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Article
Publication date: 28 March 2023

Juan Chen, Hongling Guo and Zuoping Xiao

This study aims to investigate how high-speed railway (HSR) development affects urban construction investment (UCI) bond yield spreads based on China’s background.

Abstract

Purpose

This study aims to investigate how high-speed railway (HSR) development affects urban construction investment (UCI) bond yield spreads based on China’s background.

Design/methodology/approach

This study constructs a quasi-natural experiment and adopts regression analyses to empirically examine the relation between HSR development and UCI bond yield spreads. The empirical analysis is based on a Chinese sample of 15,109 bond offering observations from 2008 to 2019.

Findings

The results show that HSR development reduces UCI bond yield spreads. Mechanistic analysis shows that HSR development increases land prices and the level of urbanization, which in turn lowers the UCI bond yield spreads. In addition, the impact of HSR development on UCI bond yield spreads is more significant at higher marketization levels and lower degrees of dependence on land finance cities where UCI corporations are located.

Research limitations/implications

The results imply that transportation infrastructure improvement, such as HSR development, helps to enhance the credit of local governments and the solvency of UCI corporations and ultimately reduces the financing cost of UCI bonds.

Originality/value

This paper provides theoretical support and empirical evidence for the impact of transportation infrastructure construction on the implicit debt risks of local governments in China, which enriches the research on the “HSR economy” from a micro perspective and expands the research on the influencing factors of local governments’ debt risk.

Article
Publication date: 11 January 2024

Christine R. Martell

Inflation and federal monetary efforts to control it with interest rate hikes have very real and overwhelmingly negative consequences on US local governments following the onset…

Abstract

Purpose

Inflation and federal monetary efforts to control it with interest rate hikes have very real and overwhelmingly negative consequences on US local governments following the onset of COVID-19. This study explores the post-pandemic inflationary environment of US local governments; examines the impacts of inflation and high interest rates on local government revenue, operating costs, capital costs, and debt service; reviews local government inflation management strategies, including the use of intergovernmental revenue; and assesses ongoing threats to local government financial health and financial resilience.

Design/methodology/approach

This study uses trend and literature analysis to comment on current issues local governments face.

Findings

The study finds that the growth of property values and resulting stability of property tax revenue has been important to local government revenues; that local governments bear very real burdens as operating and capital costs increase; and that the combination of high inflation and interest rates affects local government debt issuance by negatively affecting credit quality and interest costs, leading to municipal market contraction. Local governments have benefitted tremendously from intergovernmental revenue, but would be ill-advised to rely on it.

Practical implications

Vulnerabilities owing from revenue mismatch with the economy; inadequate affordable housing, inequality, and social issues; a changing workforce and tight labor market; climate change; and federal fiscal contraction—all of which are exacerbated by high inflation and interest rates—require local governments to act strategically, boldly and collaboratively to achieve fiscal health and financial resilience, and to realize positive returns of investments in people and capital.

Originality/value

This work is unique in addressing the post-pandemic impact of inflation and interest rates on local governments.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1096-3367

Keywords

Open Access
Article
Publication date: 15 August 2022

Shengfeng Lu, Sixia Chen, Yongtao Cang and Ziyao San

This study examines whether and how government fiscal pressure influences corporate charitable giving (CCG).

Abstract

Purpose

This study examines whether and how government fiscal pressure influences corporate charitable giving (CCG).

Design/methodology/approach

The authors exploit sub-national tax revenue sharing changes as exogenous variations to government’s fiscal pressure at the city level and then construct a quasi difference-in-differences (DiD) model to conduct the analysis based on a sample that consists of 14,168 firm-year observations in China during the period of 2003 to 2012.

Findings

The authors found that firms increase charitable donations when local governments face higher fiscal pressure. Such effects are more pronounced for firms that have stronger demand for political connectedness in the sample period. Furthermore, this study’s findings suggest that the timing strategy of donating helps firms to lower the effective tax rate and to build stronger political connections. In addition, donating firms outperform non-donating firms in terms of bank loan access and market reputation.

Originality/value

The authors contribute to at least three lines of literature: first, extend the understanding of timing strategies of corporate charitable behaviors; second, contribute to the literature studying the “crowd out” effect between government-provided charitable funds and private donations; finally, contribute to the emerging literature exploring the financial interests associated with corporate donation strategy (Claessens et al., 2008; Cull et al., 2015).

Details

China Accounting and Finance Review, vol. 25 no. 2
Type: Research Article
ISSN: 1029-807X

Keywords

Book part
Publication date: 17 November 2023

Simon Ofori Ametepey, Clinton Ohis Aigbavboa and Wellington Didibhuku Thwala

The essence of finance has become essential in the sustainability discussion in recent times as a result of the capital intensive nature of sustainable projects. This has…

Abstract

The essence of finance has become essential in the sustainability discussion in recent times as a result of the capital intensive nature of sustainable projects. This has motivated financial experts and institutions to develop various financial instruments and mechanisms to further advance the course of protecting the environment, and decreasing the release of excess carbon and GreenHouse Gases. This is to also provide the opportunity for funding Green or sustainable infrastructure development. This chapter advances a discourse on matters relating to sustainable financing of infrastructure projects. The fundamentals of sustainable or green funding of infrastructure projects, and sustainable schemes of financing green infrastructure projects are discussed.

Details

Sustainable Road Infrastructure Project Implementation in Developing Countries: An Integrated Model
Type: Book
ISBN: 978-1-83753-811-9

Article
Publication date: 5 October 2022

Yaxin Ma and Fauziah Md Taib

This study aims to propose a new housing affordability solution by combining the Islamic finance concept of Musharakah Mutanaqisah (diminishing partnership) with a cooperative and…

Abstract

Purpose

This study aims to propose a new housing affordability solution by combining the Islamic finance concept of Musharakah Mutanaqisah (diminishing partnership) with a cooperative and crowdfunding model. The proposed alternative housing loan model is presented to experts in financing and real estate business, whose views and comments were solicited to evaluate the applicability of the proposed model in real world.

Design/methodology/approach

This is a qualitative study that uses semi-structured interviews to determine the initial thoughts of various stakeholders regarding the adoption and implementation of the proposed model.

Findings

The majority of experts (interviewees) agreed with and appreciated the model’s original ideas but expressed concern over the absence of community culture and trust in China, which could represent a serious threat to the model’s viability. It is anticipated that the suggested model will be implemented as pilot projects by the local government in places where Islamic culture and faith are more widespread, hence possibly impacting the model’s effective implementation.

Research limitations/implications

As there are insufficient Islamic financial specialists in China, the limitation of this qualitative study is the small sample size. If certain policymakers could participate, the outcomes would be more hierarchical and trustworthy.

Originality/value

This is, to the best of the authors’ knowledge, the first study of its kind to examine the viability of this innovative Islamic cooperative housing finance scheme within the context of a specific housing issue in China.

Details

Journal of Islamic Accounting and Business Research, vol. 14 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 26 May 2023

Rogers Rugeiyamu

The purpose of this study is to assess reasons behind experienced challenges by local government authorities (LGAs) in operating Women, Youth and People with Disabilities Fund…

Abstract

Purpose

The purpose of this study is to assess reasons behind experienced challenges by local government authorities (LGAs) in operating Women, Youth and People with Disabilities Fund (WYDF) in Tanzania. Specifically, it assesses the reasons behind failures to recover loan by LGAs and groups of Women, Youth and People with Disability (WYPWD).

Design/methodology/approach

The qualitative approach was recruited in this study involving Tunduru District Council as a case study. Data were collected through Interviews, Focus Group Discussion and Documentary Review. Interviews were administered to Community Development Officers (CDOs) while FGD to WYPWD groups. Reviewed documents include laws, regulations and publications on social development funds. Data were analyzed using content analysis approach and backed up by quotations during presentation.

Findings

Failures to recover loans from beneficiaries is attributed to weaknesses of both groups and LGAs. LGAs suffer from lack of capability to manage the fund, poor governance practices and misuse of public funds, and groups lack awareness of the fund's goals.

Research limitations/implications

Due to experienced challenges, efforts by groups and LGAs to reclaim loan have been unsuccessful, which has prevented the fund from achieving its goals.

Practical implications

The central government should concentrate on ongoing LGAs capacity building so that they can successfully handle the fund, it is advised for improvement. Again, LGAs should establish an information system linked with groups to track their projects implementation. Once more, groups should be informed about the purpose of creating the fund and the advantages of the loan to them and to local economic development (LED). Furthermore, groups need entrepreneurial abilities to be able to participate in businesses that they can manage. Moreover, organizations should receive ongoing education so that they may repay the loan voluntarily.

Social implications

Community awareness on the aims of the fund should be provided to impact LED.

Originality/value

Recommendations given can be applied by other developing countries struggling to uplift citizens economically through social development funds.

Details

International Journal of Public Leadership, vol. 19 no. 3
Type: Research Article
ISSN: 2056-4929

Keywords

Article
Publication date: 7 March 2023

Michael Jackson Wakwabubi, Stephen Korutaro Nkundabanyanga, Laura Orobia and Twaha Kigongo Kaawaase

The purpose of this paper is to establish the mediating role of local government delivery system (here after delivery system) in the relationship between local governance…

Abstract

Purpose

The purpose of this paper is to establish the mediating role of local government delivery system (here after delivery system) in the relationship between local governance (hereafter, governance) and financial distress of local governments in Uganda.

Design/methodology/approach

This study is correlational and cross-sectional. It uses a questionnaire survey on a sample of 109 local governments (districts) of Uganda. The data are analysed using SPSS, partial least squares structural equation modelling and Jose’s MedGraph.

Findings

Results indicate that government delivery system mediates the relationship between governance and financial distress. Delivery system in terms of capacity development and community participation causes positive variances in local government’s financial distress. Also, governance in terms of political clientelism significantly contributes to financial distress more than oversight mechanisms and audit quality. The study finds that delivery system causes more variance in financial distress than governance.

Originality/value

This study applies the new public management and network governance theory and tests the efficacy of delivery system and governance on financial distress in one-go and succeeded in explaining financial distress of local government using Uganda as the setting; the authors join previous scholars that root for multi-theoretical approaches. Also, this study’s design has allowed for the consideration of more than simply the main effects of governance and delivery systems by exploring the mediating role of delivery systems in the link between governance and financial distress. As such, the authors may now have a more accurate and detailed description of the relationships between governance, delivery system and local government financial distress.

Details

Transforming Government: People, Process and Policy, vol. 17 no. 3
Type: Research Article
ISSN: 1750-6166

Keywords

Open Access
Article
Publication date: 16 November 2023

P.K. Priyan, Wakara Ibrahimu Nyabakora and Geofrey Rwezimula

The study aims to evaluate the influence of capital structure decisions and asset structure on firms' performance for East African listed nonfinancial firms.

Abstract

Purpose

The study aims to evaluate the influence of capital structure decisions and asset structure on firms' performance for East African listed nonfinancial firms.

Design/methodology/approach

The research is descriptive and employs secondary data from the East African capital markets' websites. The generalized method of moments approach is used to estimate the relationship due to its ability to account for endogeneity problems.

Findings

The result shows that capital structure decisions and asset structure strongly influence the firms' performance. When long-term debts, short-term debts and tangible fixed assets increase, the return on total assets increases. An increase in the total debt ratio raises the return on equity (ROE). However, the increase in long-term debt lowers the ROE.

Practical implications

The results will help investors and potential investors decide on a financing policy that maximizes performance. Likewise, governments and other policymakers review the capital markets' frameworks to attract institutional and individual investors to the markets for financial availability and to increase profitability.

Originality/value

The research provides evidence on the influence of capital structure decisions and asset structure on firms' performance. Furthermore, its results contribute to firms' financing policy formulation and the corporate finance literature.

Details

PSU Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2399-1747

Keywords

Expert briefing
Publication date: 29 February 2024

The housing market is experiencing its largest downturn, triggered by government action in 2020 to limit financial risks from the property sector by introducing debt ceilings for…

Details

DOI: 10.1108/OXAN-DB285545

ISSN: 2633-304X

Keywords

Geographic
Topical
Open Access
Article
Publication date: 28 July 2023

Eliza Sharma and John Ben Prince

The paper aims to explore the problems related to the financial management of municipal corporations in India and to suggest solutions.

Abstract

Purpose

The paper aims to explore the problems related to the financial management of municipal corporations in India and to suggest solutions.

Design/methodology/approach

The study is based on primary data collected from a sample of 577 employees of municipal corporations working in four metro cities of India, namely Chennai, Mumbai, Kolkata, and Delhi. Data were put through exploratory and confirmatory factor analysis for problem identification and inferences were classified and grouped to map the solutions for these problems.

Findings

The study found that municipal corporations in India face four major problems or issues in their financial management. These problems are mainly related to the four dimensions: Power, Interruptions, Finances, and Resources. The model used to explore these four types of issues is named as “PIFR model” by the author.

Originality/value

The findings suggest that real-world problems can be represented through a conceptual model that helps in identifying practical suggestions which can be implemented by municipal corporations at the ground level for better financial management.

Details

Public Administration and Policy, vol. 26 no. 2
Type: Research Article
ISSN: 1727-2645

Keywords

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