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• We employ a cutting-edge estimation method to address heterogenous treatment effects arising from differential treatment timing in order to examine the effect of takeover laws on corporate financing. • Takeover laws reduce corporate equity financing, whereas they do not affect corporate debt financing. • Takeover laws' negative effect on equity financing is more pronounced for firms with higher financial constraints and for firms in countries with strong investor protections. Using a cutting-edge estimation method to address heterogenous treatment effects arising from differential treatment timing, we examine the effect of international takeover laws on corporate financing. We find that firms reduce their equity financing in response to takeover laws. Further analyses indicate that takeover laws' negative effect on equity financing is more pronounced for firms with higher financial constraints and for firms in countries with strong investor protections. [ABSTRACT FROM AUTHOR]

Many retailers are small and medium enterprises (SMEs) with limited access to capital to finance their operations. Here, we consider a supply chain consisting of a capital-constrained retailer and a manufacturer and examine the effect of equity and debt financing schemes on their operational decisions. Using a game theoretical approach, for the risk-neutral scenario, we take expected profit maximization as the participants' objective to examine the equilibria of their operational and financing decisions. We also examine the condition under which the manufacturer and retailer adopt equity or debt financing to earn additional profits. We find that when the retailer is highly capital-constrained, she benefits from either financing scheme, but the manufacturer prefers to offer equity financing over debt financing. Otherwise, if the retailer is less constrained, debt financing is preferable. We also extend our analysis to risk-averse participants using the conditional value-at-risk (CVaR) criterion. We show that the decreasing monotone property of the order quantity in the wholesale price, known in the risk-neutral setting, no longer holds. Indeed, the relationship depends on the participants' risk aversion level; if the manufacturer is highly risk-averse, it chooses to provide equity financing to enhance its CVaR performance; otherwise, it offers debt financing. Our findings provide implications for decision-makers in choosing the optimal financing options and making the associated operations and financing decisions when considering risk attitudes. • We examine conditions for participants to adopt equity (EF) or debt financing (DF). • The manufacturer prefers EF if the retailer is highly capital-constrained. • Risk aversion level affects participants' operational and financial decisions. • The highly risk-averse manufacturer prefers EF to enhance its CVaR performance. • We provide implications for optimizing their financing and operations decisions. [ABSTRACT FROM AUTHOR]

Through a study of the behaviour of already debt-ridden local governments in response to the Made in China 2025 policy, this paper explores whether local governments prioritized State interests over local interests, when their financial involvement was required. Deploying a panel data analysis for more than 280 prefectural-level cities, this paper finds that, despite having been subject to an "Administrative Subcontract" arrangement under which the Central Government appoints top local officials, local economic/debt interests were prioritized over national policy implementation under fiscal decentralization. Instead of promoting infrastructure development, the Made in China 2025 policy provided an opportunity for local governments to raise capital via Local Government Financing Vehicles (LGFV) primarily for debt refinancing, despite the State's numerous attempts to control the growth of local government/LGFV debt. Some policy implications concerning i) the effectiveness of national policy implementation on local levels under "Administrative Subcontract" and ii) the debt situations of prefectural-level Chinese cities and their effects on China's economy in general are then discussed. • National policy required local government investment under fiscal decentralization. • Local leadership faced with dilemma between career prospects and mounting debt. • Prefectural-level cities prioritized local interests over State interests. • The Made in China 2025 policy triggered further accumulation of local debt. [ABSTRACT FROM AUTHOR]

Disasters can inflict severe devastation on communities and territories at all levels of authority. With regard to the connection between floods and cyclones and their financial impact, this study seeks to refocus national and subnational research efforts. The consequences of floods and cyclones on India's budget and economy at the subnational government level are examined in this study. The study creates a physical disaster intensity index to evaluate the impact on fiscal sustainability after disasters, as the estimated damages statistics are unreliable. Between 1995 and 2018, the study integrated disaster intensity index and budgetary data to produce a panel dataset of 25 Indian states. Using Panel Vector Autoregression, the study discovers that a state's overall government expenditure goes up, and its budget deficit worsens when floods and cyclones strike. By further breaking up the fiscal variables, we could pinpoint specific areas where disasters have exerted their influence, especially in terms of decreased own tax revenue, increased social sector expenditure and capital outlay, increased outstanding liability, increased primary deficit, and reduced transfers from the centre over time. It observed that after disasters, states more prone to disasters have higher volatility in revenue generation and expenditure patterns, and a sharp increase in outstanding liabilities. This suggests a greater reliance on borrowing for disaster recovery. Less-prone states, however, show higher utilization rates of disaster relief funds, indicating better resource allocation for disaster response and recovery. The study highlights that state governments rely highly on ex-post Disaster Risk Financing instruments, especially debt financing, as national relief and response funds couldn't manage the increased spending and budget deficit from disasters. This study thus helps policymakers and governments look for more proactive disaster financing instruments and make changes in India's fiscal framework to integrate climate change considerations. • Construction of Disaster Intensity Index (DII) for the Indian States: The physical intensity of disasters (Floods and Cyclones) in India was analysed using accurate scientific data regarding the number and intensity of flood and cyclone events. • Fiscal Impact of DII for core and sub-components of fiscal variables: The core and sub-components of fiscal variables were analysed. Sub-component analysis helps to validate the core component level results. It observed that existing disaster risk financing mechanisms cannot absorb the financial loss associated with the intensity of the disasters. • Comparison of Fiscal impacts of DII on more prone and less prone states: states more prone to disasters have higher volatility in revenue generation and expenditure patterns and a sharp increase in outstanding liabilities following disasters. This suggests a greater reliance on borrowing for disaster recovery. Less-prone states, however, show higher utilization rates of disaster relief funds, indicating efficient resource allocation for disaster response and recovery. [ABSTRACT FROM AUTHOR]

This research delves into sustainability within the road freight transport sector, focusing on how financing policies interact with the capital structures of haulage companies. Employing an agent-based model inspired by Sweden's freight sector, we simulate strategies for fleet replacement while considering financial health and balance sheets. Hauliers are portrayed as agents with financial attributes sourced from real-world financial statements. Their financing decisions are informed by pecking order theory. Through a series of scenario tests, we simulate the impacts of policy interventions on hauliers' transition trajectories. Our findings highlight the challenges associated with integrating electric trucks, attributed to limited financing avenues. Both internal and equity financing are found to be inadequate, while debt financing raises concerns about credit risks. These findings remain robust even when incentives like subsidies and reduced interest rates on loans are introduced. The study underscores the intricate interplay between financial factors and sustainable heavy-duty road transport. [ABSTRACT FROM AUTHOR]

• The scale of debt financing of enterprises in the next year will significantly decrease after the administrative punishment of listed enterprises. • The more severe the administrative punishment imposed on a listed enterprise, the more significantly the debt financing scale decreases in the next year. • State-owned background will weaken the impact of administrative penalties on the effectiveness of debt financing of listed firms. This paper selects China's A-share listed companies as a sample from 2016-–2022 and systematically explores the far-reaching impact of listed companies' administrative penalties on corporate debt financing. The results of the study show that administrative penalties have a significant negative impact on the scale of debt financing of enterprises in the following year, and this impact is relatively small in state-owned enterprises. In addition, the degree of market development of the region keeps shrinking the scale of corporate debt financing after administrative punishment. [ABSTRACT FROM AUTHOR]

• We examine the empirical nexus between green innovation corporate financing. • Green innovation has a positive effect on corporate debt financing. • Green innovation has a positive effect on corporate debt financing. • RBV theory and stakeholder theory were found valid in current analysis. • Green innovation has a dual benefit in the shape of environmental sustainability and access to corporate financing. Enterprises are increasingly adopting green innovation strategies to reduce their environmental footprint and enhance their competitive positioning. However, how this shift towards sustainability influences corporate financing is less known in the literature. Therefore, this study aims to investigate the impact of green innovation on corporate financing in BRICS countries. Using data from 2010 to 2022 and system GMM for analysis, it finds that green innovation positively influences corporate financing. This highlights the growing importance of sustainable practices in shaping financial decisions. The study adds to the literature on the link between environmental sustainability and corporate finance, emphasizing sustainability's role in corporate financial strategies. [ABSTRACT FROM AUTHOR]

This study examines the impact of firms' participation in an emissions trading scheme (ETS) on their debt financing. Using a unique quasi-natural experimental setting in China, we find that the cost of debt increases and firm access to debt decreases when firms participate in an ETS, which indicates that lenders interpret firms' participation in an ETS as a potential risk compared to nonparticipation. Further analyses show that the negative effect of participation in an ETS on firm debt financing is more significant for ETS participants that are less able to pass costs on, that operate in regions with less financial marketization, and that are less innovative. For firms that are covered by the national ETS, the restricted access to debt is alleviated for those with experience in a pilot ETS. [ABSTRACT FROM AUTHOR]

Following the thriving literature on the impacts of ESG performance on corporate financing, this paper investigates corporate ESG performance and debt-financing using a sample of Chinese listed firms. We pay special attention to the influence of rating disagreements across different agencies. While the positive role of ESG performance on the cost and amount of corporate debt financing is revealed, clear heterogeneity is found. More importantly, we uncover the role of rating disagreement, and find that only firms with agreed high ESG rating can benefit through lost cost and larger amount debt-financing. The results confirm the needs for firms to improve information disclosure and pay special attention to ESG performance. Moreover, improving ESG rating quality and establishing a consistent and effective rating system deserve regulators' attention. [Display omitted] • The positive role of ESG performance on corporate debt financing is revealed. • The influence of ESG rating disagreement is discussed. • Only firms with agreed high ESG rating can benefit in debt-financing. [ABSTRACT FROM AUTHOR]

• This paper uses 289 local debt risks from 2009 to 2016 as samples to empirically test the impact of inspection supervision on local debt risks for the first time. Compared with previous literature, the main contributions of this paper are as follows: Firstly, this paper studies the impact of inspection supervision on local government debt risk for the first time. The current research on inspection system is mainly based on normative theory, and there is no empirical test on the impact of inspection on local debt risk. This paper takes inspection supervision as a quasi-natural experiment, studies its importance in reducing local debt risk, and expands the research horizon of inspection supervision. Secondly, the research on local debt risk has been enriched and refined. In the early literature, due to the problem of data availability, provincial panel data was mainly used to study local debt risk. Compared with provincial panel data, which is more affected by political factors, municipal performance assessment pays more attention to economic performance assessment, so the use of municipal panel research is more suitable for local debt risk. This paper extends the study from the provincial panel to the prefecture-level city panel, providing further micro evidence for the study of local debt risk. Thirdly, this paper further studies and finds that in the samples with poor regional financial ecological environment and large soft budget constraints, inspection supervision has a more significant effect on reducing local government debt risks, indicating that inspection supervision is an important governance mechanism arrangement to make up for weak market governance and low government governance level, which also provides policy implications for inspection supervision. It is conducive to the modernization of national governance capacity and system. This paper employs a difference-in-differences (DID) model to analyze data from 289 Chinese prefecture-level cities from 2009 to 2016 and comes to the following conclusion: patrol supervision can reduce the risk of local government debt. After conducting a series of robustness tests, including propensity score matching (PSM) tests, transformation study design, and replacement of explained variables, this conclusion remains robust. Further investigation reveals that the effectiveness of inspection and supervision in reducing local government debt risk is more pronounced in regions with a poorer financial ecological environment and a greater soft budget constraint, indicating a substitute function. By examining the impact of patrol supervision on local government debt risk, this paper provides valuable insights for preventing and resolving major risks and offers up recommendations for future efforts in this domain. [ABSTRACT FROM AUTHOR]

• We explore the impact of high-quality interactions on IIPs on the cost of debt. • We find the moderating effects of information reliance, external monitoring and characteristics of board secretary. • Firms with high-quality interactions are also associated with longer-term loans and favorable bond covenants. With the data from online interactive investor platforms in China, we find that high-quality interactions between investors and listed companies lead to a reduction in the cost of debt. This effect is more pronounced in firms relying heavily on information, having weaker external monitoring, and boasting a more sophisticated board secretary. Furthermore, our findings indicate that high-quality interactions are also associated with longer-term loans and favorable bond covenants. Our findings have significant implications for improving the information environment of capital markets by highlighting the value of fostering transparent and effective communication channels between investors and firms. [ABSTRACT FROM AUTHOR]

• Firms reduce capital spending in response to high state-level policy uncertainty. • This effect is more pronounced for firms facing low market competition. • Both financially constrained and unconstrained firms exhibit reduced investment. • Firms increasing their lobbying efforts can maintain higher investments. • The mitigating effect may stem from lobbying firms' greater access to debt. Does state-level policy uncertainty (SPU) stifle firm investment? We document fresh evidence of a strong negative association between SPU and firms' capital spending. This finding remains robust after excluding states with overrepresentation, through alternative measures of investment and SPU, as well as during low- and high-SPU periods. Furthermore, this effect is stronger for firms facing low market competition. Interestingly, however, firms intensifying lobbying efforts can maintain higher investments during policy turmoil. Additional analyses propose that the mitigating role of lobbying may be explained by the lobbying firms' greater access to debt financing. Using matched samples based on propensity score matching (PSM) estimation ensures the empirical resilience of these findings. [ABSTRACT FROM AUTHOR]

• Uses the introduction of the "Green Credit Guidelines" policy to study green credit policy, property rights and debt financing for the first time. • We find that debt financing among heavily polluting Chinese enterprises dropped significantly following the introduction of the green credit policy. • We believe the green credit policy system plays a guiding role in the allocation of credit resources in China. Our paper uses the promulgation of the "Green Credit Guidelines" policy in China as a quasi-natural experiment. Based on a difference-in-differences (DID) model, the results show that the debt financing capacity of heavily polluting enterprises has dropped significantly, and the negative net effect of debt financing is more pronounced in state-owned enterprises and enterprises in regions with weak financial ecosystems. The research results show that the green credit policy system plays a guiding role in the allocation of credit resources. [ABSTRACT FROM AUTHOR]

• The loss of political connections of non-SOEs promotes the financialization of enterprises more significantly. • The loss of political connections leads enterprises to a stronger tendency of financialization. • Non-SOEs with high debt financing capacity keep their financial investment. • Financial assets are an essential source of raising funds for the enterprise. This paper examines firms' financial asset allocation motives from the perspective of loss of political connections. Based on listed companies in China's stock market, we show that the loss of political connections leads enterprises to hold more financial assets based on preventive saving motives, leading to a stronger tendency of financialization, and this effect is significant only among non-state enterprises but not among state enterprises. Meanwhile, non-SOEs with low debt financing levels tend to hold more financial assets, while non-SOEs with high debt financing capacity keep their financial investment levels relatively the same. [ABSTRACT FROM AUTHOR]

This study examines the impact of policy uncertainty on the substitution between external financing and internal funds using an international data set for 22 countries during the period 1998–2019. I find that the sensitivity of external financing (measured by the sum of equity and debt issuances) to internal funds is less negative during periods of high policy uncertainty. This implies that policy uncertainty dampens the substitution effect between external financing and internal funds. My results also show that both equity and debt issuances are less negatively associated with internal funds in times of heightened policy uncertainty. [Display omitted] • Policy uncertainty dampens the substitution between external and internal financing. • Policy uncertainty decreases the substitution between equity financing and cash flows. • Policy uncertainty reduces the substitution between debt financing and cash flows. [ABSTRACT FROM AUTHOR]

Although there have been recent developments in respect of the diversification of capital markets in GCC countries, the motivations of the firms issuing Sukuk or conventional bonds have remained largely unexplored. Using a sample consisting of 88 Sukuk and 287 conventional bonds issued in GCC countries during the period from 2000 to 2015, this paper analyses the factors affecting an issuer's choice of employing an Islamic bond (Sukuk) structure as compared to conventional bonds instruments. The results suggest that there are some significant differences between Islamic and conventional bond issuer's choice determinants; these can be attributed to the Sukuk’s specific characteristics and to the issuer’s characteristics. Within the GCC region, the firms, which issue Sukuk, have more specific characteristics. By way of contrast, the determinants among those firms, which issue conventional bonds, have fewer specific characteristics. In addition, our findings provide evidence that in respect of the issuance of larger debt and long tenor, firms prefer to issue Sukuk rather than conventional bonds. However, with regard to the quality of the credit rating, our empirical proxies report a positive correlation with the issuance of conventional bonds and a negative correlation with the issuance of Sukuk. [ABSTRACT FROM AUTHOR]

This paper examines the monetary transmission mechanism through Islamic banks’ debt financing channel. Its purpose is to test if this channel effectively works and to verify whether the reaction of Islamic banks to interest rates depends on their specific characteristics. The research main focus is on the possible mitigating effect that profit sharing investment accounts (PSIA) could exert on the debt financing channel, since that this source of funding, specific to Islamic banks, is expected to be more stable than deposit accounts for conventional banks. The study uses a quite representative sample composed of 50 Islamic banks and the estimation of a dynamic panel model observed between 2005 and 2014 using the system GMM estimator. Empirical findings confirm the presence of a debt financing channel of monetary policy since that interest rates variation affects Islamic bank financing. PSIA growth, capitalization, assets liquidity and size are among major determinants of Islamic banks’ debt assets supply. Besides, using several robustness tests, we show that, in addition to asset liquidity and bank size, growth rate of PSIA significantly mitigate the negative effect of interest rates on debt financing growth, which highlights the importance of this specific category of deposits in monetary transmission especially for countries where Islamic and conventional banking systems coexist. [ABSTRACT FROM AUTHOR]

• An increase in litigation risk can reduce firm performance. • Companies with higher internal control have a minor role in litigation risk in reducing corporate performance. • Higher litigation risk can negatively affect corporate performance by reducing the size of interest-bearing debt. • Litigation risk is transmitted negatively to corporate performance through corporate debt financing ability. With the continuous improvement of China's legal system, corporate litigation risk has become a hot topic of academic research. This paper selects data from 2011 to 2020 to explore the impact of litigation risk on corporate performance. It further investigates the impact of litigation risk on corporate performance through the level of debt financing. It is found that: the higher the corporate litigation risk, the lower the level of corporate performance; the higher the level of internal controlling and analyst following, the lower the effect of litigation risk on corporate performance; the mediating effect shows that litigation risk is transmitted negatively to corporate performance through corporate debt financing ability. [ABSTRACT FROM AUTHOR]

• We examine impacts of green finance development on the debt financing capacity in green enterprises. • The increase of green financial development enhances the debt financing ability of green enterprises. • Suppressing the debt financing ability and promoting the transformation of heavy polluting enterprises are two channels. • Our findings provide implication for guiding industrial green transformation. The study examines the impact of the level of green finance development on the debt financing capacity of heavy polluters and green enterprises in China. Using the entropy value method to calculate the level of green finance development at the region level from 2007 to 2020, we find that the increase in the level of green financial development helps to enhance the debt financing ability of green enterprises, while suppressing the debt financing ability of heavy polluting enterprises, and promotes the transformation of heavy polluting enterprises from the perspective of enterprise debt financing. [ABSTRACT FROM AUTHOR]

This paper examines the effects of public and bank debt financing on firm performance in emerging markets. Using data on 700 publicly traded firms from the BRIC countries, it is documented that bank debt may have a positive effect on firm profitability. While overall market assessment of bank debt financing is negative, it is found that fully bank-financed firms lose less of their market value. Main findings remain unchanged after addressing potential endogeneity issues by introducing a novel instrumental variable. Overall, the results suggest that higher levels of bank financing may have positive effects on firm profitability and market valuation. [ABSTRACT FROM AUTHOR]

Hongqiao is one of China's largest ever urban development projects, and within Shanghai second only to Pudong. It is designed to kick-start growth in the western part of China's economic capital, just as Pudong did in the east. The project comprises a transport hub and a new central business district and involves the participation of an array of organizations, including government at various levels, specially created bodies, property developers and banks. The central argument of this paper is that these organizations formed what can best be conceived of as a government-led land-based urban growth coalition and that this coalition became the driving force behind the Hongqiao project. It further argues that, rather than being one monolithic coalition, this was a shifting constellation of corporate actors, forming informal subcoalitions with different but interlocking roles and functions. The paper concludes by arguing that land-based urban growth coalitions rely on participants benefitting from rising land and property values once land has been developed, but for this debt financing is required, and this comes with its own substantial problems. The concept of land-based urban growth coalition can be useful in helping to interpret urban change in China so long as the coalition is examined in some detail. [ABSTRACT FROM AUTHOR]

This paper considers a capital-constrained closed-loop supply chain (CLSC) composed of one original equipment manufacturer (OEM) and a single remanufacturer (RM), and investigates this CLSC's optimal production and financing strategy under fairness concerns. CLSC decision-making models under four cases, namely, the OEM has adequate funds, the OEM's funds are limited without financing, the OEM has limited funds with debt financing, and the OEM's funds are limited with advance payment financing, are formulated. The equilibrium solutions in different cases are obtained through the backward induction method, the impact of fairness concern behavior on the equilibrium solutions are analyzed, and the critical conditions for OEM to adopt optimal financing strategies are obtained. The results show that: compared with the advance payment financing, the yield of new product under the debt financing situation is higher, but the yield of remanufacturing products is lower, and the sales prices of both products are higher; furthermore, the fairness concern have a smaller marginal impact on the quantities of new products, but have a larger marginal impact on the quantities of remanufactured products. Moreover, only if the OEM's initial capital is constrained and the advance payment financing ratio is below a certain threshold, the OEM will adopt advance payment financing, and when the initial capital is exceedingly scarce and the advance payment financing rate is relatively large, the manufacturer tends to adopt debt financing; with financing, the environmental impact will increase as the fairness concern grows up, while with debt financing it is even more eco-friendlier. [ABSTRACT FROM AUTHOR]

Green credit policy (GCP) is an important measure to realize green transformation of economy and society. Taking the panel data of 1359 Chinese A-share listed companies from 2008 to 2019 as samples, this paper analyzes the effect and mechanism of green credit policies on corporate financing costs by using difference in difference (DID) method. After the implementation of GCP, the financing cost of enterprises with high energy consumption and high pollution increases compared with those with energy conservation and environmental protection. In addition, GCP not only affects the financing cost of corporate debt by changing the financing scale and commercial credit, but also affects the financing cost of corporate equity by changing financial status and information disclosure degree. However, compared with enterprises in medium and low carbon emission regions, GCP has a more significant impact on the financing cost of enterprises in high carbon emission regions. [ABSTRACT FROM AUTHOR]

In this article, we examine whether stakeholder engagement impacts firms' ability to raise debt during the COVID-19 pandemic. Using firm-level data from 51 countries, we find that firms with greater stakeholder engagement obtain higher debt financing during the COVID-19 pandemic. This effect is more pronounced for riskier firms, highlighting the importance of maintaining relationships with stakeholders. Moreover, we find that stakeholder engagement facilitates higher debt financing for less asset-intensive firms and firms in emerging economies. Our empirical analysis reinforces the role of firms' stakeholder engagement in mitigating the adverse impact of economic shocks. • We examine whether stakeholder engagement impacts firms' ability to raise debt. • We find that firms with greater stakeholder engagement obtain higher debt financing. • The effect is pronounced for riskier firms, reinforcing the role of relationships. • Stakeholder engagement enables resiliency to firms during the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

• Identifying the environmental regulatory pressure in Guangdong Province. • Exploring the effect of environmental regulatory pressure on corporate debt finance. • The effect is heterogenous by corporate ownership, size and industry attributes. • Mechanism is explored from the environmental awareness of enterprise and debt funder. This study explores whether and how environmental regulatory pressure affects enterprise debt financing. We find that environmental regulatory pressure significantly reduces the debt financing scale of enterprises in Guangdong Province, China, listed from 2010 to 2018. Our heterogeneous analysis of enterprise size, ownership type, and industry attributes shows that the negative relationship between environmental regulatory pressure and debt financing is strong in small-scale, privately owned, and high pollution-intensity enterprises. We also explore the mechanism from the perspective of the environmental awareness of enterprises and debt funders and observe that both are improved following strong environmental regulatory pressure. We confirm that environmental regulatory pressure has a negative effect on the debt financing of listed enterprises. Our study provides implications on how to promote the rationalization and perfection of environmental policies effectively. [ABSTRACT FROM AUTHOR]

This paper examines the association between firm valuation and the sources of debt financing. In particular, using a sample of 353 firms, we test whether the decision to issue bonds affects the firm's stock market performance in the emerging Russian markets. Our results indicate that public debt financing may have a negative effect on the firm's market valuation. After controlling for the differences in firm-specific characteristics and addressing potential endogeneity issues, we document that the firms which rely on public debt underperform relative to firms with other sources of debt financing in terms of stock market valuation. [ABSTRACT FROM AUTHOR]

Abstract: This study develops and demonstrates a wastewater system dynamics model as a decision support tool that can assist utility managers to ensure financial sustainability while maintaining customer expectations for service performance. To achieve implementation of the model, a demonstration case study is developed using data from a medium-sized city in Ontario, Canada, having a large backlog of deteriorated wastewater pipes. Specific outcomes for this study include: (1) presentation of a methodology to parameterize the demonstration model using available utility data; (2) demonstration of the significance of interrelationships between system variables on a system’s performance indicators such as total life-cycle costs, Internal Condition Grade of pipes, sewage fees; and (3) exploration of alternative financially sustainable management strategies for operating a wastewater network that involve the trade-offs between maintaining a strict ‘zero fund balance’ with no borrowing, versus issuing debt to accelerate a capital works program. Results indicate that a financing strategy involving borrowing can minimize the total life-cycle cost while maximizing the service performance level of the network. [Copyright &y& Elsevier]

Abstract: The objective of this research is to identify Small Medium-sized Enterprise (SME) Characteristics in Batam Free Trade Zone that have the ability to acquire debt. Sampling method used in this research is purposive sampling method. 79 selected samples were taken from SME that located in Batam during 2008-2009. The methods used for analysis were comparison analysis and logistic regression model. The result of this research indicates that firm size, firm growth, firm location, foreign shareholder involvement, type of industry, export activities, and educational background of top manager at SME in Batam have significant correlations to the SME''s ability to acquire a debt. The ability to acquire debt by SME in Batam is positively related to location, export activities and manager education but negatively related to size, growth, foreign shareholder and type of industry. The firm age and development strategy seems to have no significant impact on the SME''s ability to acquire debt. The groups which are SME''s using debt and not using debt can be distinguished by Mean Difference Analysis for independent samples. Based on the analysis, we concluded that firm location, export activities, background educational, foreign shareholder and firm size were the differentiating factors between two groups. [Copyright &y& Elsevier]

• Conducting a lab-in-the-field experiment with top managers from 320 textile and garment SMEs. • Firms led by loss-averse managers are less likely to use debt. • Managers' loss aversion exerts a stronger effect on domestic debt than on foreign debt financing behavior. This study aims to examine whether managers' loss aversion has significant impact on debt financing behavior of SMEs. For this purpose, we carried out a lab-in-the-field experiment with a sample of top managers from 320 textile and garment SMEs in Vietnam. We find that SMEs led by more loss-averse managers are less likely to access domestic debt, and have a significantly lower level of foreign debt. Notably, we observe that loss aversion exerts a stronger effect on domestic debt than on foreign debt financing behavior. [ABSTRACT FROM AUTHOR]

We investigate firms' debt financing choices among bank loans, public bonds and privately placed debt around mergers and acquisitions (M&As). We find that prior to M&As, firms with above-optimal leverage tend to pursue arm's-length debt financing in lieu of bank debt. We find that three-day CARs for highly levered firms and acquirer's long-run performance are negatively associated with non-bank financing. This supports a monitoring avoidance hypothesis for highly levered firms' non-bank debt financing decisions in M&As. As a falsification test, we do not find the same debt financing considerations of acquirer firms during their post-M&A period. [ABSTRACT FROM AUTHOR]

Abstract: By incorporating the factor of controlling shareholders into real options models, the effect of controlling shareholders on the agency costs of debt financing is analyzed synthetically. The result shows that the occurrence of controlling shareholders increases the information asymmetry between creditors and shareholders and induces more early investment. With the increase of cash flow of controlling shareholders, the agency costs of debt financing decreases, which testifies the “incentive effects” of controlling shareholders. With the increase of separation of cash flow rights and control rights, asset substitution problem becomes severe and the agency costs of debt financing increase, which testifies the “entrenchment effects” of controlling shareholders. [Copyright &y& Elsevier]

A vast body of literature shows that environmental management system certification, especially ISO 14001 certification, has the potential to relieve environmental stress and reduce ecological impact. However, opinions vary on the financial effects of ISO 14001. This study aims to increase the understanding of the financial effects of environmental management system certification on firms' performance. We posit that Chinese listed firms in the metallurgical industry with ISO 14001 certification have lower debt financing costs. Using a difference-in-difference approach and propensity score matching, we find evidence to support our hypothesis. In addition, we find that ISO 14001 has different debt financing impacts on firms with different corporate ownership and financing constraints. This study provides one of the first perspectives in the literature of the link between ISO 14001 certification and debt financing, and its results have practical significance, as they encourage high energy-consumption enterprises to gain ISO 14001 certification. Image 10995 • We study whether green environmental management systems lower debt financing costs. • We analyze ISO14001 certification among listed metallurgical firms in China. • ISO14001 certification lowers their debt financing costs. • The impacts differ for firms with different corporate ownership. • The impacts also differ for firms with different financing constraints. [ABSTRACT FROM AUTHOR]