Search Results (86)

This study investigates economic decision-making behaviors among welfare recipients in Miami, Florida, by leveraging well-established experimental protocols: the Guessing Game, the Prudence Measurement Task, the Risk Aversion Task, and the Stag Hunt Game. For this purpose, our study defines financial decisions as the underlying individual preferences that serve as validated proxies for savings behavior, debt management, job-search intensity, and participation in cooperative finance. A central objective is to compare the behavior of welfare recipients to that of undergraduate students, a cohort typically used in experimental economics research. The analysis reveals significant differences between the two groups in strategic thinking and coordination, particularly across ethnic and gender lines. Non-Hispanic/Latino participants in Miami displayed significantly higher average guesses in the Guessing Game compared to their counterparts in Tucson, indicating potential discrepancies in the depth of strategic reasoning. Additionally, female participants in Tucson exhibited higher levels of coordination in the Stag Hunt Game compared to females in Miami, suggesting variance in cooperative behavior between these groups. Despite these findings, regression models demonstrate that location, gender, and ethnicity collectively account for only a small fraction of the observed variance, as evidenced by low R² values and substantial mean squared errors across all games. These results suggest that individual heterogeneity, rather than broad demographic variables, may be more influential in shaping economic decisions. This study underscores the complexity of generalizing findings from traditional student samples to more diverse populations, highlighting the need for further investigation into the socioeconomic factors that drive financial decision-making. Full article

Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, and research and development expenses. It extends the literature to non-financial outcomes of audit committee oversight. The literature thus far has focused on the financial effects of audit committee oversight, such as return on assets, return on equity, risk, debt capacity, and firm value. Data was collected from 588 publicly traded firms in the U.S. pharmaceutical industry and energy industry from 2010 to 2022. Audit oversight was measured by the novel measurement of the frequency of the term ‘audit committee’ in annual reports and Form 10Ks from the SeekEdgar database. COMPUSTAT provided the remainder of the data. Panel Data fixed-effects models were used to analyze the data. Audit committee oversight significantly increased investor rationality, significantly reduced price expectations, and significantly increased human capital investment. An inverted U-shaped relationship occurred for audit committee oversight and research and development expenses, with audit oversight first increasing research and development expenses, then decreasing them. The study makes several contributions. First, the study uses a novel measure of audit oversight. Second, the study predicts the effect of audit committee oversight on unexplored non-financial measures, such as human capital and research and development expense. Third, the study offers a current test of the Miller model, as the last tests were performed over 20 years ago. Fourth, the study examines the impact of auditing on market measures that have not been explored in the literature, such as investor rationality and short selling. Full article

Our study aims to evaluate the current Romanian context for tax control by correlating the legal framework with the administrative model, as derived through empirical analysis. Our hypotheses, confirmed by the observed macro-dynamics of tax control in a period of four years, are as follows: (1) the current legal framework for tax control is heterogeneous, incomplete, and influenced by administrative practices; (2) debt collection is an inconsistent outcome of various forms of tax control, contributing marginally to budget dynamics; and (3) the identification of tax-related illegal activities heavily depends on tax control, while the application of administrative and criminal sanctions varies significantly. The study highlights the need to (re)design the normative framework to enhance coherence and effectiveness; hence, we advanced a model of normative reform based on the three abovementioned conclusion. Full article

In Thailand, droughts severely impact agriculture, particularly in non-irrigated areas, which comprise 76.4% of the country’s farmland. This highlights the need for sustainable energy solutions to mitigate environmental impacts. Despite government efforts, including over 900 Solar Water Pumping (SWP) demonstration units, many farmers remain hesitant to adopt this technology. This study examines the factors influencing farmers’ willingness to invest in SWP in Thailand’s drought-prone north and northeast regions, the most affected areas. Data were collected from 210 families—127 in the north (NC) and 83 in the northeast (NEC)—through surveys, interviews, and observations. Results show that 75.6% of NC and 77.1% of NEC farmers are willing to invest. However, barriers include financial constraints, reliance on government aid, uncertainty about returns, and lack of information. The estimated willingness-to-pay per household is USD 1438 in NC and USD 1518 in NEC, both exceeding the cost of a basic SWP system. Education, land ownership, and debt influence investment decisions, while the cultivation area impacts the amount invested. To increase adoption and combat climate change, tailored financial support, such as loan programs and leasing options, are needed for farmers in non-irrigated regions. Full article

Access to credit is essential for transforming South Africa’s agricultural sector, particularly in enhancing value chain sustainability. This study investigated the role of credit access in supporting smallholder farmers’ value chain sustainability, as part of a broader project focused on developing a credit risk model for South African farmers. Data were collected from 223 SAFDA farmers in KwaZulu-Natal and Mpumalanga using a structured questionnaire. The average treatment effects (ATEs) of a propensity score matching (PSM) model was used to estimate the impacts of credit on the following four key variables: farm ownership, farm size, farm income, and farm assets. The results showed that farm ownership was associated with credit access, as ownership provided 1.84 times the chances of loan approval. Additionally, farm income increased by ZAR 2,849,398 for credit recipients compared to non-recipients. This income boost enhances market linkages and food value chain sustainability. This study rejects the hypothesis that credit access has no impact on smallholder farmers, highlighting its vital role in promoting agricultural development and value chain growth. It is recommended that policymakers enhance credit access and risk mitigation strategies to further support smallholder farmers. To improve access to credit for smallholder farmers in South Africa, we recommend the following measures: (1) establishing credit guarantee schemes in partnership with financial institutions to reduce lending risks; and (2) implementing financial education programs for smallholder farmers to enhance their debt management skills. Credit access has the potential to promote positive change across economic, social, and environmental aspects, improving not only the livelihoods of smallholder farmers but also contributing to broader sustainable development goals. Full article

Agriculture, a sector vulnerable to climate change, relies heavily on debt to invest in modern technology for efficiency and increased production in the face of changing climatic conditions. Despite this, a large group of smallholder farmers in South Africa are excluded from accessing credit at commercial banks, yet they make up a significant proportion of the farming population. The current funding framework in South Africa encompasses the five Cs of credit with a complex view of climate risk. Therefore, this study aimed to propose a simple climate-inclusive credit approach tailored for smallholder farmers. Specifically, this study (1) profiled the respondents and identified the status quo of credit access at commercial banks of smallholder farmers and (2) assessed smallholder farmers’ compliance with the determinants of the credit application outcome determined by commercial banks. This study used a semi-structured questionnaire to collect data from 223 smallholder farmers, who were interviewed through a referral system in two provinces. Descriptive statistics and a logistic regression model were used to analyse the data. The results reveal that the majority (71.75%) of farmers were female, with an average age of 49 years. This study also established that a substantive number of smallholder farmers operated in communal lands without a title deed, posing a challenge in accessing bank credit. The results from the logistic regression model show that the five Cs of credit were significant in determining the decision to apply for a credit facility at the bank. The model further showed a positive relationship between climate-resilient technologies/assets and credit accessibility. This study recommends the need for a simple climate-inclusive credit model that considers climate change so as to foster climate change resilience. This study suggests that banks look at the ownership of assets that promote climate resilience when it comes to assessing the credit applications of smallholder farmers. Full article

This study aims to identify the determinants of the auditor’s qualified opinion in 71 Portuguese privately owned hospitals from 2019 to 2021. Seven research hypotheses are defined, related to the characteristics of the audited hospitals (size, performance, and debt), the qualified opinion of the previous year and the auditor’s characteristics (type, gender, and switching). The hypotheses are statistically tested using logistic regression models and data collected from the ORBIS and SABI databases, as well as the hospital’s annual reports. The results evidence that the determinants of the qualified opinion in private sector hospitals are the qualified opinion from the previous year, the hospital’s debt level, and its performance. The first two factors have a positive influence, while performance has a negative influence. In turn, the size of the hospital and the characteristics of the auditor do not seem to influence that opinion. In the private health sector, it seems that the endogenous characteristics of the audited hospital have the most influence on the auditor’s opinion, while other factors, such as the auditor’s characteristics, do not appear to influence qualified opinion. The present study provides important contributions to theory and practice, as the qualified opinion is highly significant for more informed decision making and research related to audit opinion in the healthcare sector is very scarce. Full article

Education is considered an investment in human capital that is gained at the cost of knowledge acquisition. This cost is borne by the beneficiary along with subsidy provided by the government, if any, that is mainly collected through tax revenues. This article aims to systematically review the utility derived and the burden experienced with educational debt borrowers across the globe as per the three types of educational loan schemes present across the globe. This study follows the PRISMA guidelines for review selection, and 47 articles published between 1994 and 2024 were included for the final review. The study results reveal that education improves the quality of life; an educational debt servicing to income ratio above 8% is considered as a financial burden. Also, the results reveal that material benefits are high after education along with an increase in the psychological burden because of repayment concerns. This study highlights the need to move towards designing a flexible repayment system in the education loan scheme based on the income contingent schemes adopted in many countries. Income contingent schemes reduce the repayment burden of the borrowers but the return to the lender is limited to the income of the borrower, and mortgage-based schemes are associated with high repayment burden. Therefore, a dynamic scheme will fix the problems associated with the repayment burden by creating a dynamic link between the benefits received and the contributions made by the borrower. Full article

Financial literacy has emerged as a crucial factor in promoting economic stability and resilience, particularly in Montenegro. With the increasing complexity of financial products and the growing need for individuals to make sound financial decisions, the importance of financial literacy cannot be overstated. This study employs a quantitative, survey-based approach to explore the association between financial literacy levels and measures of economic stability, including savings rates, active debt management, and access to financial products. Data were collected through a representative, two-stage stratified sample of 1000 Montenegrin adults aged 18–79, ensuring comprehensive geographic coverage across all Montenegrin municipalities and balanced representation by gender and age. This stratification enables a detailed analysis of financial literacy trends across the population. Correlation analysis reveals that higher levels of financial literacy are associated with better financial practices, such as increased savings and responsible credit use, thereby enhancing economic resilience at the household level. Moreover, improved financial literacy contributes to sustainability by fostering long-term financial stability, reducing inequalities, and promoting inclusive economic growth. The findings suggest that financial literacy can mitigate the impact of economic shocks, emphasizing the need for policies that promote financial education as a tool for sustainable development. This study contributes to the literature on financial literacy in emerging economies and offers actionable insights for policymakers in Montenegro and similar contexts, highlighting financial education as a pathway to individual and national economic resilience. Full article

This study examines the effect of the investment portfolio structure on insurers’ solvency, as measured by the Solvency Capital Requirement ratio. An empirical sample of 88 EU-based insurance groups was analyzed to provide robust evidence of the portfolio’s impact on the Solvency Capital Requirement ratio from 2016 to 2022. Linear regression and supervised machine learning models, particularly extra trees regression, were used to predict the solvency ratios, with the latter outperforming the former. The investigation was supplemented with panel data analysis. Firm-specific factors, including, unit-linked and index-linked liabilities, firm size, investments in property, collective undertakings, bonds and equities, and the ratio of government bonds to corporate bonds and country-specific factors, such as life and non-life market concentration, domestic bond market development, private debt development, household spending, banking concentration, non-performing loans, and CO₂ emissions, were found to have an important effect on insurers’ solvency ratios. The novelty of this research lies in the investigation of the connection of solvency ratios with variables that prior studies have not yet explored, such as portfolio asset allocation, the life and non-life insurance market concentration, and unit-linked and index-linked products, via the employment of a battery of traditional and machine enhanced methods. Furthermore, it identifies the relation of solvency ratios with bond market development and investments in collective undertakings. Finally, it addresses the substantial solvency risks posed by the high banking sector concentration to insurers under Solvency II. Full article

In this paper, we analyzed the role of credit consortia in supporting SMEs of the Italian region of Sardinia around and during the SARS-CoV-2 pandemic crisis. Credit consortia (or credit guarantee schemes) are financial companies whose institutional role is to support small firms needing bank lending who are individually weak in the bank–firm relationship. Credit consortia are particularly relevant in Italy, where they mitigate credit restrictions for SMEs by supplying guarantees to the bank, allowing for partial coverage of potential losses, providing peer-monitoring activity, and collectively negotiating more favorable interest rates and other conditions with banks. During the SARS-CoV-2 pandemic, credit consortia had a crucial role in supporting Sardinian SMEs with guarantees and obtaining government financial support. The evolution of Sardinian companies’ financial structures during the SARS-CoV-2 pandemic shows that the confidi-supported firms have low capitalization and are financially fragile yet capable of good returns. The liquidity provided by the government during the pandemic loosened these constraints, boosting the available liquidity, which translated, in short, into higher investment and higher sales. The demographics of Sardinian companies in 2019–2022 and the volumes of loans and savings showed a strengthening of debt capital payments, increased collections, and a progressive improvement of the Sardinian companies’ net financial positions. Full article

Rising costs, complex supply chain management, and stringent regulations have created significant financial burdens on business sustainability, calling for new and rapid strategies to help enterprises transform. Supply chain digitalization (SCD) has emerged as a promising approach in the context of digitalization and globalization, with the potential to reduce an enterprise’s debt costs. Developing a strategic framework for SCD that effectively reduces the cost of debt (CoD) has become a key academic challenge, critical for ensuring business sustainability. To this end, under the perspective of four flows, SCD is deconstructed into four distinct features: logistics flow digitalization (LFD), product flow digitalization (PFD), information flow digitalization (IFD), and capital flow digitalization (CFD). To precisely measure the four SCD features and the dependent variable, COD, publicly available data from Chinese listed manufacturing enterprises such as annual report texts and financial statement data are collected, and various data mining technologies are also used to conduct data measurement and data processing. To comprehensively investigate the impact pattern of SCD on CoD, we employed the explainable machine learning methodology for data analysis. This methodology involved in-depth data discussions, cross-validation utilizing a series of machine learning models, and the utilization of Shapley additive explanations (SHAP) to explain the results generated by the models. To conduct sensitivity analysis, permutation feature importance (PFI) and partial dependence plots (PDPs) were also incorporated as supplementary explanatory methods, providing additional insights into the model’s explainability. Through the aforementioned research processes, the following findings are obtained: SCD can play a role in reducing CoD, but the effects of different SCD features are not exactly the same. Among the four SCD features, LFD, PFD, and IFD have the potential to significantly reduce CoD, with PFD having the most substantial impact, followed by LFD and IFD. In contrast, CFD has a relatively weak impact, and its role is challenging to discern. These findings provide significant guidance for enterprises in furthering their digitalization and supply chain development, helping them optimize SCD strategies more accurately to reduce CoD. Full article

Conglomerates play an important role in the functioning of capital markets. Therefore, assessing their response to external shocks is a significant risk management challenge not only for conglomerate executives but also for investors and regulators alike. In this context, a conglomerate refers to a group of companies typically operating across different industries and interconnected through both equity and debt relationships. Essentially, a conglomerate functions as a financial network whose nodes are linked by two layers of reciprocal connections. This paper introduces an algorithm to evaluate a conglomerate’s response to external shocks. Additionally, it proposes a protocol based on five key metrics that collectively summarize the conglomerate’s overall resilience. These metrics offer two major advantages: they facilitate comparisons between the strengths of different conglomerates and help assess the effectiveness of various strategies, such as internal capital reallocations, aimed at enhancing a conglomerate’s resilience. The algorithm’s usefulness, including its ability to detect cascades or “second-wave” defaults, is demonstrated through two illustrative examples. Full article

Immunity debt for various viral infections was reported globally in the post-COVID-19 era, but the data about influenza are lacking. This study collected data from Taiwan’s CDC Open Data Portal. We analyzed the weekly number of influenza hospitalizations from January 2017 to May 2024. We divided the study period into four phases: the pre-COVID-19 without influenza epidemics, pre-COVID-19 with an influenza epidemic, COVID-19 pandemic lockdown control, and COVID-19 pandemic unlock periods. The Wilcoxon rank-sum test and interrupted time series analysis were used. The median case numbers of the four time periods were 174 (IQR = 98), 431 (IQR = 160), 8, and 155 (IQR = 175), respectively. Under the COVID-19 pandemic lockdown control, the weekly influenza hospitalization case number decreased by 90.2% (p < 0.001). The non-pharmaceutical intervention (NPI) policies during the COVID-19 pandemic helped Taiwan reduce influenza hospitalizations significantly. Till now, a comparison of the prevalence of influenza pre-COVID-19 and post-COVID-19 has yet to be reported. In our study, with the pandemic unlocking, it increased by 20-fold (p < 0.001), but the case number was still significantly lower than that pre-COVID-19. Amongst other factors, this may be associated with continuing self-induced NPIs in Taiwan. Full article

The COVID-19 pandemic exacerbated challenges in the child care industry, leading to closures and financial strain. Early care and education (ECE) providers faced reduced income, increased debt, and material hardships such as food insecurity. Using survey data collected through the Child Care Resource Center (CCRC), this study examines the association between food insecurity risk, sociodemographic factors, and pandemic-related service changes among ECE providers in California. The results showed that income, race, and increased food costs were significantly associated with a higher risk of food insecurity among ECE providers. Compared to incomes greater than USD 60,000, those earning USD 40,000–USD 49,999 and USD 50,000–USD 59,999 had higher odds of food insecurity (OR: 1.94, 95% CI: 0.683–1.86; OR: 2.12, 95% CI: 0.623–1.81, respectively). Black (OR: 1.89, 95% CI: 1.21–2.94) and multi-racial respondents (OR: 1.71, 95% CI: 1.1–2.65) had higher odds of food insecurity than white respondents. Lastly, respondents experiencing increased food costs had greater odds of food insecurity (OR: 4.52, 95% CI: 2.74–7.45). These findings suggest the need for policies and interventions aimed at increasing food access among vulnerable ECE providers. Such interventions will better protect them from financial shocks and the risk of food insecurity, and will support their crucial role in healthy child growth and development. Full article