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This paper develops a debt-run model to study the effects of liquidity injections on debt markets in the presence of a renegotiation option. In the model, creditors decide when to withdraw their funding and equityholders can renegotiate the contract terms of debt. We show that when equityholders have a large bargaining power, liquidity injections into distressed firms can rather cause more aggressive runs from their creditors, hurting the debt value. This outcome occurs because equityholders can strategically utilize the renegotiation option as a bankruptcy threat, pushing down the debt value below the potential liquidation value of the firm. In such a scenario, a deterred default resulting from emergency capital injections could be detrimental to creditors.

This paper aims to investigate the prevalence of corruption in Ghana to understand how and why it has turned public procurement into a mere money-making scheme instead of a means to provide needed public goods and services.

The study focuses on Ghana as a case study and mobilizes the monetization of politics lenses. Data are collected via interviews with key officials across the procurement sector (including the government, donors and civil society), documents, documentaries and news articles.

The findings suggest that the increasing costs of elections and political financing coupled with the costs of vote-buying, which has become informally institutionalized, intensify corruption practices and, consequently, turns public procurement into a mere source of cash for political ends. Political appointments and legalized loopholes facilitate this by helping to nullify the safeguard accounting and other control institutions are designed to provide. Likewise, enduring poverty and rising inequality “force” citizens into a vote-buying culture which distorts democratic premises that may drive out unscrupulous politicians; thus, perpetuating capture schemes. Civil society's efforts to remedy these have had little success, and corruption and inequality remain rife.

The main practical implication of the study lies in the need for a gradual demonetization of elections, and the consideration of the fundamental function of public procurement as a policy instrument embedded in economic, social, cultural and environmental plans. Additionally, given the connectedness of the various corruption issues raised, a comprehensive system-based approach in dealing with them would be more effective than a piecemeal approach targeting each issue/problem in isolation.

While extant literature has examined the issue of endemic corruption in developing countries using state capture, few have attempted to explain why it remains enduring, particularly in public procurement. This study, therefore, contributes to the literature on corruption and state capture theoretically and empirically by drawing on monetization of politics from political science to explain why corruption and state capture endure in certain contexts (with Ghana as an illustrative example) which reduce public procurement to a cash-milking scheme.

This paper aims to examine the factors that contribute to the external debt growth in Ghana.

The study adopts the autoregressive distributed lag (ARDL) model and the error correction model (ECM) to establish the short-run and long-run relationships between the dependent variable (external debt) and the independent variables (debt service, exchange rate, gross domestic product, government expenditure, import and trade openness), using a time series data spanning from 1990 to 2019.

The results indicate that debt service, GDP, government expenditure and trade openness have a positive and significant relationship with external debt, while import and exchange rates have a negative relationship with external debt in the long run. In the short run, debt service, import, exchange rate and trade openness have a positive and significant relationship with external debt, while GDP has a negative relationship with external debt.

The study found that variables such as government expenditure, debt service and import contribute significantly to the nation’s external debt stock. These findings suggest that policymakers should focus on prioritising and cutting down expenditure in their quest to curtail the debt menace facing the nation. Since existing debt service has the tendency of influencing debt stock, it is recommended that government should reduce borrowing in order avoid debt trap. Home-grown policies to reduce imports must also be encouraged. As these drivers of external debt are tackled head-on, Ghana can be rightly positioned to record lower levels of public debt and subsequently reap the benefits of economic growth.

The study adds to the public debt literature, specifically addressing the idiosyncratic determinants of external debt within the Ghanaian context.

This study examines the implications of real asset liquidity for accounting conservatism. We investigate whether the liquidity of a firm’s physical assets mitigates lenders’ demand for conservatism by increasing the amount lenders can recover if the firm is liquidated, a theoretical prediction in Göx and Wagenhofer (2009).

We use an asset redeployability index as a proxy for firm-level real (physical) asset liquidity and adopt ordinary least squares (OLS) regressions in the test. We also investigate the differential impact of real asset liquidity on conservatism in two unique settings where lenders’ demand for accounting conservatism varies (loan initiation and bank deregulation).

We find that accounting conservatism decreases as real asset liquidity increases. The negative effect of real asset liquidity on conservatism increases as the quantity of the firm’s real assets increases, and the negative association is strengthened when firms face high financing constraints and have access to public debt markets. The moderating effect of real asset liquidity on lenders’ demand for conservatism increases (decreases) when real asset liquidity is more (less) important to lenders.

This study provides direct empirical evidence for the theoretical prediction in Göx and Wagenhofer (2009). Prior research shows that real asset liquidity impacts a firm’s capital structure and investment decisions (Campello and Giambona, 2013; Kim and Kung, 2017; Ortiz-Molina and Phillips, 2014; Williamson, 1988). We complement this literature by providing evidence that real asset liquidity also plays a role in financial reporting by reducing accounting conservatism.

This study analyzes the influence of institutional and macroeconomic factors, in addition to firm-level factors, on the capital structure of listed industrial Latin American (LATAM) companies. The objective is to provide empirical evidence on LATAM firms from (1) the perspective of the traditional trade-off and pecking order theories and (2) from approaches that introduce the impact of institutional and macroeconomic factors into the analysis.

The empirical analysis adopts an econometric methodology using panel data on companies from Argentina, Brazil, Chile, Colombia, Mexico and Peru from 2008 to 2018.

The results indicate that, in addition to the firm-level characteristics, the institutional and macroeconomic characteristics of the countries influence the capital structure of LATAM companies.

The study presents some limitations. It is mainly focused on listed companies sourced from only six LATAM countries due to a lack of data. It would be advisable to carry out similar studies with corporate governance factors, family businesses and small and medium-sized enterprises (SMEs).

The results can serve as a reference for economic agents and professionals, encouraging them to consider the evolution of institutional and macroeconomic variables when making decisions. Academically, our findings verify the validity of conventional theories and the relevance of incorporating external institutional variables into the capital structure framework.

The importance of this research lies in analyzing the capital structure of companies in a little-explored geographic area, LATAM, including institutional and macroeconomic factors and using the new Orbis database.

Este estudio analiza la influencia de los factores institucionales y macroeconómicos, además de los factores a nivel de empresa, en la estructura de capital de las empresas industriales cotizadas latinoamericanas (LATAM). El objetivo es proporcionar evidencia empírica sobre las empresas latinoamericanas desde (1) la perspectiva de las teorías tradicionales trade-off y pecking order, y (2) desde los enfoques que introducen el impacto de los factores institucionales y macroeconómicos en el análisis.

El análisis empírico adopta una metodología econométrica, utilizando datos de panel de empresas de Argentina, Brasil, Chile, Colombia, México y Perú, de 2008 a 2018.

Los resultados indican que, además de las características a nivel de empresa, las características institucionales y macroeconómicas de los países influyen en la estructura de capital de las empresas latinoamericanas.

El estudio presenta algunas limitaciones, principalmente se centra en empresas cotizadas provenientes de solo seis países de LATAM, debido a la falta de datos. Sería recomendable realizar estudios similares con factores de gobierno corporativo, con empresas familiares y PYMES.

Los resultados pueden servir de referencia para los agentes económicos y profesionales, animándolos a considerar la evolución de las variables institucionales y macroeconómicas a la hora de tomar decisiones. Académicamente, nuestros hallazgos verifican la validez de las teorías convencionales y la relevancia de incorporar variables institucionales externas en el marco de la estructura de capital.

La importancia de esta investigación radica en analizar la estructura de capital de empresas en un área geográfica poco explorada, LATAM, incluyendo factores institucionales y macroeconómicos y utilizando la nueva base de datos Orbis.

This paper aims to propose a new housing finance mechanism through gold price as an alternative to interest rate in Islamic home financing, especially on Bai’Bithaman Ajil (BBA) contract.

This study using simulation approach to calculate the monthly installments for home financing using gold price references. In simple terms, propose a financing formula in the BBA contract by converting the selling price of the house to the gold price, and then the monthly installments also follow the actual gold price. The authors provide an example by simulating this formula using historical data and cases of housing financing at Indonesian Islamic banks. The authors compare housing financing models based on gold prices and interest rates. Finally, The authors can compare the two housing financing models that are affordable for low-income people.

The results show that in the initial period, monthly installments of BBA based on gold price were lower than home financing based on interest rate. This result makes it possible for low-income people who cannot access financing based on interest rates to access financing based on gold price. However, the total installments of financing based on gold prices are higher than the financing model based on interest rates.

The paper confines one contract, namely, BBA, as it is claimed to be more Shariah-compliant than others.

These findings suggest an alternative model for Islamic banks and regulatory authorities in Indonesia to replace the interest rate reference with the gold price in BBA contract housing financing. This model can offer competitive advantages for Islamic banks, including lower initial installments and inflation-protected profits, serving as a means of differentiating them from conventional banks.

Gold price-based housing financing model in Islamic banks will increase the affordability of housing financing for low-income people.

This paper tries to solve two problems, namely, first, the problem of assuming that Islamic and conventional banks are the same, and second, the problem of housing finance affordability. This study needs to be explored.

Prior studies suggest that, in an industry in which several public firms operate (i.e. greater public firm presence), uncertainty about business operations within the industry is reduced due to greater analyst coverage and quality of information disclosure. In this study, the authors examine how UK private firms respond to investment opportunities in fixed intangible assets (FIAs) in an environment characterised by greater public firm presence (PFP).

Using data from 61,278 (1,358) private (public) UK firms operating in ten sectors spanning from 2006 to 2016, the authors conduct this analysis by using panel econometric techniques.

The authors observe that private firms are more responsive to their FIA investment opportunities when they operate in industries with more PFP. Also, the authors find that firms in industries with better information quality use more debt and have longer debt maturity security but less internal cash flow. Overall, the findings indicate that PFP generates positive externalities for private firms by lessening industry uncertainty and enhancing more efficient FIA investment. The results are robust to endogeneity concerns.

A key limitation of the study is that it focuses on a single country (the UK) and therefore there is a likelihood that the results found are specific to this setting but not others, particularly developing and emerging economies. Thus, future studies could explore these ideas from the viewpoint of multiple countries.

Overall, the study demonstrates the importance of information disclosure in driving investment decisions of firms.

While this paper builds on the information disclosure and corporate investment literature, it is one of the first attempts, to the best of the authors’ knowledge, to explore how private UK firms respond to investment in FIAs in an environment characterised by greater PFP.

The purpose of this paper is to engage in a systematic examination of previous scholarship on the relationship between Sharia governance (SG), which is represented by the Sharia Supervisory Board (SSB), and the Internal Sharia Review (ISR), to determine whether the ISR can minimize financing risk in Islamic banking.

The literature search consisted of two steps: a randomized and systematic literature review. The methodology adopted in this article is a systematic literature review.

To reduce the risk of financing in Islamic banking, SG must be implemented optimally by making rules regarding the role of the SSB in supervising customer financing. In addition, it is a necessary to establish an entity that assists the SSB in the implementation of SG, namely, the ISR section, but there is still very little research on the role of the SSB and ISR in minimizing financing risk.

Establishing an ISR to assist the SSB in carrying out its duties has direct practical implications for Islamic banking: minimizing financing risks and compliance with Islamic Sharia principles. In addition, new rules regarding the role of SSBs and the ISR in reducing credit risk include monitoring customers to ensure that they fulfill their financing commitments on time. This new form of regulation and review can be used as a reference by the Otoritas Jasa Keuangan or Finance Service Authority to create new policies or regulations regarding SG, especially in Indonesia.

Subsequent research may introduce other more relevant variables, such as empirically testing the competence, independence or integrity of SSB and the ISR team as it attempts to minimize the risk of financing in Islamic banks. In addition, further research is expected to examine whether the SSB or the ISR team has a positive or negative influence on the risk of financing Islamic banks with secondary data.

This study aims to examine a distinctive loan contract widely practiced in a Muslim society.

This research adopts a qualitative research approach. The study was divided into two main stages. Stage I research relied on documentary analysis of pagang gadai contracts. Hence, Stage II research was an in-depth study in a selected nagari, adopting an ethnography approach. The study was conducted in the district of Tanah Datar, West Sumatera, from 2020 to 2023.

The findings of this study show that the distinctive mode of contact breaks some basic rules of Islamic finance (the practice contains riba and gharar). The practice however is prevalent in the society studied due to the influence of the customary law namely the communal ownership of lands. The practice brings impacts on the society both positives and negatives.

This study focuses on the traditional mode of pagang gadai contract, which involves the transfer of right to cultivate productive agricultural lands for an exchange of loan measured in gold measurement system and excludes other modes of pagang gadai.

Revision(s) of the contract mode is an urgent matter if the society to be rescued from practicing this type of contract that contains element of exploitation and oppression.

The revision(s) is needed if the society wants to follow the teaching of Islam comprehensively, as claimed in the philosophy adopted.

To the best of the author’s knowledge, this is the first study on pagang gadai that focuses on impacts of the practice on the society studied.

This study aims to investigate whether social reputation via corporate social responsibility (CSR) awarding facilitates access to debt and decreases the cost of debt and whether governance mechanisms moderate this relationship.

The sample covers the period between 2002 and 2021, during which CSR award data were available in the Thomson Reuters Eikon/Refinitiv database. The empirical models are based on country, industry and year fixed-effects regression.

While the main findings produced an insignificant result for access to debt, they indicated strong evidence for the positive relationship between CSR awarding and the cost of debt. Moreover, the moderating effect highlights that while the sustainability committee helps CSR-awarded companies access debt more easily, independent directors help firms decrease the cost of debt via CSR awarding. Furthermore, the results differ between the US and the non-US samples, earlier and recent periods, high- and low-leverage firms and large and small firms.

For the first time, to the best of the authors’ knowledge, the authors assess whether social reputation via CSR awarding facilitates access to debt and decreases the cost of debt in an international and cross-industry sample. Little is known about the effect of social reputation on loan contracting, although social reputation conveys broader information that goes beyond the firm’s internal (performance) and external (reporting) CSR practices. The authors also draw attention to the differing roles of distinct governance mechanisms in leveraging social reputation for loan contracting.