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While there is a large body of research looking at consumers’ perception of debt, much of this previous research focuses on older generations. Less is known about the perceptions and attitudes toward debt of younger consumers, specifically those from Generation Z who are from rural areas in the USA. The purpose of this paper is to identify young rural consumers’ perceptions and attitudes toward debt.

This quantitative research used surveys. A well-established scale for measuring consumer attitudes toward debt has been adopted and applied. Because of the sensitive and personal nature of debt, anonymous, self-reporting questionnaires were used to allow respondents to respond freely and minimize potential bias that could be caused by socially desirable responses. The young respondents who participated in the research were invited verbally or via email by the investigators to complete the survey online via QuestionPro.

This study found the majority of consumers from Generation Z reported that using credit is basically wrong. Also, these young consumers claimed that being in debt is never a good thing. Additionally, the authors found gender differences. Young male consumers were more likely to claim that they had their debt under control, and young female consumers were more likely to claim that financial debt had influenced their life.

These Generation Z perceptions provide constructive data for use in evaluating and amending marketers’ strategies to better connect with the young customers. Companies may want to stress how their products are risk adverse, provide a sort of financial security and will not leave the customer in debt. This is especially important following the COVID-19 pandemic as local businesses in a college community are trying to attract students back to their establishments.

This study aims to explore the perceptions of investors regarding the risks associated with funding renewable energy projects in India, as well as the various factors that influence these perceptions. The investigation is limited to debt providers and seeks to pinpoint the primary risks that bankers perceive and the drivers that shape these perceptions.

This study draws on interviews and surveys of Indian bank executives, investigating how finance providers perceive risks in the Indian context and the factors driving such perceptions. Qualitative interviews have been used for operationalizing “risk perception” within the renewable energy domain, followed by a quantitative survey and exploratory factor analysis.

The authors find that experience and capacity are the most important factors that account for 30% of the overall variance. The second factor, which accounts for 15% of the variance, includes the perceived risks in funding renewable energy projects as compared to infrastructure projects. Among individual risks, the authors find that bankers perceive technological risk to be the lowest (5%) and contractual and regulatory risks as the highest (66%) in renewable energy projects.

The study contextualizes risk perception toward renewable energy investments in the Indian context by drawing from the risk perception literature and qualitative interviews with senior bankers. It presents empirical evidence on the decision-making behavior of bankers, who are important stakeholders of the renewable energy ecosystem. The main limitation of the study is the relatively small sample, and generalizing the results to the broader population might require a larger sample. This will facilitate the use of confirmatory factor analysis and structural equation modeling, which can facilitate a more comprehensive understanding of risk perceptions in renewables financing.

Insights gained can be used to provide policy recommendations for improving the financing ecosystem of renewable energy projects. The research significantly contributes to the extant literature within the renewable energy financing domain for emerging economies.

In an effort to make audit reports more informative to users, the Public Company Accounting Oversight Board and the International Auditing and Assurance Standards Board adopted a standard that requires auditors to disclose key audit matters (KAMs). This paper aims to explore the impact of the risk information provided by KAMs on corporate debt contracting.

In China, the KAM standard went into effect for A + H cross-listing companies in 2017 and became mandatory for all listed companies in 2018. This study takes this as an exogenous shock to examine the impact of the KAM disclosures on debt contracting. This study also designs a path analysis to open the “black box” between the risk information in KAMs and the risk perception of creditors. Moreover, This study conducts a textual analysis on the KAMs information based on samples after the release of the KAM standard.

This study conducts difference-in-difference tests and find that the KAM disclosures decrease interest rates and increase the proportion of long-term debt. Path analyses reveal that the KAM disclosures lead to more favorable debt characteristics through decreasing information asymmetry. This study also finds that the more KAMs are disclosed, the more favorable debt characteristics are and that different categories of KAMs have different effects on debt contracting.

This paper highlights the benefits of KAM disclosures, which are consistent with the convergence argument of risk information disclosures. Investors’ reactions to KAMs are mixed because of the differences in how professional investors and nonprofessional investors interpret information. This study provides evidence of incrementally informative nature of KAMs from the perspective of debt holders, who are professional information users.

The study aims to explore the discrepancy between the subjective and objective debt burdens across various household socio-demographic and debt characteristics. Additionally, it seeks to establish an optimal debt service-to-income ratio (DSTI) threshold for identifying over-indebtedness.

This study utilized a sample of 1,004 respondents from a nationwide survey conducted among Polish indebted households. A discrepancy ratio (DR) measure was proposed to evaluate the divergence between subjective and objective over-indebtedness. Binary logistic regression was employed to estimate the probability of being subjectively and objectively over-indebted, as well as the discrepancy between the two measures of over-indebtedness. The study also employed numerical simulations to determine the optimal DSTI threshold for identifying over-indebted households in general and based on their socio-economic characteristics.

The study established a debt service-to-income ratio (DSTI) threshold of 20% to minimize the discrepancy between subjective and objective debt burden, which is lower than thresholds found in other studies aimed at identifying over-indebted households. Age, number of loans, self-perceived needs satisfaction and type of debt were identified as significant socio-economic and debt-related determinants of over-indebtedness. Household socio-economic and debt-related characteristics significantly influence the threshold for identifying over-indebtedness using DSTI. It can vary widely, ranging from as low as 11% for well-educated women with multiple loan commitments to 43.7% for young males with vocational education, high incomes and originating from households with four or more members.

The paper proposes a more comprehensive approach to debt burden analysis by introducing a new methodology for determining a debt service-to-income (DSTI) threshold that could serve as a measure of over-indebtedness based on the discrepancy between subjective and objective over-indebtedness. It also emphasizes the significance of socio-economic and debt-related factors in evaluating subjective and objective over-indebtedness.

As students increasingly incur debt to finance their undergraduate education, there is heightened concern about the long-term implications of loans on borrowers, especially borrowers from low socioeconomic backgrounds. Drawing upon the concepts of cultural capital and habitus (Bourdieu & Passeron, 1977), this research explores how student debt and social class intersect and affect individuals’ trajectory into adulthood. Based on 50 interviews with young adults who incurred $30,000–180,000 in undergraduate debt and who were from varying social classes, the findings are presented in terms of a categorization schema (income level by level of cultural capital) and a conceptual model of borrowing. The results illustrate the inequitable payoff that college and debt can have for borrowers with varying levels of cultural resources, with borrowers from low-income, low cultural capital backgrounds more likely to struggle throughout and after college with their loans.

This study aims to examine which categories of management control systems (MCSs) in startups are most important to external financiers. Furthermore, this paper investigates how equity and debt financiers differ in their perceptions of MCS categories and examines the relevance of MCSs for their investment decisions.

This study collects data through a cross-sectional survey sent to equity and debt financiers actively investing in startups. The results are based on survey responses from 73 financiers.

The results show that financial MCSs are considered most important, followed by strategic MCSs, while human resources MCSs are perceived as only moderately important. This paper finds significant differences in the perceived importance of MCS categories between equity and debt providers, which can be explained by differing risk profiles and monitoring needs. Although debt financiers consider financial and strategic MCSs to be less important for their portfolios’ startups than equity financiers do, debt financiers perceive MCSs as more important for their initial investment decisions.

The study sheds new light on the importance of different MCS categories in startups by analyzing external financiers’ perceptions. Overall, the empirical study provides insights that are particularly valuable for startups seeking external financing for company growth.

The fundamental theory of Modigliani and Miller (1958) states that a firm's financing decisions are independent from the firm's value. Nevertheless, several empirical studies as well as theoretical approaches from the past decade impugn this relation for real markets with their immanent inefficiencies. However, these questions are rather than academic in nature: Especially the influence of macroeconomic conditions on the market perception of debt issues is from high economic importance, since the need for new liquidity usually becomes even more urgent when the economic conditions worsen.

This paper analyzes the reaction of shareholders to the issue of debt by Latin American firms under special consideration of the macroeconomic sentiment. To do so, a sample of debt issued by Latin American companies between 2003 and 2010 is empirically examined through an event study.

The authors empirically demonstrate that specifically in Latin America, debt issuing companies show a significant underperformance during recessionary periods and an overperformance during nonrecessionary periods. These findings differ from previous results for mature capital markets. The authors conclude that not only the overall economic conditions matter to explain stock market reactions on bond issues but also the maturity of the corporate debt market plays an important role.

The authors provide first evidence that the previously described changes in the returns on specific stocks depending on the economic sentiment (Baker and Wurgler, 2006) are under certain conditions also present in the market for corporate debt.

This paper aims to analyze decisions about payment rates on credit card statements by using background factors and perceptions that indirectly influence beliefs, according to the theory of planned behavior.

Since legal and institutional frameworks and household financial surveys are heterogeneous among countries, household data on the Chilean economy is used as the starting point in this matter.

The probability that an individual chooses to pay amounts less than the total billing of their credit cards rises with essential variables related to perceived behavioral control. Being the head of the household, being younger, perceiving a high or excessive financial burden of debt and facing unfavorable and unexpected situations that divert the budget, among others, are relevant to repayment decisions.

The novelty of this article is that its psychological approach differs from the traditional focus of economic rationality regarding credit cards. The results are relevant for policymakers and financial regulators due to implications for household behavioral finance and means of payment.

Analizamos la decisión de la tasa de pago de los estados de cuenta de tarjetas de crédito a través del uso de factores de fondo y percepciones que indirectamente inciden en las creencias de acuerdo a la teoría del comportamiento planeado.

Debido a que los marcos legales e institucionales, así como también las encuestas financieras de hogares son heterogéneas entre países, se utilizan datos de los hogares de la economía chilena como un punto de partida en esta materia.

La probabilidad de que un individuo elija pagar un monto menor que el total de facturación de sus tarjetas de crédito es afectada por variables proxy asociadas al control conductual percibido. La condición de ser jefe de hogar, ser más joven, la percepción de una alta o excesiva carga financiera de la deuda, y enfrentar situaciones desfavorables e inesperadas que desvían del presupuesto, entre otras, son relevantes para las decisiones de pago.

La novedad de este artículo es que su enfoque difiere del enfoque tradicional de la racionalidad económica en relación a las tarjetas de crédito. Los resultados son relevantes para los hacedores de política y reguladores financieros debido a sus implicancias para las finanzas conductuales de los hogares y sus medios de pago.

The purpose of this paper is to examine the use of emotional appeals in advertisements for loans and explored consumers’ perceptions of advertisements featuring such appeals in order to explore how emotional meanings are transferred to consumers via advertising.

Study 1 employed content analysis to examine the use of emotional appeals in loan advertisements. Over 2,900 editions of eight British newspapers were monitored for advertisements for loans containing emotional appeals. Study 2 employed 33 semi-structured interviews to explore consumers’ perceptions of emotional appeals in loan advertisements.

Loans were positioned as services providing relief, security and excitement. The use of negative emotional appeals such as guilt, fear and sorrow was sporadic. Loans that carried the most risk were advertised with positive emotional appeals the most frequently. Five dimensions of perceptions of emotional loan advertisements were conceptualised from the reported data in Study 2.

This is the first study in the UK to examine the use of emotional appeals in loan advertising and to explore consumers’ perceptions of loan advertisements featuring emotional appeals. The study identified five dimensions of perceptions of emotional appeals.

Capital structure decisions rely on a complex array of theoretical foundations and practical considerations. At the managerial level, it is impractical to base decisions purely on theory. While one can develop a perception of an optimal capital structure, the decision is often obscured by practical limitations to the theoretical base. In order to be useful to practicing managers, policies and decision techniques need to be efficiently accomplished and based on available information. This paper seeks to provide that practical framework.

This paper recounts the simple theoretical base for capital structure, highlights some of the problems encountered when applying the theory to reality, and suggests a framework for practical managerial decisions about capital structure. This exposition is especially useful in undergraduate business curricula, in particular for finance majors considering professional management as a career.

While application of traditional capital structure theory is often impractical, numerous tools are available for use by professional managers to make informed decisions about capital structure.

The conclusions from this paper provide a framework for current and prospective professional managers for making appropriate capital structure decisions in their management careers.

Proper managerial techniques and considerations for leverage and capital structure can potentially benefit society through more prudent use of debt, based on the variety of measures presented in this paper.

Topics discussed in this paper have been in development since the 1950s. The contribution of this paper is the creation of a framework for understanding and applying these topics, for pedagogical and management training purposes.