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By utilizing a large sample of firms during the period 2006–2017, the author determine which types of firms are more likely to go bankrupt. The author shows that over-leveraged firms have significantly higher probability of going bankrupt, which highlight the importance of the concept of optimal corporate capital structure. The author finds that private firms and export-oriented firms experience lower hazard rates. Proposed hazard statistical model highlights that more profitable firms, firms with better liquidity, firms with more tangible assets and larger firms all have statistically higher survival rates. The author finds that bankruptcy rates are the lowest among service firms and the highest in construction industry. Ownership variables indicate that state-owned firms, firms with foreign ownership and firms, owned by holdings, are less likely to fail, all else equal. Finally, the author demonstrates that proposed statistical model successfully predicts the probability of bankruptcy. The mean cumulative hazard function for a group of surviving firms is statistically significantly lower compared to a group of failing firms. In order to survive in a long run, firm’s management should especially be aware of their optimal capital structure and use rather less leverage than going over the sustainable level.

In as much as it is contested, the Belt and Road Initiative (BRI) is also unexplored, underdiscussed, and, as a result, misunderstood. Frequently viewed through the lens of international relations and global economy, the diverse dimensions of collaboration, including business and research-industry clusters, that BRI enhances, tend to be excluded from the analysis. In a similar manner, the role of the Arab Peninsula in the grand strategy underpinning BRI and its implementation is rarely discussed. BRI is a forward-oriented initiative, an attempt to reap benefits of developments and circumstances that are only nascent. This bears two potent implications. First, as China attempts to influence the context in which it operates, it is subject to change itself; the Chinese business sector evolution attests to that. Second, some of China’s not so obvious partners of today, including those in the Arab Peninsula, are about to turn into key interlocutors of tomorrow. BRI taps into opportunities thus created. This chapter elaborates on these issues and, against this backdrop, outlines how the remaining chapters included in this volume add to this discussion.

This case study examines the controversial practice by the Commonwealth of Australia during the period 1988–2002 of using currency swaps as part of its debt management strategy. Although the strategy provided a positive return overall, the impact of currency swap usage created significant year-by-year variations in returns, which posed a risk to debt interest and financing requirements. This suggests that the risk limits imposed on this strategy were both inappropriate and insufficient. Nonetheless, these findings provide insights into how such a policy could best be implemented given recent proposals (OECD, 2007) for derivatives use by public debt managers.

This study aims to investigate the relationship between political connections and the over-indebtedness of firms in the construction industry. Furthermore, this study explores the moderating effect of corporate governance mechanisms with monitoring intent on this relationship.

This study uses the data from China’s listed construction firms for the years 2010–2019 to run the fixed-effect regression. This study constructs the optimal capital structure mathematical model by following the trade-off approach.

The research results show that most of China’s listed construction firms are surprisingly over-indebted in the long run. This study affirms that political connections positively impact the over-indebtedness of China’s listed construction firms. However, corporate governance can alleviate the impact of political connections on the over-indebtedness of China’s listed construction firms.

There were limited studies to discuss the relationship between political connections and the over-indebtedness of construction firms, and no particular attention has been given to the moderating effect of corporate governance mechanisms on the relationship between political connections and over-indebtedness. Moreover, in calculating the over-indebtedness of China’s listed construction firms, this study considers the financial characteristics of China’s construction firms when building the mathematical model of optimal capital structure, which makes the calculation results of over-indebtedness closer to reality.

This paper seeks to measure and characterise the extent of consumer over‐indebtedness among the European Union (EU) member states.

The study evaluates alternative measures of over‐indebtedness on the basis of the permanent‐income/life‐cycle theories of consumption behaviour and adopts a subjective approach in identifying over‐indebted households on the basis of European household survey data. It then investigates the main characteristics of over‐indebted households.

The empirical results reveal that over‐indebtedness was a significant problem across EU member states in the mid‐1990s. Moreover, an inverse relationship emerged between the extent of the over‐indebtedness problem and the extent of consumer borrowing across EU countries.

Anecdotal evidence seemed to suggest that some main factors behind over‐indebtedness could be “market failure” on the credit market, the existence of liquidity constraints and lack of access to formal credit markets. However, a comprehensive and rigorous investigation of the extent and determinants of over‐indebtedness can only be achieved through analysis of more extended household data sets, particularly panel data.

The EU credit markets exhibited certain symptoms of “market failure”, on the one hand, and there was also need for further financial liberalisation in the Southern European countries, on the other hand.

The paper provides a first systematic evaluation of existing measures of consumer over‐indebtedness as well as the first EU‐wide empirical investigation of the problem. It should provide valuable information to the credit industry as well as financial regulatory bodies.

The cycle of external indebtedness of dependent countries has become a huge constraint on any strategy for radical social change.

Argentina has recently entered a new process of debt overhang and renegotiation with the International Monetary Fund and private global creditors. The dominant debate around the country's foreign debt revolves around the conditions that can guarantee the sustainability of repayment. The underlying objective is to remain in the debt system that produces and reproduces dependency.

This chapter will seek to analyze the question of debt sustainability from another point of view: Is it possible to guarantee the (financial) sustainability of the debt at the same time as guaranteeing the sustainability of life? Our argument is that by remaining in the global debt system, Argentina creates conditions that violate the requirements for the sustainability of human and nonhuman life. Drawing on a discussion from Marxist dependency theory and the traditions of Marxist feminism and environmentalism, we will discuss how the debt sustainability argument presupposes the impossibility of reproducing life. In particular, we will show how the conditions required to guarantee debt sustainability in Argentina entail the deepening of the superexploitation of the “productive” and “reproductive” labor force, and the exacerbation of extractivism, putting social reproduction in crisis.

This chapter examines the impact of sectoral indebtedness on GDP in Czechia, initially a low-indebted small open economy in which debt dynamics are becoming a major concern. The impact of household debt, non-financial corporation debt and public debt is analysed with the use of local projections based on instrumental variable estimations. The results show a more pronounced influence of household debt compared to non-financial corporation and government debt. Initially, increasing household debt stimulates short-run economic activity, but in the medium run, it limits household consumption and negatively affects output. This negative impact gradually turns into a positive effect in the long run. Non-financial corporation debt has a negative short- to medium-run impact but can have a small positive effect in the long run due to the prevalence of tradable industries. Public debt initially has a short-run negative impact, but then gradually becomes positive. Overall, the findings have implications for macroeconomic policies and the importance of monitoring financial stability.

Microfinance institutions (MFIs) provide credit to low-income beneficiaries, enabling them to gain access to financial assistance. To ensure that clients are protected, all MFIs should adhere to basic corporate governance principles to guarantee uniform standards, transparency and good corporate governance practices in their institutions. Hence, the purpose of this paper is to explore the client protection practices and sustainable performance of Amanah Ikhtiar Malaysia (AIM), a leading MFI in Malaysia.

Closed-ended questionnaires were distributed to managers and assistant managers at 76 AIM branches across the peninsular Malaysia. A response rate of 68 per cent was achieved from the total questionnaires distributed.

The result shows that the level of client protection in AIM is high. It shows that accountability and debt collection process have a significant influence on the level of sustainable performance of AIM, whereas transparency and transaction costs have an insignificant impact on the level of sustainability of AIM. Consistent with the agency theory and institutional theory, the result also implies that having better debt collection process policy and structure, and accountability among management will enhance the level of sustainability of AIM.

Previous studies focused on the single issue of sustainability in microfinance, such as on repayment performance among the poorest people whom AIM served as clients. However, studies on the accountability towards clients are still underdeveloped by researchers. Hence, the current study fills the gap by examining whether client protection affects the sustainability of AIM.