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The purpose of this paper is to develop an effective cost borrowing model of qualitative factors that are relevant to micro and small enterprises (SMEs) better performance.

A valid research instrument was utilized to conduct a survey on 359 SMEs (131 retail businesses, 125 service businesses, 48 farming businesses and 55 other businesses) and 897 respondents that are representative of 397 SMEs and 1,087 respondents. Correlation and regression analysis were conducted to ascertain the validity of the hypotheses.

It was established that cost of borrowing elements (interest rate and loan processing costs) are associated with SME performance. Furthermore, cost of borrowing as a whole accounts for 31.1 percent of the variation in performance Uganda’s SMEs.

Only a single research methodological approach was employed, future research through interviews could be undertaken to triangulate. Multiple respondents in SMEs (owner, manager and cashier) were studied neglecting others. Furthermore, the study used the cross-sectional approach – a longitudinal approach should be employed to study the trend over years. Finally, cost of borrowing was studied and by the virtual of the results, there are other factors that contribute to SME performance that were not part of this study.

There is need to intensify initiatives to encourage greater understanding and acceptance of cost of borrowing, select appropriate elements that includes interest rate and loan processing costs in order to have affordable source of financing to establish and grow SMEs, provide employment, competitive and contribute to countries GDP.

This is the first paper in Sub-Saharan Africa to test empirically the relationship between cost of borrowing and performance of SMEs in the Ugandan context.

The purpose of this study is to provide empirical evidence on a possible economic explanation for changes in borrowing costs of US private firms that are going public.

Using an OLS regression with firm fixed effects and the IPO as an information releasing event that alters information asymmetries between borrowers and lenders and relying on several proxies for pre-IPO information asymmetries, I analyze the impact of the IPO on changes in borrowing costs from before to right after an IPO of firms with high pre-IPO information asymmetries.

My findings indicate that small firms, firms with high R&D, firms with negative EBITDA and firms with a single lending relationship benefit more from going public by realizing larger decreases in borrowing costs after an IPO than firms with lower pre-IPO information asymmetries. The results are consistent with changing information asymmetries caused by the IPO event playing a role in changes in borrowing costs after the IPO. Furthermore, I provide empirical evidence that a reduction in the lender’s bargaining power due to the IPO event plays an important role in explaining changes in borrowing costs around that time.

This study uses a hand-collected data set of loans obtained from financial statements issued by US firms at the time of their IPO. As a result, I am able to comprehensively document changes of borrowing costs of US private firms going public and shed light on one of the economic forces behind those changes.

This study examines the effect of lone founder and family ownership on borrowing cost. In addition, the study examines the moderating influence of gender diversity on this relationship.

The study used a sample of non-financial firms listed on Pakistan Stock Exchange over the period 2012–2021. The authors used ordinary least squares regression analysis method to test the hypotheses along with generalized method of moments estimation technique to control for unobserved heterogeneity, simultaneity and dynamic endogeneity.

The authors report that borrowing cost is higher in lone founder ownership, whereas borrowing cost is lower in family firms due to lesser risks attached to such firms by lenders. Further, the presence of female directors on the board weakens this relation in the case of lone founder ownership, whereas their presence further reduces borrowing cost in family-owned firms. Additionally, using the framework of critical mass theory, the authors found that higher number of female directors on boards reduces borrowing cost. Overall, this study’s results provide empirical support for social identity and critical mass theories in the sample firms.

The study provides novel evidence of the influence of lone founder and family ownership on borrowing cost in an emerging economy, as well as the moderating effects of gender diversity on this relationship.

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

It is apparent from the empirical studies in the UK and USA that incorrect approaches are frequently used to evaluate finance leases. Sykes (1975), Hull and Hubbard (1979) and Drury and Braund (1989) in the UK and Ferrara et. al., (1980) in the USA have expressed concern regarding the methods which companies use to evaluate finance leases. For example Sykes (1975) found that only 19% of UK companies used DCF methods to evaluate leases. Hull and Hubbard (1979) observed that many companies used the implied rate of interest quoted from the lessor's leasing tables and compared this with the borrowing rate. However, these tables did not include tax cash flows and were therefore only applicable to a permanent non‐taxpaying organisation. In the most recent study Drury and Braund (1989) found that 41% of the 300 firms responding to a questionnaire used the wrong discount rate to evaluate finance leases and a further 14% used non‐discounting methods. The objective of this article is to explain how the lease or purchase decision should be evaluated. It will be shown that leasing should be compared with borrowing and three different methods of correctly evaluating the lease or borrow decision will be presented and reconciled.

How do informal lending institutions affect entrepreneurship? This paper aims to investigates the role of formal and informal credit market institutions in the decision to become an entrepreneur over the life cycle.

The author developed a dynamic Roy model in which a decision to become an entrepreneur depends on the access to formal and informal credit markets, nonpecuniary benefits of entrepreneurship, career-specific entry costs, prior work experience, education, unobserved abilities and other labor market opportunities (salaried employment and nonemployment). Using detailed Russian panel microdata (the Russia longitudinal monitoring survey) and estimating a structural model of labor market decisions and borrowing options, the author assesses the impact of the development of informal and formal credit institutions.

The expansion of traditional (formal) credit market institutions positively impacts all workers’ categories, reduces the share of entrepreneurs who borrow from informal sources and incentivizes low-type entrepreneurs to switch to salaried employment. The development of the informal credit market reduces the percentage of high-type entrepreneurs who borrow from formal sources. In the case of default, a higher value of the social network or higher costs of losing social ties demotivate low-type entrepreneurs to borrow from informal sources. The author highlights the practical implications of estimates by evaluating policies designed to promote entrepreneurship, such as subsidies and accessibility regulations in credit market institutions.

This study contributes to the literature in several ways. Unlike other studies that focus on individual characteristics in the selection for self-employment [Humphries (2017), Hincapíe (2020), Gendron-Carrier (2021), Dillon and Stanton (2017)], the paper models labor and borrowing decisions jointly. Previous studies discuss transitions between salaried employment and self-employment, taking into account entrepreneurial earnings, wealth, education and age, but do not consider the availability of financial institutions as a driving factor for the selection into self-employment. To the best of the author’s knowledge, this paper shows for the first time that the transition from salaried employment to self-employment is standard and consistent with changes in access to financial institutions. Another feature of this study is incorporating both types of credit markets – formal and informal. The survey by the European Central Bank on the Access to Finance of Enterprises (2018) shows 18% of small and medium enterprise in EU pointed funds from family or friends. Therefore, the exclusion from consideration of informal credit markets may distort the understanding of the role of the accessibility of credit markets.

The purpose of this paper is to use data on municipal bond sales in the US primary market for the period 1984–2007 to explore the effect of debt levels on the cost of borrowing for state governments.

This paper employs OLS and two-stage least squares regression model using instrumental variables.

The empirical analysis finds that despite the steady increase of state debt in recent years, there is no evidence that the market penalizes states with high-debt levels relative to other states.

The findings urge states to exercise prudence when making borrowing decisions because high-debt levels have the potential to crowd out spending for essential services and can lead to budget imbalances in the long term.

This study analyzes whether industry relatedness between a corporate borrower and its group peers significantly affects that firm's borrowing cost.

A regression analysis is run on bank-loan data of a sample of Indonesian companies for 2010–2020. The main variables of interest are the natural logarithms of the borrowing firm's number of affiliates classified within either similar 2- or 4-digit GICS industries, and the Caves weighted index of these firms' related diversification. This index measures how firms in a group are diversified in relation to the borrower. The dependent variable is the all-in credit spread, stated in basis points, over the LIBOR or similar benchmark, as of the loan issuance date.

Findings support the industry-relatedness hypothesis and contradict the risk-reduction hypothesis and show that banks charge lower loan spreads on a borrowing firm that either operates within a similar industry as its affiliate or diversifies into related sectors or industries. Consistent with the co-insurance-effect hypothesis, the results also underline the importance of the parent and first-layer firms as supporting instead of the tunneling vehicles within business groups. These conclusions hold even after segregating the sample and using the loan maturity as the dependent variable.

This study uses a unique diversification measurement based on the borrowing firm's sector or industry, relative to other group members, and offers new insights on business group diversification and bank loan costs.

In the context of statistical research into the economic value of public library services, a model was developed to demonstrate the economic benefit when books are borrowed rather than bought. The model is based on the number of book reads rather than on book purchases or library issue counts. Different assumptions applied to the model cover the hardback:paperback distinction and different levels of library costs. The most significant variable, however, is shown to lie between books that are “read through” and those “frequently consulted” for information and educational benefit. Maximising book loans through the public library is shown to be not only in the interest of individual users, but also to be economically in the public interest.

This paper aims to examine the effect of deregulation of government securities market on the cost of market borrowing of 14 major states in India.

Empirical models explaining changes in interest rates on market borrowings of the Indian states under consideration are tested. The stability of the empirical relationships are then evaluated using structural breakpoint tests conducted around known periods of deregulation in the government securities market.

The stability tests clearly pointed to difference in the dynamics of market borrowing rates pre and post deregulation for overwhelming majority of the states in the sample.

The question pertaining to whether government securities market deregulation reduced or raised states' market borrowing rates is left unaddressed in the current study.

An empirical assessment of the effects of deregulation of the government securities market on the cost of states' borrowing in India is imperative considering the key role played by them in the provision of various public services. The data set created to conduct such an analysis is unique and has the potential to uncover more interesting features about state‐level borrowing in India.