Foreign Direct Investment and Its Impact on The Regional Level: A Prospective Analysis

Some countries in development like China, the Philippines, Nigeria, Pakistan, Bangladesh, Vietnam and Ukraine do an active promotion in order to raise foreign direct investment (FDI) under the proposal of a positive effect in economic growth while implementing this type of fundraising. Thus, it constitutes an important source of external financing, allowing increases in productivity through technologic transfer as well as rises in competitiveness, efficiency in the managerial models, and expand the countries’ exporting capabilities. After the economic crisis experienced in the 80’s, Latin America, specifically countries like Argentina, Brazil and Mexico, that have based their financing in loans, stopped to raise money by these means when the crisis appeared, arising as an alternative the FDI, also on account of the foreign creditors demanding the payment of their issued resources and the warning of not giving any more financing until these countries restructure their economies, it was established the capital stock of the recipient economy. In this context, it was necessary to implement structural reforms, which were contemplated in the “Washington Consensus”, such as price stabilization and fiscal deficit control with the purpose of recovering the trust to investors and reactivating the capital flow through loans or foreign direct investment aimed at Latin America. In 1990, foreign direct investment became the primary source of external financing to peripheral countries (Aitken y Harrison, 1999:1).

Financing Efficiency Evaluation and Influencing Factors of Hydrogen Energy Listed Enterprises in China

Existing studies of financing efficiency concentrate on capital structure and a single external environment or internal management characteristic. Few of the studies include the internal and external financing environments at the same time for hydrogen energy industry financing efficiency. This paper used the data envelopment analysis (DEA) model and the Malmquist index to measure the financing efficiency of 70 hydrogen energy listed enterprises in China from 2014 to 2020 from both static and dynamic perspectives. Then, a tobit model was constructed to explore the influence of external environment and internal factors on the financing efficiency. The contributions of this paper are studying the internal and external financing environments, and integrating financing cost efficiency and capital allocation efficiency into the financing efficiency of hydrogen energy enterprises. The results show that, firstly, the financing efficiency of China’s hydrogen energy listed enterprises showed an upward trend during the years 2014–2020. Secondly, China’s hydrogen energy enterprises mainly gather in the eastern coastal areas, and their financing efficiency is more than that in western areas. Thirdly, the regional economic development level, enterprise scale, financing structure, capital utilization efficiency and profitability have significant effects on the financing efficiency. These results can promote the achievement of “carbon neutrality” in China.

Research on the Impact of Social Credit Improvement on the Debt Financing of Agricultural Enterprises

This study takes China’s A-shares agricultural companies as the research subjects and examines the influence of social credit environment on the debt financing of agricultural enterprises. This study has found that the improvement of social credit environment can significantly increase the debt financing scale of agricultural enterprises. After a placebo test, the replacement of explained variables, and the control of industry fixed effects, the results obtained are still significant. The mechanism test found that the scale of the enterprise has a complete intermediary effect; that is, the social credit environment can increase the scale of external financing of agricultural enterprises by increasing the scale of the enterprise. This article focuses on the impact of informal institutions on corporate debt financing, which is conducive to enriching relevant research on agricultural enterprises and has important practical significance for promoting the development of the agricultural industrial chain as well as “village revitalization.”

Debt structure: a solution to the puzzle of capital structure

PurposeThe purpose of this paper is to investigate the relation between debt structure and future external financing and investment. Furthermore, it aims to analyze the association between debt structure and future financial performance.Design/methodology/approachVolume, maturity, possessing collateral and having priority at the settlement date are the dimensions of debt structure that have been employed in this paper. The sample consists of 1,060 firm-year observations from Tehran Stock Exchange corporations during the period 2009–2018.FindingsThe findings reveal that greater reliance on financial leverage (debt volume) and short-term debt are associated with increases in future debt financing as well as future equity financing. Moreover, these two dimensions of debt structure are positively related to future investment. This paper also shows that the positive impact of financial leverage and short-term debt on future financing and investment can finally lead to a favorable financial performance. Regarding other dimensions of debt structure, the results suggest that although collateralized debt with the priority option at the settlement date enhances future external financing, this type of debt can ultimately lead to a reduction in future investment and financial performance. Finally, the findings indicate that uncollateralized debt exacerbates future financial performance.Research limitations/implicationsFinancial performance can be affected by several factors, including available funds, investment amount, investment efficiency and managerial capability. However, this paper only considers the investment amount and external financing as the channels through which debt structure improves future financial performance. This study has the potential to contribute to one of the most important issues in finance and business fields, despite its probable trivial drawbacks.Practical implicationsFinancing strategies as one of the most controversial topics have been meticulously scrutinized in this paper and practical implications are made to facilitate the process of decision-making regarding the optimal type of debt financing.Originality/valueThis study extends the literature by analyzing the direct link between debt structure and firm performance in firms domiciled in developing markets.

Intellectual capital and sustainability reporting practices in Uganda

PurposeThe objective of the study is to investigate the association between intellectual capital (IC) and sustainability reporting practices in Uganda. The study further examines how individual IC elements (human, structural and relational capital) affect sustainability reporting practices.Design/methodology/approachThis study employs a questionnaire to collect data. Data are analyzed using multiple regression analysis.FindingsResults indicate that IC is significantly associated with sustainability reporting practices. The study also found that human capital and relational capital elements have a positive effect on sustainability reporting practices while structural capital element does not have a significant effect.Originality/valueThis study is one of the few studies that examine sustainability reporting by financial services firms in a country where the capital markets are still in their infancy and the major source of external financing are the banks. Its major contribution lies in its focus on how the key IC components explain variations in sustainability reporting practices among financial service firms in Uganda.

Linkage Between Inclusive Digital Finance and High-Tech Enterprise Innovation Performance: Role of Debt and Equity Financing

This study investigates the relationship between digital financial inclusion, external financing, and the innovation performance of high-tech enterprises in China. The choice of corporate financing methods is an important part of organizational behavioral psychology, and different financing models will have a certain effect on organizational performance, especially in the digital economy environment. Therefore, based on resource dependence theory and financing constraint theory, the present study utilizes the panel data collected from the China Stock Market & Accounting Research (CSMAR) database from 2011 to 2020 of 112 companies in the Yangtze River Delta region and the “The Peking University Digital Financial Inclusion Index of China (PKU-DFIIC)” released by the Peking University Digital Finance Research Center and Ant Financial Group. The results show that the Digital Financial Inclusion Index (DFIIC) has a significant positive correlation with the innovation performance of high-tech enterprises. The higher the level of debt financing, the stronger the role of digital financial inclusion in promoting innovation performance. Investigating the DFIIC in terms of coverage breadth and usage depth, we find that usage depth does not significantly encourage innovation performance. The effect of the interaction between coverage breadth and external financing is consistent with the results for the DFIIC. The study suggests that equity financing promotes the usage depth of the DFIIC in state-owned enterprises. In contrast, debt financing promotes the coverage breadth of non-state-owned enterprises. Finally, we propose relevant policy recommendations based on the research results. It includes in-depth popularization of inclusive finance in the daily operations of enterprises at the technical level, refinement of external financing policy incentives for enterprises based on the characteristics of ownership, and strengthening the research of technologies such as big data, artificial intelligence (AI), and cloud computing. The paper presents a range of theoretical and practical implications for practitioners and academics relevant to high-tech enterprises.

How Does Fiscal Policy Affect Bank Credit? Evidence from China

Using a set of Chinese economic data and a structural vector autoregression (SVAR) model, this paper investigates the transmission channels of fiscal policy to bank credit in China. We find that increases in tax revenue can increase bank credit through external financing premium channel, collateral channel, and bank liquidity channel. We also find that increases in government spending can reduce bank credit through bank liquidity channel and increase bank credit through external financing premium channel and collateral channel.

An empirical analysis of the influence of financialization on investment in Russia

This paper tries to estimate the impact of financialization on fixed investment in Russia. The work is carried out by using panel data based on reports of non-financial publicly listed companies for 1999–2019. The study finds that financial expenses aimed at paying interest on external financing and paying dividends — that is, focusing on shareholder value, and hence decreasing the internal funds of companies, reduce real investments. Financial incomes have shown the crowding-out effect for large companies. Financial incomes as additional “free” funds in large companies are not perceived as an opportunity to accumulate fixed assets. Managers prefer to increase ­financial investments instead of real ones. In small and medium-sized companies, financial incomes, however, drive the growth of physical investment. This is because small firms, at a particular stage in their lives, find it more profitable to invest in their own growth. The results from the general sample, without dividing by size, indicate that financialization in Russia clearly reduces real investment.

Corporate Carbon Disclosure, Financing Structure and Total Factor Productivity: Evidence from Chinese Heavy Polluting Listed Corporates

Low-carbon economy has become the current global economic development trend, and Corporate carbon disclosure has attracted more and more attention from scholars and investors. This paper creatively explores the mechanism of corporate carbon disclosure quality on total factor productivity with financing structure as a mediating variable. The content analysis method is used to construct a carbon disclosure evaluation index system that is suitable for Chinese companies. Through the mediating effect model and Sobel test, the internal mechanism of carbon disclosure quality affecting total factor productivity is analyzed, with Chinese heavy polluting listed corporates from 2015 to 2018 as research samples. The empirical results show that, Firstly, the Quality of carbon disclosure has a positive effect on the improvement of total factor productivity. The effect of monetary carbon disclosure quality on the improvement of total factor productivity is higher than that of non-monetary carbon disclosure quality. Secondly, the financing structure has a mediating effect on the quality of carbon disclosure and total factor productivity, and the mediating effect of internal financing capabilities is better than those of external financing costs. Finally, external financing costs and internal financing capabilities have mediating effects in both heterogeneous carbon disclosure quality and total factor productivity. The mediating effect of internal financing capabilities is significantly higher than the mediating effect of external financing costs. Meanwhile, the effect of monetary carbon disclosure quality on total factor productivity indirectly through internal financing capabilities is higher than that of non-monetary carbon disclosure quality.