This paper investigates the relationship between public debt and economic growth in the context of a panel kink regression with latent group structures. The proposed model allows us to explore the heterogeneous threshold effects of public debt on economic growth based on unknown group patterns. We propose a least squares estimator and demonstrate the consistency of estimating group structures. The finite sample performance of the proposed estimator is evaluated by simulations. Our findings reveal that the nonlinear relationship between public debt and economic growth is characterized by a heterogeneous threshold level, which varies among different groups, and highlight that the mixed results found in previous studies may stem from the assumption of a homogeneous threshold effect.

Over recent years, the Ghanaian economy has struggled to find its feet on the ground despite rising public debt and unending inflows of foreign aid. Against this backdrop, this study employs the Vector Error Correction Model (VECM) estimation technique on data from 1970 to 2020 to test the usefulness of the debt overhang hypothesis and the dependency theory in the special case of Ghana. The results confirm evidence of the debt overhang hypothesis and the center-periphery wisdom of the dependency theory in Ghana. The findings depict that an increase in external debt stock and total debt service on external debt have both short and long-run growth-limiting effects on the Ghanaian economy. Similarly, foreign aid catalyzes growth only in the short run and later suppresses rather than stimulates economic growth in Ghana over the long run. The study recommends that harnessing domestic resources, maintaining fiscal discipline by cutting down unproductive expenditures, enhancing an effective tax system, and promoting institutional capabilities to counteract corruption and openness to trade are better ways to fast-track growth development in Ghana.

The current health crisis derived from COVID 19 has become a serious threat to humanity. The collateral effects related to economic aspects are affecting companies, workers and, of course, families in general. The problems of financial insolvency are frequently present in debtors who have contracted a debt with their creditor. Therefore, the objective of the study is focused on modeling a debt restructuring proposal, through three hypothetical scenarios in which the debt is reconvened when some documents have expired and others are yet to expire. In each of the scenarios, the mathematical model is designed and subsequently corroborated in an Excel spreadsheet. The predominant variables in the restructuring are the adjustment rates used to update the past due promissory notes and the discount rates of those promissory notes that have not yet expired, capitalizations, transaction costs and, if applicable, whether the debt is in foreign currency. In this case, it is converted to the local currency, then the spot exchange rate is used.

The COVID-19 pandemic, has underscored the critical importance of sustainability across various sectors, particularly within the global economy and corporate responses to pandemic-induced challenges. Companies worldwide have grappled with unprecedented financial and operational hardships, pushing some to the brink of closure. A crucial dimension of sustainability in this context pertains to corporate financing policies. Analyzing how the pandemic has impacted these policies reveals significant insights. Government support has been instrumental in mitigating pandemic-induced disruptions, but often proved insufficient for severely affected companies. Companies, seeking financial resilience, turned to state-guaranteed lines of credit as a lifeline. Additionally, moratoriums on existing credits provided temporary relief, but long-term consequences, particularly regarding corporate indebtedness. As companies adapted financing strategies, corporate indebtedness increased. Coupled with rising interest rates in late 2022, corporate financing costs surged, emphasizing the need for sustainable financial approaches addressing both short-term crises and long-term stability. In conclusion, corporate sustainability during the ongoing COVID-19 pandemic necessitates a comprehensive approach. Governments must provide adequate support, companies should pursue sustainable financing solutions, and a careful consideration of the long-term consequences of financial policy changes is essential. Prioritizing sustainability in the corporate sector prepares businesses for future crises while safeguarding global economic stability.

This paper investigates the dynamic stability of public debt and its solvency condition on the face of crises periods (1980-2021) in a sample of 11-euro area countries. The focus is on the feedback loop between dynamic stability of public debt and interest rates, discounted by the economic growth, in conjunction with budget deficits during tranquil and turbulent periods. Using the GMM panel dynamic model, the results show that dynamic stability was the case before the global financial crisis (GFC), while from GFC to pandemic, dynamic instability prevailed on the evolution of public debt. Moreover, dynamic instability exerted a highly persistent effect on the evolution of debt. Furthermore, panel threshold estimates show that dynamic instability of debt starts to violate the solvency condition when the borrowing cost is above 3.29%, becomes even stronger when it is above 4.39% and exerts even more pressure when the level of debt is greater than 91%. However, the debt sustainability condition reverses course when economic growth is higher than 3.4%. The main policy implication drawn from the results is that low interest rates can create a self-reinforcing loop of high debt, which is an issue for further research.

Oil revenues and external debt might have stimulated economic growth in the oil exporting countries via investment in capital projects. The paper estimated economic growth on oil revenues and external debt after controlling public investment and population growth over the period 1970-2015. Following the confirmation of the order of integration, our analysis is based on autoregressive distributed lag bound testing to cointegration approach. The key findings are that oil revenues and public investment contributes to Nigeria’s economic growth. However, our findings also indicate that external debt and population growth retards growth. The study suggests that minimizing fiscal deficits and unnecessarily foreign loans by creating tax avenues through the development of the non-oil sectors would reduce the dependency syndrome on a single commodity (oil) in Nigeria.

How does fiscal devolution affect the probability of a sovereign debt crisis? Using annual cross-country panel data from 82 advanced and developing countries, the association between the sovereign debt crisis and fiscal decentralization is investigated. We employ an instrumental variable panel probit model to address potential endogeneity. The results reveal that local tax autonomy reduces the probability of a sovereign debt crisis. In contrast, expenditure devolution is found to increase the probability of a sovereign debt crisis. These favorable and unfavorable effects of fiscal devolution are found to be more evident in the case of decentralization to local governments than in the case of decentralization to subnational governments. In terms of relative magnitudes, our discrete choice analysis demonstrates that the undesirable effects of expenditure decentralization are greater than the favorable effects of tax revenue decentralization. Therefore, countries should be cautious about risks associated with fiscal devolution, particularly the contrasting impact of tax revenue and spending decentralization on the likelihood that sovereign debt crises occur.

Based on the data of A-share listed companies in Shanghai and Shenzhen of China from 2011 to 2018 and the digital inclusive finance index of Peking University (2011-2018), this paper empirically tests the impact of digital finance development on corporate social responsibility in various provinces of China and its impact mechanism. The results show that: (1) the development of digital finance helps to promote the fulfillment of corporate social responsibility; (2) the influence mechanism of the development of digital finance to promote the fulfillment of corporate social responsibility lies in that it reduces the cost of debt financing and leads to the improvement of corporate social responsibility.(3) Further research shows that the positive relationship between digital finance and corporate social responsibility is more significant in private enterprises. At the same time, the impact is more significant in areas with poor market environment. The above research shows that the development of digital finance has a significant positive effect, which will improve the level of corporate social responsibility.

A robust bank industry is a major player in the stability of an economy. The operational efficiency and stability of banks are therefore paramount. By way of financial ratios and Z-score, this study analysed UT Bank’s financial performance prior to the 2017 bank sector reforms in Ghana. Annual financials over a ten year period (2007-2016) were used. Debt management practices of UT Bank per the results obtained were quite on the hind side and unimpressive. This was reflected in the poor leverage and risk management variables. UT Bank would have been unable to meet creditors’ claims considering the mean average values of debt-to-assets and debt-to equity ratios of 0.76 and 0.90 respectively. The entire bank sector will benefit if credit management practices of individual banks are refreshed and worked on. The bank industry regulator should tighten its supervisory and monitoring role over banks to help detect early signs of non-performing banks. The study further recommends that statutory lending limits of banks be re-enforced to uphold the threshold of 10 percent for unsecured loans and 25 percentage for secured loans of net owned funds of the bank.

The work proposes a model of funds formation in current and fixed-term (ruble and currency) accounts and transfers of funds between them. The sources of money are loans issued by commercial banks, placement of government domestic debt, the positive balance of foreign trade. The financial parameters and characteristics of the system are estimated using the Kalman filter. The adequacy of the model is confirmed by simulation modeling. It was found that the rate of creation of rubles in current accounts increased from ≈ 8% per annum in 2015-16 ≈ to 12% in 2017-18 and to 29% in 2019-20. The leakage of foreign currency from accounts (in addition to the official outflow of capital) was ≈ 12, 50, 35 billion dollars per annum during the same periods.

This study examines whether government spending efficiency is associated with differential effects of public investment on debt-to-GDP ratio for a panel data consisting of 16 developing countries in Asia-Pacific region over the period 2007-2017. Public investment is central to implementing the UN 2030 Agenda for Sustainable Development — but high debt-to-GDP ratio poses a key risk. The empirical results indicate that public investment efficiency moderates debt-to-GDP ratio whereas public investment in the midst of public sector corruption accentuates debt-to-GDP ratio. The results have important policy implications.

This paper examines the effect of chronotype on the delinquent credit card payments and stock market participation through preference channels. Using an online survey of 455 individuals who have been working for 3 to 8 years in companies in mainland China, the results reveal that morningness is negatively associated with delinquent credit card payments. Morningness also indirectly predicts delinquent credit card payments through time preference, but this relationship only exists when individuals’ monthly income is at low and average level. On the other hand, financial risk preference accounts for the effect of morningness on stock market participation. Consequently, an additional finding is that morningness is positively associated with financial risk preference, which contradicts previous finding in the literature. Finally, based on the empirical evidence, we discuss the plausible mechanisms that may drive these relationships and the implications for theory and practice. The current study contributes to the literature by examining the links between circadian typology and particular financial behaviours of experienced workers.

This study was aimed to investigate the effect of capital structure on firms’ profitability with special emphasis on Ethiopian Large Private Manufacturing Firms using panel data of five consecutive years (2006/07-2010/11G.C). The secondary data sources (audited financial statements) have been collected from the randomly selected thirty three large private manufacturing firms in Ethiopia. Linear regression model has been employed to analyze the relationship between firms’ profitability and capital structure. Specifically, Random-effect Generalized Least Square of panel data regression model has been selected to empirically test the literature driven hypotheses. Finally, the findings of this study revealed that a significant positive relationship between firms’ profitability and total debt ratio which indicate firm’s capital structure.

This paper investigates the impact of debt financing on dividend payments when they face the agency costs of free cash flow. Focusing on a sample of 120 firms listed on the Saudi Stock Exchange during the period 2011-2021. The study found a negative association between agency cost of free cash flow and dividend payment. More importantly, our research highlights the significant role of long-term debt in making more prudent use of free cash flow. The obligation to meet interest and principal payments acts as an incentive for them to steer clear of unprofitable expenses and risky investments. Concurrently, long-term debt imposes restrictive clauses in debt contracts, such as minimum dividend distribution requirements, which further encourage higher dividend payments. Since interest and debt repayments are fixed obligations, using free cash flow for dividend disbursement is considered a more profitable and beneficial approach for shareholders in the context of Saudi Arabia.

In this paper we present an application of the dynamic tracking games framework to a monetary union. We use a small stylized nonlinear three-country macroeconomic model of a monetary union to analyse the interactions between fiscal (governments) and monetary (common central bank) policy makers, assuming different objective functions of these decision makers. Using the OPTGAME algorithm we calculate solutions for several games: a noncooperative solution where each government and the central bank play against each other (a feedback Nash Equilibrium solution), a fully cooperative solution with all players following a joint course of action (a Pareto optimal solution), and three solutions where various coalitions (subsets of the players) play against coalitions of the other players in a noncooperative way. It turns out that the fully cooperative solution yields the best results, the noncooperative solution fares worst, and the coalition games lie in between, with a broad coalition of the fiscally more responsible countries and the central bank against the less thrifty country coming closest to the Pareto optimum.

We confidently approach current issues in Green Finance (GF) from the perspective of an international organization, where the first author has previous experience as a support assistant. In fact, the economy of the EU (European Union) is deeply involved in the changing needs related to the dramatic consequences of climate change and environmental degradation, which has placed the needs of a more sustainable economy at the top of the international agenda. The environmental, social and governance (ESG) aspects are marginally addressed to arouse a major interest in questions raised by green financial products which require long-term profit expectations, and which above all contain a margin of risk that is difficult to calculate in the landscape of traditional financial instruments. Through a careful approach akin to artificial intelligence research methods, we attempt to “materialize” at least the most visible clues of this fashionable economic shift through what we call SMC (sustainable material culture) objects. The presented SMC objects serve as tangible representations of sustainable practices and can promote awareness and action incorporating into everyday life and business practices a powerful reminder and catalyst for a shift towards more sustainable investment and consumption patterns.