involvement of local community in decision making, professionalization in the working of local administration, extending the support of government in sponsoring the events, infrastructure development, tracking records of migrants with the help of local community to curb the crime rate, promotion and preservation of art, culture and heritage, involvement of NGOs, compliance of the rules can make tourism more beneficial in the development of local community.

scholarly journals The Impact of Environmental Regulation on the Location of Pollution-Intensive Industries in China under Agglomeration Effect

2021 ◽  
Vol 18 (8) ◽  
pp. 4045
Author(s):  
Yinhao Wu ◽  
Shumin Yu ◽  
Xiangdong Duan
Keyword(s):  
Environmental Regulation ◽  
Local Economic Development ◽  
Negative Impact ◽  
Empirical Test ◽  
Mediating Effect ◽  
Production Costs ◽  
Agglomeration Effect ◽  
The Government ◽  
Pollutant Discharge ◽  
The Impact

Pollution-intensive industries (PIIs) have both scale effect and environmental sensitivity. Therefore, this paper studies how environmental regulation (ER) affects the location dynamics of PIIs under the agglomeration effect. Our results show that, ER can increase the production costs of pollution-intensive firms (PIFs) by internalizing the negative impact of pollutant discharge in a region, and thus, directly reduces the region’s attractiveness to PIFs. Meanwhile, ER can indirectly reduce the attractiveness of a region to PIFs by reducing the externality of the regional agglomeration effect. Moreover, these influences are regulated by the level of local economic development. Based on the moderated mediating effect model, we find evidence from the site selection activities of newly built chemical firms in cities across China. The empirical test shows that compared with 2014, the proportion of the direct effect of ER to the total effects significantly decreased in 2018, while the proportion of indirect effects under the agglomeration effect increased significantly. Our findings provide reference for the government to design effective environmental policies to guide the location choice of new PIFs.

Impact of Dividend Tax Change on the Payout Policy of Indian Companies

2019 ◽  
Vol 20 (5) ◽  
pp. 1282-1291
Author(s):  
Sanjay Dhamija ◽  
Ravinder Kumar Arora
Keyword(s):  
Negative Impact ◽  
Payout Policy ◽  
Tax Law ◽  
Dividend Payout ◽  
Inside Ownership ◽  
Regulatory Changes ◽  
Before And After ◽  
The Government ◽  
The Impact ◽  
Dividend Tax

The article examines the impact of regulatory changes in the tax on dividends on the payout policy of Indian companies. The tax law was recently amended to levy tax on dividends received by large shareholders. As the promoters group is the largest shareholder, this is expected to have a negative impact on the payout policy of companies. Furthermore, companies with larger promoter holdings have a higher motivation to reduce their payout. The study covers 370 companies present in the BSE 500 Index and compares the dividend payout of the companies before and after the introduction of tax levy. The study finds that the newly introduced tax indeed caused a shift in the dividend policy of companies, particularly those companies which have high levels of inside ownership. The findings have significant implications for companies, investors and the government.

Financial and social efficiency analysis of Islamic microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marwa Fersi ◽  
Mouna Bougelbène
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Risk Taking ◽  
Negative Impact ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Content Type ◽  
Islamic Microfinance ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.Design/methodology/approachThe stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.FindingsThe overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.Originality/valueThis paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

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