An analysis of factors affecting the profits of new firms in Spain: Evidence from the food industry

Using the logistic model, this article investigates the influence of financial factors on gaining profits for new firms in the Spanish food industry. Specifically, the firms founded separately during the crisis period and during the postcrisis period are observed for their first three years. The findings suggest that indebtedness (for both periods), previous profitability (for the postcrisis period) and accounts payable (for the crisis period) were most frequently statistically significant in the logistic model. Hence, for new firms, controlling debt burden, accumulating internally generated funds and using payables to establish business relationships can help to gain profits. Firm size and asset rotation were significant in the first year (especially during the postcrisis period), with a positive relationship to profits. Given that the food industry is highly competitive, enlarging firm size to reach efficiencies of scale and using a low-price strategy with high asset rotation to obtain market share are effective marketing strategies for new firms. This article contributes to the empirical studies about the financial effects on new firms' profits in the food industry; it can also help potential entrepreneurs make better decisions about starting new businesses and help to manage new firms better in different macroeconomic environments.

Business Education in the USA

The chapter explores drivers, dynamics, and developments of business education in American colleges and universities. A contemporary business education in the U.S. is historically rooted in medieval Europe. It has progressed through several developmental stages and four industrial revolutions. Critical drivers affect American universities and colleges, bringing about strategic disruptions, technological and pedagogical innovations, and exerting competitive pressures for change on higher education. They also create opportunities for the development and growth in the post-COVID prospective, which is likely to be different from previous patterns and trends. These factors of impact range from stagnant domestic and falling international student enrollments, high student loan debt burden, and skyrocketing college tuition to the devastating impacts of the COVID pandemic. In examination of implications of the 4IR and emerging socio-economic trends for B-schools, the chapter discusses developmental trends, outlook, and emerging instructional innovations.

Proactively Facing Financial Crisis: A Case Study

It has been 21 years since the 21st century has started. Over this period of 21 years the world has faced 2 severely affecting financial crisis. This case study discusses 2 such examples where a major damage was experienced by most of the countries specifically talking about the financial and the economic condition. In addition, the reasons caused this crisis are discussed in detail. However, to all of these causes there is a remedy stated which states how a country be ready to face such a situation where a country falls completely, financially and economically. Keywords: Financial crisis 2007-08, COVID-19, Declaration of pandemic, Lockdowns, Russia-Saudi Arabia oil price war, Easy credit conditions, Increase debt burden or overleverage, case study.

Chinese-Funded Electricity Generation in Sub-Saharan Africa and Implications for Public Debt and Transition to Renewable Energy

While China has been increasingly contributing to the recent growth in electricity generation in sub-Saharan Africa (SSA), the effects of China-funded investment on host countries’ debt burden and transition to renewable energy sources have not been sufficiently explored. Drawing on secondary data, combined with deep dive studies of Ethiopia and Uganda, this paper shows that despite significant liberalisation of the power sector in SSA, Chinese investments in the electricity industry continue to follow state-led project contract-based models. We show that this approach has failed to encourage Chinese firms to build compelling investment portfolios for competitive procurements within the region and, instead and inadvertently, it has exacerbated the debt burden of host country governments. Second, in spite of the global drive towards climate resilient energy generation, Chinese funding of electricity generation in SSA is not sufficiently channelled towards modern renewable energy sources such as wind and solar power that could reduce vulnerability to climate change. While recognising that the private sector-led competitive model of power generation is not without limitations, we argue that SSA’s electricity generation strategy that leads to less public debt and more climate resilience involves increased involvement of Chinese investment in the competitive model, with more diversification of such investment portfolios towards modern renewables such as wind and solar energy resources.

An Exploratory Investigation into the Farm Credit Market in New Zealand

<p>An increasing interest in the finance of farming in New Zealand has emerged in recent years. This is a result of three major developments: (i) the increasing reliance of the farm sector on external sources of finance. For instance, debt per farm has been increasing at an annual compound rate of 12% between 1963 and 1970; (ii) the effect of recent economic phenomena, such as falling product prices and a high rate of internal inflation, which have highlighted the question of a farm debt "burden"; (iii) the increasing sophistication of the New Zealand economy. This has offered the community alternative investment opportunities and has raised the question of availability of finance for farmers to sustain and increase their production.</p>

An Exploratory Investigation into the Farm Credit Market in New Zealand

<p>An increasing interest in the finance of farming in New Zealand has emerged in recent years. This is a result of three major developments: (i) the increasing reliance of the farm sector on external sources of finance. For instance, debt per farm has been increasing at an annual compound rate of 12% between 1963 and 1970; (ii) the effect of recent economic phenomena, such as falling product prices and a high rate of internal inflation, which have highlighted the question of a farm debt "burden"; (iii) the increasing sophistication of the New Zealand economy. This has offered the community alternative investment opportunities and has raised the question of availability of finance for farmers to sustain and increase their production.</p>

Analysis of Difference in Household Debt across Regions of Thailand

This study analyzed the determinants of household debt in Thailand at both the regional and the national levels using the panel data of 76 provinces over the years 2009–2017. The Panel Quantile Regression Model was employed to enable the analysis of the formation of household debt ranging from low to high levels. The findings indicate that household indebtedness in different regions has been shaped by a variety of factors, and that households in the same region with different levels of debt burden would experience different impacts or outcomes. We also tested the convergence of household debt, which produced the thought-provoking finding that household debt convergence failed to occur at both the national and the regional levels, while household debt divergence was found instead at the statistical significance level in some regions. The growing debt divergence phenomenon might be an outcome indicator of the unequal access to credit sources among different households in Thai society.

Does Air Pollution Impact Fiscal Sustainability? Evidence from Chinese Cities

Fiscal sustainability is an issue of great concern for governments globally and air pollution control has become an important factor affecting fiscal sustainability. This study aims to examine the impact of air pollution on fiscal sustainability in the short and long run. We conducted an empirical analysis based on air pollution and local government debt data on China’s prefecture-level cities in 2014–2019, using regression discontinuity design (RDD) and a panel data model. The results show that air pollution reduces the debt burden of governments in the short run. However, in the long run, addressing the negative impacts of air pollution adds to the debt burden of local governments, hindering fiscal sustainability. Fiscal freedom and the level of public services significantly moderate the negative impact of air pollution on fiscal sustainability. A higher level of fiscal freedom generally indicates a greater incentive for local governments to raise pollutant emission standards, strengthen the construction of green infrastructure, and subsidize green enterprises. Furthermore, a higher level of public services reflects better infrastructure and higher levels of investment in environmental protection, which help to reduce the negative impact of air pollution. The governments are suggested to take measures to effectively control air pollution, so as to enhance fiscal stability in the long run.

External Debt Burden and Infrastructural Development Nexus in Nigeria: An ARDL Approach (1981-2020)

This study focused on external debt burden and infrastructural development nexus in Nigeria using data spanning between the periods 1981 to 2020 by employing the use of Autoregressive Distributed Lag Model (ARDL) and granger causality test as the major statistical techniques of analysis. From the findings, the coefficient of error correction term shows that about 70 percent of the discrepancy between the actual and the long run or equilibrium value of infrastructural development is corrected or eliminated each year. The coefficient of determination (R2) is 0.680 which shows that about 68 percent variations in the infrastructural development were explained by the independent variables. The Augmented Dickey Fuller (ADF) unit root test shows that all variables were stationary at first difference. The results for the Bounds test reveal that there is a long run relationship among the variables. This is because the F-statistics value (5.194) is greater than upper Bounds critical values at 5% level of significant. The ARDL results show that external debt, domestic debt and inflation rate have a negative impact on infrastructural development in the long run while exchange rate and interest rate has a positive effect on infrastructural development in the long run. Also, domestic debt and exchange rate were found to have a significant impact on infrastructural development while external debt, inflation rate and interest rate were found to be insignificant in the long run. Furthermore, the granger causality test results indicate while there is no causality between external debt and infrastructural development, there seems to be a unidirectional causality between domestic debt and infrastructural growth in Nigeria. The study concludes that federal government of the country should cut down excessive borrowings and that the existing ones are invested in projects that would eventually generate enough returns to defray such debts accordingly. Also, an adoption of policy framework that will ensure macroeconomic stability such as price stability, job creation, increased output, political stability, etc. becomes fundamental in getting rid of heavy reliance on external debt in the country.

LAND-LEASING BEHAVIOR, LOCAL OFFICIALS’ PROMOTIONS, AND CHINESE CITIES’ DEBT RISKS

This study first analyzes how local governments’ land-leasing behaviors affect Chinese cities’ debt risk then examines the impact of officials’ promotion mechanisms on debt risk in China’s urban land bank system. The land-leasing behavior is reflected through three indicators, namely, land-leasing revenue, land-leasing scale, and land financial dependence level. Two new indicators are constructed to measure the local government’ debt risk from the perspective of debt scale and debt repayment: the debt scale risk and debt burden risk. Empirical analyses are based on the data of 281 prefecture-level cities from 2006–2015. The main findings are twofold. First, the debt scale risk is positively affected by the land-leasing revenue, and officials’ promotion pressure. The debt burden risk is positively affected by the land financial dependence and officials’ promotion pressure. Second, the officials’ promotion pressure significantly enhances the positive effect of land-leasing revenue on the debt scale risk. Local officials, who are under promotion pressure, are inclined to expand the size of urban investment bonds, which increases debt scale risk.