Bank Funding and Corporate Financial Policies during COVID-19 and FinTech Period

A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: closed (14 April 2023) | Viewed by 11548

Special Issue Editors


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Guest Editor
Department of Business Administration and Law, University of Calabria, Rende 87036, Italy
Interests: SMEs issues; entrepreneurship; capital structure; corporate diversification; internationalization; investment-cashflow sensitivity and financial constraint; local financial development; corporate governance; ownership structure and value creation

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Guest Editor
Department of Business Administration and Law, University of Calabria, Rende 87036, Italy
Interests: management; corporate and entrepreneurial finance; banking; FinTech; innovation and sustainability

Special Issue Information

Dear Colleagues,

The coronavirus pandemic represents an unprecedented shock to the world's economy, although the COVID-19 crisis drastically differs from the 2008-2010 global financial crisis and the 2011-2013 sovereign debt crisis. Indeed, many firms have had to significantly revise their business model due to the effects of the pandemic. Moreover, we are experiencing a disruptive change in the demand side of the product markets, with implications for financial markets and, thus, banks and credit institutes. This shift has had severe consequences on the financing of firms; therefore, resolving corporate financial policies is crucial to understand how entrepreneurs have reacted and adapted during this downturn period. The present Special Issue aims to stimulate discussion and present research on the emerging challenges and opportunities concerning financial decisions that companies are faced with in the era of COVID-19 and technological digitalisation in banking. Moreover, we are particularly interested in the role of banks and credit institutes in the downturn period and how the bank-firm relationship has evolved during this economic crisis and with the advent of FinTech. Papers covering theoretical and practical implications for banks and firms regarding their handling of the crisis and those focusing on future economic recovery perspectives are welcome in this Special Issue. 

Topics of interest include (but are not limited to):

  • Bank funding and capital structure;
  • The role of banks and credit institutes in supporting firms during the coronavirus downturn;
  • How firms have managed their capital structure, cash holdings, and trade credit decisions during the COVID-19 pandemic;
  • How the development of FinTech in banking influences the bank-firm relationship;
  • The effect of FinTech on financial decisions of new and existing firms in banking;
  • The influence of FinTech on corporate financial policies during the COVID-19 era;
  • How financial flexibility has supported firms during COVID-19 crisis;
  • How financially constrained firms have reacted to the COVID-19 crisis.

We invite authors to contribute original research articles focusing on both theory and practice. All submissions must be original unpublished work that is not being considered for publication elsewhere.

Dr. Maurizio La Rocca
Dr. Francesco Fasano
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. International Journal of Financial Studies is an international peer-reviewed open access quarterly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • bank funding
  • banking relationship
  • financial policies
  • capital structure
  • cash holdings
  • trade credit
  • COVID-19
  • FinTech
  • financial flexibility
  • financial constraints
  • corporate finance
  • entrepreneurial finance

Published Papers (5 papers)

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Research

16 pages, 324 KiB  
Article
How Local Finance and Enforcement Shaped SME Credit Choices before and during the COVID Crisis
by Francesco Fasano, Maurizio La Rocca, F. Javier Sánchez-Vidal, Maria Josephin Lio and Alfio Cariola
Int. J. Financial Stud. 2024, 12(1), 10; https://doi.org/10.3390/ijfs12010010 - 19 Jan 2024
Viewed by 1284
Abstract
Credit from suppliers is an important source of finance for firms. It can sustain firms’ financial flexibility even in periods of downturn. In this study, using a large database of 90,763 Italian firms in the 2015–2021 period, we investigated how local financial development [...] Read more.
Credit from suppliers is an important source of finance for firms. It can sustain firms’ financial flexibility even in periods of downturn. In this study, using a large database of 90,763 Italian firms in the 2015–2021 period, we investigated how local financial development affects the trade-credit policies of SMEs and how this effect is conditioned by the degree of judicial enforcement. Given that trade credit can be a substitute for bank financing, we find that firms make more use of trade credit in developed financial markets. Moreover, we highlight the finding that a higher degree of judicial enforcement, which reinforces the role of contracts in the market, amplifies this effect. Finally, we observe that the COVID-19 crisis has reduced both the positive effect of local financial development and the positive moderating effect of enforcement in the use of trade credit. Full article
21 pages, 1984 KiB  
Article
An Empirical Analysis of the Dynamics Influencing Bank Capital Structure in Africa
by Ayodeji Michael Obadire, Vusani Moyo and Ntungufhadzeni Freddy Munzhelele
Int. J. Financial Stud. 2023, 11(4), 127; https://doi.org/10.3390/ijfs11040127 - 01 Nov 2023
Viewed by 1519
Abstract
Financial institutions, particularly banks, have long grappled with the dilemma of structuring their capital optimally. This process, commonly referred to as capital structure decision-making, is of paramount importance, especially within the financial services sector, where strict regulations are imposed by reserve and central [...] Read more.
Financial institutions, particularly banks, have long grappled with the dilemma of structuring their capital optimally. This process, commonly referred to as capital structure decision-making, is of paramount importance, especially within the financial services sector, where strict regulations are imposed by reserve and central banks in alignment with global Basel guidelines. This study unveils the key factors that determine the capital structure choices of African banks, using panel data encompassing 45 listed banks across six nations that had embraced the Basel III Accord spanning the years 2010 to 2019. The study used the system-generalised moment methods (sys-GMM) estimator to fit the formulated panel data regression model. The study findings showed positive associations between ZSCORE, an indicator of bank financial stability, and net interest margin ratio (NIMR) with bank leverage (TCTE). In addition, the results revealed positive correlations between earnings volatility (EV), profitability (P), and risk (R) with bank leverage (TDCE). This suggests that profitable banks are inclined to favour debt financing, a phenomenon driven by their ability to comfortably service debt obligations with free cash flows. This study’s overarching conclusion underscores the dominant influence of the Liquidity Coverage Ratio (LCR) on African bank capital structures. Whether assessing traditional or Basel III-prescribed measures of bank leverage, LCR consistently emerged as the primary determinant. This finding is of significant relevance to bank executives and regulators, offering them essential insights for informed decision-making by considering striking a balance between equity and debt financing based on financial stability, profitability, and risk profiles. Full article
19 pages, 2921 KiB  
Article
The Effect of Financial Policies Implemented during COVID-19 on Bank Credit in the Central American Region
by Daniel Ventosa-Santaulària, Arnoldo Marmolejo and Luis Alvarado
Int. J. Financial Stud. 2023, 11(2), 68; https://doi.org/10.3390/ijfs11020068 - 16 May 2023
Cited by 1 | Viewed by 1574
Abstract
As a result of the COVID-19 pandemic, governments and central banks worldwide implemented a wide range of policies to support households and businesses, among them a series of measures to support the availability of credit. This paper quantitatively assesses how monetary and regulatory [...] Read more.
As a result of the COVID-19 pandemic, governments and central banks worldwide implemented a wide range of policies to support households and businesses, among them a series of measures to support the availability of credit. This paper quantitatively assesses how monetary and regulatory policy measures helped lessen the effect of the economic downturn on bank credit to the private sector, and on non-performing loans, and focuses on small EMEs, which have been the subject of little analysis in this regard. Specifically, it looks at a number of countries in the Central American region. The resulting estimates show that the policies implemented substantially reduced the negative impact of the crisis on bank credit and nonperforming loans, and that the measures largely responsible for this mitigation were regulatory rather than monetary. Full article
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25 pages, 2121 KiB  
Article
Behavior of Banks’ Stock Market Prices during Long-Term Crises
by Nursel Selver Ruzgar and Clare Chua-Chow
Int. J. Financial Stud. 2023, 11(1), 31; https://doi.org/10.3390/ijfs11010031 - 06 Feb 2023
Cited by 2 | Viewed by 2660
Abstract
Countries are drastically impacted by financial and fiscal crises. Financial crises have the worst impact on not only society, but also the economy. The Canadian economy underwent financial crises and recessions several times during the last century. In this paper, daily closing stock [...] Read more.
Countries are drastically impacted by financial and fiscal crises. Financial crises have the worst impact on not only society, but also the economy. The Canadian economy underwent financial crises and recessions several times during the last century. In this paper, daily closing stock prices of five large Canadian banks were studied during the last five crisis periods. It is aimed to determine the most effective or dominant index prices on the daily closing stock price of the banks during the crisis periods. The five periods were selected from secondary data from January 1975 to December 2020 by using the graphs and the crises in the literature. Multiple linear regression was performed to analyze the impact of price indexes during crisis periods. Findings show that “price index—financials” had a positive impact on the daily closing price of banks during the last five economic crises in Canada. Since the banks have different investment tools in their portfolio, the impacts of price indexes on the daily closing prices depend on these portfolios, which ultimately could have led to the economic crises. Full article
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13 pages, 857 KiB  
Article
The Global Pandemic, Laboratory of the Cashless Economy?
by Jeremy Srouji and Dominique Torre
Int. J. Financial Stud. 2022, 10(4), 109; https://doi.org/10.3390/ijfs10040109 - 26 Nov 2022
Cited by 3 | Viewed by 3619
Abstract
The COVID-19 pandemic has had a profound impact on payment systems and preferences around the world, reducing the use of cash in favor of digital payment instruments and accelerating the discussion around the need for a central bank digital currency. This article presents [...] Read more.
The COVID-19 pandemic has had a profound impact on payment systems and preferences around the world, reducing the use of cash in favor of digital payment instruments and accelerating the discussion around the need for a central bank digital currency. This article presents the digital payments and cashless agenda before and after the pandemic, focusing on how the changing payments landscape has influenced the priorities and decisions of regulators, banks and other financial intermediaries, with regards to the future shape of payment systems. It finds that while the pandemic demonstrated the benefits associated with building an advanced, competitive and integrated digital payments eco-system, it has also brought to the forefront more fragmentation than convergence between payment systems in different regions of the world. Full article
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