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We examine whether and how auditors incorporate rollover risk in assessing a client's risk. Rollover risk is the risk associated with long-term debt maturing in 1 year, which has to be refinanced or settled shortly. Debt has two counteracting effects on firms' riskiness: increased liquidity risk and increased monitoring. The finance literature suggests that rollover risk is an apparent risk factor because it results in high liquidity risk but only a weak (or limited) monitoring benefit. Consistent with that literature, we show that auditors increase audit fees, exhibit a higher likelihood of issuing a going-concern opinion, and terminate relations with their clients more frequently as rollover risk increases. Our study is the first in the audit research literature to document that auditors factor rollover risk in their pricing, going concern, and client portfolio decisions. [ABSTRACT FROM AUTHOR]

This article is the first to study the relation between financial restatements and restatement firms' demand for trade credit as a source of financing. Using a sample of U.S.-listed firms for the 2000–2016 period, we find that restatement firms tend to use more trade credit in the year following the restatement disclosure year than do non-restatement firms. Moreover, we find evidence that restatement firms use trade credit to substitute for the reduced reliance on short- and long-term loans. Our further analysis reveals that restatement firms can obtain more trade credit when the firms promptly change the CEOs as a signal for firms' attempt to repair damaged organizational legitimacy. Taken together, our findings suggest that restatement firms experiencing difficulties in obtaining conventional borrowings tend to resort to trade credit as an alternative source of financing. [ABSTRACT FROM AUTHOR]

Purpose: The literature has dealt with the relationship between board characteristics (BC) and firm performance (FP) on a large scale. However, it yielded inconsistent results. Thus, this paper aims to examine the indirect relationship between BC and FP through the mediating role of the capital structure (CS). Design/methodology/approach: This study used a sample of 528 non-financial companies listed on Bursa Malaysia from 2015 to 2019. Also, a two-step system generalised method of moments estimation technique was applied. Findings: The results show that board diversity and the frequency of board meetings positively affect financial performance, and it is negatively influenced by board turnover, size and independence. Also, the results indicate a positive relationship between the independence of the board and all CS variables. Importantly, the findings support the policy-setting role of the board of directors where CS (measured by total debt and short-term debt) suppresses some governance mechanisms' detrimental effect on FP. Hence, the board of directors, apart from the monitoring function, introduce various policies (financial and non-financial) that enhance the overall performance of companies. Originality/value: These results are consistent with the agency's perspective that management practices in selecting the optimal capital reduce agency costs and improve performance. The findings contribute to developing a broader theoretical framework that accounts for the policy-setting role of the board of directors. The current study model of corporate governance offers insight for policymakers into the role of corporate governance other than monitoring functions in organisations and how CS should be taken into consideration with corporate governance and FP association. [ABSTRACT FROM AUTHOR]

Under the background of the misplacement of time and space in the trial judicial reform in China, this paper constructs a difference-in-difference model with multiple time periods to systematically investigate the influence of judicial reform on the short-term debt for long-term use of Chinese listed companies and its economic consequences. The research results show that, compared with the companies not affected by the judicial reform pilot, the short debt long ratio of the companies affected by the judicial reform pilot increased by 8.76% on average, and this phenomenon is more obvious in non-state-owned enterprises, asset-light enterprises, small enterprises and enterprises with unified leadership. In addition, it is found that the judicial reform and firms' short-term debt for long-term use increase the risk of corporate bankruptcy. The results help to clarify the mystery of debt maturity structure in China, and provide new ideas and evidence for alleviating the long-term use of corporate short bonds, improving the mismatch of investment and financing maturity and preventing systemic financial risks. [ABSTRACT FROM AUTHOR]

China's global infrastructure financing flagship, the Belt and Road Initiative (BRI) encompasses countries hosting over 60% of the global population and one-third of worldwide GDP. It is based mainly on long-term loans that will mature decades into the future, and timely repayments are only possible if they remain commercially viable. But despite its vast global scope, little is known about the climate risks that could imperil the operations of BRI projects over the next few decades, and, consequently, threaten their long-term sustainability. We narrow this gap by estimating the impacts of future climate change on 217 BRI projects across 70 countries and 9 sectors in two dimensions. First, the effects of increased heat stress on human physical work capacity are calculated using the wet bulb globe temperature and an assessment of the workload for each selected BRI project. Second, the potential structural damages from more frequent flooding incidents are measured by return period (RP), where a shorter RP signals heightened risk. Both have direct impacts on human productivity and infrastructural integrity, which are essential to maintaining the operational viability and financial stability of BRI projects. We compared projected changes on both measures for the mid- and late-twentieth centuries (2041–2060 and 2081–2100) to the historical baseline (1981–2010). We found that BRI projects face escalating vulnerability to climatic risks on both counts. The results underscore a broad variance across different future carbon emission scenarios measured under the Shared Socioeconomic Pathways (including SSP1-2.6, SSP2-4.5, SSP3-7.0, and SSP5-8.5). BRI's aggregated climatic risks are substantially elevated under a high carbon emission scenario compared to a low emission scenario. By the end of the twentieth century, labor workability under SSP3-7.0 (31%) could potentially decrease three times more compared to SSP1-2.6 (10%). Under an intermediate-emission scenario (SSP2-4.5), floods with a historical return period of 10 years could have a return period of 5 years in the future. Significantly hampering the utilization and economic return generation potential of infrastructure projects. In addition, regional geography contributes to risk heterogeneity, with 100-year floods occurring every 15 years in South Asia and every 24 years in Sub-Saharan Africa. Such climate risk implications, potentially overlooked by development financiers, represent significant risks to the sustenance of the BRI, estimated to be worth $1 trillion. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the effect of ESG controversies and their moderating role in ESG performance and the cost of equity and overall, short-term and long-term debt capital relationship in European listed companies. Design/methodology/approach: The study employs two-way fixed effects panel linear regression models on the balanced longitudinal dataset of 231 European non-financial companies listed in the MSCI Europe Index in 2017–2022. To check the robustness, the study utilises the fixed effects logistic regression models with heteroskedasticity-consistent standard errors. Findings: The study reveals the significant effect of ESG performance (negative) and ESG controversies (negative) on the cost of debt capital and the substantial moderating effect of ESG controversies (positive). Additionally, it provides empirical evidence of the crossover moderating effect of ESG controversies in ESG performance and cost of equity relationship. Research limitations/implications: The findings contribute to corporate practice and empirically support legitimacy and stakeholder theories. Practical implications: Companies can utilise the results to proactively enhance their internal policies and behaviour to align with ESG practices and avoid ESG controversies, which will translate into reduced equity capital costs for shareholders and a lower cost of debt capital charged by creditors. Originality/value: To the best of the authors' knowledge, this is the first study to comprehensively investigate the influence of ESG controversies and their moderating effect in the context of the equity and debt capital cost for European listed companies. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to explore the impact of capital structure (CS), including total debts, short-term debt, long-term debt and total shareholder equity, on environmental, social and governance (ESG) performance in the context of Jordan. Design/methodology/approach: To achieve the study's objectives, the authors used the content analysis approach and the longitudinal data generated from the annual reports of 51 industrial companies listed on the Amman Stock Exchange for the period 2012–2020. Findings: The findings show that debt financing enhances ESG performance in all dimensions, while financing by equity did not affect ESG. Consequently, Jordanian companies' managers are trying to reduce agency costs by investing in ESG activities. In addition, companies are focusing on debt financing instead of equity to achieve their financial as well as nonfinancial goals. This is because the opportunism of new shareholders will likely lead to a focus on maximizing their value at the expense of the broader group of stakeholders, and this will adversely affect companies' ESG performance. Therefore, debt financing limits shareholder control. Originality/value: To the best of the authors' knowledge, this is the first examination of the impact of CS financing choices on ESG performance. Thus, this study has important implications for the decisions of executives, policymakers, shareholders and lenders, as it enables them to better understand the linkage between CS and ESG. [ABSTRACT FROM AUTHOR]

This study examines the impact of public debt on economic growth and the debt threshold in selected indebted economies from 1990 to 2021. We employ several econometric methods: the cross-sectional autoregressive distributed lag model and the dynamic panel threshold model, which allow for common correlated effects, to analyse the short- and long-term impacts of debt on growth. Additionally, we explore the effects of changes in public debt using the panel CSARDL method. Our findings reveal that the square term of debt is negative and significant, indicating that an increase in public debt is negatively associated with long-term growth. The debt threshold is calculated to be 56% of GDP, beyond which it adversely affects growth. The negative and significant error correction term (ECT) suggests that the model converges to a long-run equilibrium path. Finally, this study recommends that policymakers in highly indebted countries focus more on resolving debt issues and effectively utilising public debts and borrowings in productive ways, as these factors significantly impact the economic growth of the countries under study. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Historia Económica / Journal of Iberian & Latin American Economic History is the property of Cambridge University Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We examine ways to describe the maturity structure of public debts using few parameters. We compile a novel data set of all promised future payments for U.S. and UK government debt from every month since 1869, and more recently for Peru, Poland, Egypt, and Nigeria. We show there is a unique parametric form which does not arbitrarily restrict debt issuance. We use this model to parsimoniously describe the evolution of public debt maturities and to characterize the relationship between maturity and the term structure of interest rates in the United States since 1940. [ABSTRACT FROM AUTHOR]

Background: Consumer goods firms play a significant role in any economy, like other businesses, require a mix of financing methods to amplify their performance. Aim: The study examined enhancement of corporate performance of Nigerian Consumer Goods Firms through debt financing for a period of eleven (11) years from 2011 to 2022. Methods: The data obtained were estimated using descriptive statistics and panel regression model of fixed effect. Results: The study found a positive and significant impacts of long-term debt (β=0.469729, P=0.0311) and firms’ size (β=0.154547, P=0.0251) on the performance of Nigerian consumer goods firms’ but negative and significant impacts of loan quality (β=−0.037431, P=0.0241) and short-term debt (−0.023417, P=0.0124) on their performance. Recommendation: The study recommends financing through Long-term debt for businesses in Nigeria.

The article discusses the impact of the French Revolution on archives and the subsequent establishment of strong archival practices. The revolution resulted in the destruction of millions of volumes of historical records, but it also led to the nationalization of archives and increased accessibility to the public. The Organ Historical Society Library and Archives (OHSLA) focuses on preserving and providing access to materials related to pipe organ design and construction in North America. The OHSLA has implemented an online platform called ArchivesSpace to document and create finding aids for its collections, making them easily accessible to researchers. The OHSLA also collects new materials and has received important collections such as the Reuter Organ Company Collection and the Estey Organ Company Collection. The article emphasizes the importance of digital scans and the OHSLA's efforts to make archival materials accessible through exhibits, a lending library, and an internship program. Researchers can access materials in person or through email and phone inquiries. The OHSLA is committed to providing comprehensive sources and maintaining a strong research and archival footprint. [Extracted from the article]

Copyright of Scientific Journal of King Faisal University, Humanities & Management Sciences is the property of Association of Arab Universities and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The goal of this research is to determine how independent boards and family company controls affect capital structure and dividend policy. The nature of the independent board moderating variable on the impact of family company control on dividend and capital structure policies is also examined in this study. Twenty-six firms that were listed on the Indonesia Stock Exchange (IDX) between 2018 and 2022 are used in this study’s panel data. The findings indicate that although independent boards have a major positive influence on dividend policy and a negative impact on capital structure, family company control has a considerable negative impact on dividend policy. The independent board’s moderating effect can change how negatively the family firm controls the dividend policy. However, the independent variable board has a significant detrimental impact on the capital structure and moderates the impact of family company control. The dividend payout ratio is significantly positively impacted by firm size and growth potential. Long-term debt decreases as independent board representation increases in family-controlled businesses. The conclusions of this study, it only looks at how family control and independent commissioners affect capital structure and dividend policy; it ignores how different industries operate. It is probable that variations in capital structure and dividend policy among industries. The quantity of dividends and long-term debt in the capital structure may therefore be calculated with the addition of industry categorization factors from future research. [ABSTRACT FROM AUTHOR]

The Dutch health system is financed predominantly by commercial bank loans, especially after the market-oriented reform in 2006, when government investment guarantees were abandoned. Commercial capital markets were envisaged to improve efficient capital allocation and management. We analyzed the effects of commercial bank loans on interest rates, investments and allocative efficiency in the Dutch healthcare sector. We aimed to explain variation in interest rates by financial performance of healthcare providers, hypothesizing that the reform reduced interest rates for financially well-performing providers. Using financial data from publicly available annual reports, we explored the effect of financial performance on long-term loan interest rates through pooled linear regressions. Our data showed that financial reserves have steadily increased, although profitability margins have declined since 2011–2013 (depending on the sector). While nominal interest rates have generally declined since 2006, the risk surplus on healthcare loans has steadily increased. Furthermore, we observed no significant relation between the financial performance of healthcare providers and interest rates on capital loans. Maintaining additional financial reserves provided no apparent benefit to capital costs. This suggests that healthcare providers may consider whether financial reserves should be maintained at current levels or can better be used for direct investments. Moreover, healthcare policymakers should evaluate whether the increase in risk surplus combined with an apparent lack of reward for financial scrutiny is a desired outcome of the reform. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of US uncertainty shocks on China's macroeconomy with a focus on the dynamic response of investment. Using a structural vector autoregression (VAR) model, we find that the wait-and-see mechanism of aggregate investment in the face of heightened US uncertainty disappears in China. Robust evidence confirms that the increase in state-owned enterprises' investment in response to heightened uncertainty explains this puzzle, while private-owned enterprises' investment decreases as expected. We apply regime-dependent local projections to link uncertainty shocks with credit regimes to explore whether the impact of US uncertainty shocks on investment in China has varied over time in connection with the states of bank loans. The empirical results support a positive response of state-owned enterprises' investment to increased US uncertainty during the tightening of medium- and long-term bank loans but a negative reaction when short-term bank loans are tightening. Finally, we show that economic policy uncertainty conveying political signals leads to a decline in state-owned enterprises' investment. Overall, this paper provides richer empirical evidence on the investment-uncertainty nexus. [ABSTRACT FROM AUTHOR]

The mass-scale expansion of student loan schemes in Turkey over the last two decades has been accomplished by a governance technique which the article defines as authoritarian debtfarism. By restructuring the Credit and Dormitories Institution (KYK) as subordinated to the executive and insulated from democratic intervention, the authoritarian neoliberal state in Turkey has sought to fulfil its new economic function, i.e. enabling the societal reproduction of the youth by increasing their financial dependency on credit money. The state-led student loan expansion in Turkey emerged in a tuition-free higher education setting without a sophisticated financial infrastructure and in an economic environment marked with perpetual graduate unemployment as well as inflationary pressures on repayment amounts. Based on a detailed interrogation of the official documents and in-depth interviews with defaulters, this article argues that authoritarian debtfarism has imposed a rigid market discipline over the university youth by using non-transparency and arbitrariness as its governance mechanisms. Consequently, future labour of the graduates is put on hold through a long-term debt relation, compelling them to integrate into labour market precariously as a new segment of the relative surplus population. [ABSTRACT FROM AUTHOR]

The purpose of this study is to ascertain and examine how inflation influences capital structure and investment choices in the real estate and property industries. This study employs a quantitative research design and uses secondary data from the Indonesia Stock Exchange (IDX) and the websites of up to 17 different companies throughout the course of three years, beginning in 2020 and ending in 2022. Eviews 13 was used to process the research data. The study's findings demonstrated that capital structure, which was proxied by the long-term debt to equity ratio, and investment decisions, which were proxied by return on investment, had no discernible effects on the price book value of the company. In the meanwhile, choices on investments can be moderated by inflation. on capital structure's impact on a company's worth, and the findings of this study also suggest that inflation may act as a moderator of the impact of investment choices on a company's worth. [ABSTRACT FROM AUTHOR]

This study analyzes the time‐varying dependence between U.S. leveraged loan and debt markets within a highly linked financial system using a quantile‐based time‐varying connectedness framework to determine the hedging benefits of leveraged loans for financial investors at various quantiles. Based on daily closing price data from November 28, 2008 to October 3, 2023, the evidence demonstrates considerable (moderate) spillovers across the leveraged loan and debt markets for severe (normal) occurrences, with additional results indicating symmetric interaction. In terms of risk spillover, we also affirm the dominance of short‐term fixed‐income instruments over leveraged loans and long‐term bonds. These findings indicate that no hedging or diversification occurred among the investigated markets. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Economics & Administrative Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The COVID-19 pandemic triggered a sudden drop in companies' sales and turnover, which resulted in serious liquidity and solvency problems. In an effort to cushion these unfavourable effects, a credit guarantee plan was launched in 2020 by the Spanish Government to mitigate the effects of COVID-19 by injecting firms with liquidity. This paper seeks to analyse the impact of this public policy on SMEs' optimal debt levels and to examine whether the allocation of this public funding has been efficiently targeted at those SMEs suffering temporary distress as a result of the pandemic. Based on a sample of 3,305 Spanish SMEs, our results show that the government's interventionist policy swelled excess debt levels – mainly due to the increase in excess long-term debt – and deviated them from the optimum. Moreover, although these public guarantees should mostly have been aimed at SMEs experiencing a temporary decline due to COVID-19, we find that these SMEs were the least likely to receive liquidity injections. [ABSTRACT FROM AUTHOR]

This study examines the evolution of the capital structure of European firms during the global financial crisis and European debt crisis. We compare the experiences of SMEs, listed firms and private firms in different industries and investigate the role of country and institutional factors in affecting capital structure. We find that SMEs, private firms, and non-listed firms experience lower declines in leverage relative to large firms during the global financial crisis and the European debt crisis. During these crises' periods, SMEs experience steeper declines in debt maturity, which suggests reliance on short term debt that carries high roll over risks. This behaviour is protracted for firms in the agriculture industry. Both the global financial crisis and EU debt crisis have asymmetric effects on leverage, long term debt issuance and debt maturity across different industries, and across firms of different sizes. Moreover, in countries with more developed financial systems, stronger frameworks for insolvency, resolving firm insolvency, and strong systems for shareholder suits, and director liability, SMEs experience much lower reduction in leverage and debt maturity. This finding suggests that institutional factors help attenuate adverse capital supply shocks. [ABSTRACT FROM AUTHOR]

Copyright of Pacha: Revista de Estudios Contemporáneos del Sur Global is the property of PACHA REVISTA DE ESTUDIOS CONTEMPORANEOS DEL SUR GLOBAL and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Green financial policies play an important role in acceleration of China's green transformation. Existing associated studies mainly focus on the qualitative analysis and descriptive analysis. However, it still lacks empirical studies. To explore the relationship between green finance policies and the investment and financing terms of enterprises, the effects of green financial policies on investment-financing maturity mismatch of A-share companies on Shanghai Stock Exchange and Shenzhen Stock Exchange from 2009 to 2020 were investigated in this study by a difference-in-difference (DID) model. Results demonstrate that green financial policies significantly alleviate short-term loans used as long-term investment in enterprises. Green financial policies inhibit investment-financing maturity mismatch of enterprises by increasing loan availability, lowering financing cost and increasing proportion of long-term loans of enterprises. Such effect is more obvious in enterprises with higher internal control quality and enterprises with more transparent information. Green financial policies can alleviate short-term loans used as long-term investment in non-state-owned enterprises more obviously than state-owned enterprises. Research results provide some references to alleviate debt risks of enterprises. Enterprises are recommended to seek steady development, fulfil social responsibilities and take green low-carbon social actions extensively. [ABSTRACT FROM AUTHOR]

Capital structure is one of the crucial decisions managers must make that can affect a firm’s shortterm and long-term value maximization prospects. Though extant studies have shown capital structure significantly affects profits, researchers have struggled to find an optimal mix of capital structure ideal for value maximization due to the influence of macro and micro factors. There is therefore the need for thisto be properly studied contextually. Building on the Pecking Order Theory, this study examines the capital structure effects on profitability from a short-term, long-term, and total debt financing perspective on listed Ghanaian firms between 2003 and 2013. An unbalanced panel data of 23 listed manufacturing and service firms that are listed on the Ghanaian Stock Exchange are subjected to robust maximum likelihood heteroskedastic linear estimation models. Three main regressions that are run explain the short-term debt, long-term debt and total debt effect on firm profitability. The results show that short-term debt exhibits a positive effect on return on equity (ROE), whilst the relationship reverses for long-term debt, indicating that short-term financing was beneficial to firms rather than long-term financing. Also, total debt exhibited a negative and nonsignificant effect on return on equity. The author also found that firm liquidity exhibited a more pronounced positive effect on profitability for firms with short-term debt than long-term debt. Financial risk negatively affected the returns of only firms with short-term debt. Market share had a pronounced positive effect on ROE across firms whilst firm age exhibited a less pronounced positive effect on firm profits. Firm size and growth had increasing profit effects but was not significant in the dataset. Financial risk also negatively affected profits, but this was only significant in firms with short-term debt structures. This study finds that managers need to adopt more short-term debt financing rather than long-term financing as the former leads to more profits. There is a need for policymakers to develop long-term debt financing structures to compete in the Ghanaian debt market. It is also recommended that managers exercise due care when supplementing equity capital with debt. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Ciencias Sociales (13159518) is the property of Revista de Ciencias Sociales de la Universidad del Zulia Venezuela and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

I model a stochastic non‐cooperative game between an independent central bank and a treasury and study optimal time‐consistent policy in the context of demand‐driven recessions and an occasionally binding zero lower bound constraint. Departing from coordination leads to contractionary fiscal policy in the liquidity trap. The persistent decline in short‐term government debt improves price stability and welfare albeit at the expense of a deeper recession in the near term. Underlying this policy is the anticipated risk of monetary tightening during the economic recovery in response to fiscally induced inflation. The issuance of long‐term government debt helps to buffer the yield to maturity against interest rate fluctuations, thereby reducing the relevance of central bank independence for macroeconomic outcomes. [ABSTRACT FROM AUTHOR]

The paper aims at an analysis of the capital structure and its determinants in companies listed in Poland compared to companies in other European Union countries. It begins with a presentation of the most influential theories and determinants of capital structure in European companies identified so far. The analyses show that companies in Poland are far less leveraged, especially with long-term debt, than companies from both old and new EU countries. Factors such as profitability, company size and inflation are the most important for the capital structure of all companies under scrutiny, irrespective of country. However, the strength of the relationship with leverage among the analysed groups of companies differs for the non-interest tax shield, operational risk, bid-ask spread, and GDP dynamics. [ABSTRACT FROM AUTHOR]

In a monetary economy of production, Say's law is invalid for several reasons. Based on some refutations, it is possible to state that revenues generated by the production process are structurally lower than the supply price of production, which means that firms create insufficient purchasing power to buy what they produce. Herein, we study the dynamics of such an economy and obtain two main results. First, the long-term debt level of that economy must increase during a growth phase to enable demand to grow at the same pace as supply. Second, because of the repayment of this debt, the gap between supply and net revenues generated by the production process widens along a growth phase. JEL Classification: E12, E2, E30, E42, G21 [ABSTRACT FROM AUTHOR]

Purpose – This study explores the relationship between leverage and earnings management in the context of Palestinian-listed companies, while also investigating whether audit industry specialization influences this relationship. Design/methodology/approach – The data used in this study are extracted from public financial reports of 39 firms listed on Palestine Stock Exchange (PEX), spread across the service, insurance, industry and investment sectors, for the time period 2011–2022. A model is developed to test 4 hypotheses about the relationships between long-term and short-term debts, and earnings management, and then to examine the influence of audit industry specialization on these relationships. Findings – The results depict a significant, negative relationship between long-term debt and earnings management. Whereas the association between short-term debt and earnings management is insignificant. Audit industry specialization is proven to have no influence on the relationships between the independent and the dependent variables. Results are robust for firms that changed their accounting policies and using different audit industry specialization proxies. Originality/value – The association between leverage and earnings management is a significant research topic, given that previous research identifies credit ratings and debt covenant violations as key factors which motivate earnings management. This paper fills a substantial research gap by examining the relationship between the two variables in the context of Palestinian-listed firms, while emphasizing the distinction between long-term and short-term debts. It also highlights key relationships that have been neglected in this particular context, which adds to the body of literature. Furthermore, the research's findings provide a solid information base that is of great interest to accounting and auditing experts and that may be seriously evaluated to support and advance the PEX sector.

This article quantifies a new motive of holding cash through the channel of financing risk. We show that if access to future credit is risky, firms may issue long-term debt now and save funds in cash to secure the current credit capacity for the future. We structurally estimate the model and find that this motive explains approximately 24% to 30% of cash holdings in the data. Counterfactual experiments indicate that the value of holding cash is approximately 8% of shareholder value. [ABSTRACT FROM AUTHOR]

This study investigates the impact of various financial arrangements on the investment behavior of the private firm in PPP (Public-Private Partnership) projects. The results manifest that: first, the private firm will invest in the project earlier under long-term debt financing than under short-term debt financing or all equity financing; second, the investment boundary of the private sector decreasing with the probability of obtaining long-term debt financing under short-term debt financing, while increasing with the probability of obtaining long-term debt financing under long-term debt financing; third, the optimal debt level under short-term debt financing displays a U-shaped relationship with the refinancing risk probability; fourth, under short-term debt financing, the difference in the optimal capital structure between projects with different volatility of cash flow is larger when the refinancing risk probability is lower; and fifth, the private firm may exit the project earlier under short-term debt financing than under long-term debt financing. These results can help us to understand the investment behavior of the private firm under different financial arrangements. [ABSTRACT FROM AUTHOR]

I propose a theoretical model of a debt contract between a sovereign and its international lenders that determines the optimal debt maturity structure and related costs. It is shaped by two financial frictions: limited liability (the country cannot guarantee that it will not dilute its obligations or default on them) and market incompleteness. In equilibrium, debt dilution constrains the amount of long-term debt issuance. I use this framework to evaluate the impact of two policy interventions: the possibility of sovereign debt restructuring with private creditors and international official lending in the event of exclusion from the international capital markets. The possibility of restructuring after default stimulates long-term debt issuance; however, in equilibrium, those tools are unable to loosen the constraint on long-term debt issuance. Consistently with the empirical literature, I find that even when these policy options are available, the country tends to issue mainly short-term debt. [ABSTRACT FROM AUTHOR]

The main source of financing is bank loans for Portuguese small and medium-sized entities (SMEs), which implies several constraints to obtaining additional funds. Relying on the argument of Positive Accounting Theory (PAT) that accounting choices are not neutral and on Agency Theory that information asymmetry prevails between insiders and outsiders, we analyzed the impacts of debt on earnings quality, focusing on its level, its increases, and its term of payment. We estimated econometric regressions using panel data with fixed effects over 2013–2019, using discretionary accruals as an inverse proxy of earnings quality. We found empirical evidence that the relationship between debt and earnings quality tends to vary in sign, as the quality of financial information deteriorates with debt, but as debt becomes high, firms tend to increase the quality of earnings. Furthermore, we found that short-term debt tends to decrease earnings quality more than long-term debt. This article aimed to contribute to the prior literature by collecting evidence that debt levels tend to be an incentive to increase earnings management and fill the gap by analyzing the influence of different debt features. This evidence is useful because earnings management may compromise both stakeholders' confidence and the efficient allocation of capital. [ABSTRACT FROM AUTHOR]

The objective of this article is to investigate the influence of CEO narcissistic personality traits on the indebtedness of Brazilian non-financial companies listed on the B3. Other research on narcissistic traits has focused on their impact on the profitability of organizations. Thus, this study aims to fill the gap in understanding the impact of CEO narcissistic traits on companies' debt decisions and their determinants by including a psychological characteristic. This research is relevant because it helps academics, business professionals and policymakers to identify patterns and trends that could warn of possible financial crises. The impact of this article is related to the evidence on the effects of hiring narcissistic CEOs on indebtedness, since understanding the interaction between the CEO's profile and the company's financial decisions can provide practical guidelines for risk management and informed decision making, thus contributing to the field of business strategy and corporate finance. A sample of 299 non-financial companies was analyzed from 2011 to 2020, using data from the Economática database, annual reports, integrated reports, sustainability reports and management reports. Two proxies were used to measure narcissistic personality traits, based on the CEO's signature and the prominence of his or her photo. Indebtedness was measured by the following indicators: onerous, total, short-term and long-term debt. The results show that the greater the narcissistic traits of the CEOs, the greater the indebtedness of the organizations. This contributes to a deeper understanding of the factors that influence companies' financial decisions, since identifying the factors that lead to risky debt decisions can enable the implementation of preventive measures and more effective risk management strategies. [ABSTRACT FROM AUTHOR]

This study examines the differences in debt maturity choice between Real Estate Investment Trusts (REITs) with At-the-Market (ATM) offerings and those without, as well as the subsequent changes in REIT debt maturity following the adoption of ATM programs. We find that ATM REITs consistently maintain higher levels of long-term debt than non-ATM REITs, even after implementing ATM offerings. It suggests that the capital raised through ATM offerings is not primarily utilized to reduce long-term debt. Additionally, the study highlights that small REITs experience a significant increase in short-term debt when actively employing ATM offerings. This outcome indicates that ATM programs offer smaller REITs the necessary financial flexibility to raise funds and address short-term debt obligations. [ABSTRACT FROM AUTHOR]

Financial covenants influence firm behavior by state-contingently allocating decision rights. I develop a quantitative model with long-term debt where shareholders cannot commit to not dilute existing lenders with new debt issuances. Lenders intervene on covenant violations but cannot commit either to any debt restructuring plan ex ante. Counterfactual experiments suggest that financial covenants significantly reduce default probability and increase firm value. However, the value creation is limited by lenders' limited commitment. A hump-shaped relation between covenant tightness and firm value emerges, reflecting a balance between limited commitment on two sides. This paper was accepted by Gustavo Manso, finance. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2022.4667. [ABSTRACT FROM AUTHOR]

Optimal capital structure is a key tool to take advantage of the trade-off between firm performance and risk. Based on this, we examine how optimal capital structure influences corporate performance and risk exposure. We use a strong-balanced panel of 3,344 firm-year observations from 10 different oecd countries for 2006-2016. Results reveal that firms having short-term debt normally experience high accounting-based performance while lowering market-based performance, firms using long-term and total debt are largely exposedtodecreasedaccounting andmarket-basedperformance. The higher the long-termand total debt, the greater the chances that firms become vulnerable to insolvency risk. Findings are robust across alternative indicators of capital structure, firm performance and risk, alternative model development and the two-step system gmm estimator to control endogeneity issues. This research will be of importance to firm managers and policymakers in designing an appropriate capital structure for maximizing firm performance while minimizing debt-taking risks. [ABSTRACT FROM AUTHOR]

This article conveys the critical elements of the keynote address delivered by the author at the opening session of the Third African Conference on Debt and Development in Dakar, Senegal. It attempts to answer the question of African Debt sustainability through the lenses of dependency and underdevelopment theories based on the Centre-Periphery theory and hypothesis that unless Africa exits the dependency and underdevelopment mode in which it has been trapped since colonialism, it will remain in perpetual debt crises. Thus, delinking from institutions and processes that trap Africa in this mode is inevitable for debt sustainability and long-term broad-based development in Africa. The responsibility for generating countervailing power for transformation lies totally in the hands of Africans as our historical experience to date must suggest. [ABSTRACT FROM AUTHOR]

In order to identify the economic driver of negative investment-cash flow sensitivities (ICFS), we derive testable predictions from extending a theoretical investment model with endogenous financing costs ("revenue effect") and contrast them with the corporate life-cycle hypothesis. We find that firms with (i) lower levels of long-term debt display stronger negative ICFS, and (ii) firms with more risky revenues invest more, which contradicts the predictions of the revenue effect. At the same time firms with strongly negative ICFS are (iii) smaller, (iv) younger and (v) have higher growth opportunities, which is consistent with the life-cycle hypothesis. [ABSTRACT FROM AUTHOR]

Socioemotional wealth (SEW) refers to those family‐centered goals that are likely to have a major influence on the strategic decision‐making process and performance of family firms. Many studies have used indirect indicators related to family involvement in ownership and management to measure SEW; meanwhile, others have developed scales to directly measure the level and importance of SEW in family firms. Limitations of both indirect and direct measures of SEW lead empirical research on SEW to be under threat. In the current study, we use random forests to identify the important indicators related to financial and economic decisions, as well as family‐related measures, for explaining the family firms' SEW and to design a good prediction model using the smallest set of nonredundant indicators. Our results show that the model that exhibits the minimum out‐of‐bag sample (OOB) error rate includes variables that refer to the presence of family members in the firm's management positions, long‐term nonfinancial debt, personnel expenditures, long‐term financial investments, short‐term financial debt, average storage period, and accounts receivables. For prediction, the model with a reasonably low estimated classification error includes only three variables, which refer to the presence of family members in the firm's management positions, long‐term nonfinancial debt, and accounts receivables. [ABSTRACT FROM AUTHOR]

Accounts receivable and payable are one of the most common types of financial instruments of agricultural enterprises. Until recently, such debt was considered a traditional accounting object with established recognition rules, cost measurement and disclosure. However, since the end of 2019, the valuation of such financial instruments has changed due to introducing the present value as a priority for its long-term type. The article aims to reveal the methodology for determining the present value of long-term debt as the most common type of financial instrument. The specifics of the application of the present value for the assessment of long-term debt were disclosed. It was substantiated which types of such debt are subject to the discounting requirement and which are not. The problem points of introducing a new type of assessment, which affect the data of financial statements, were identified. The article contains the necessary data and rules for the most reliable calculation of the present value of long-term receivables and long-term liabilities as financial instruments. The study results show that for the most accurate and objective determination of the present value of long-term receivables and long-term liabilities as financial instruments, the agricultural enterprise needs to record the methodology of cost measurement of such objects in the Regulation of accounting policy. In particular, it is necessary to specify the object (which type of long-term debt is subject to discounting and which is not), the calculation (formula), the variable (discounting rate selection procedure) and the documentary (a form of the primary document) components.