The economics of factoring accounts receivable

Article Abstract:

The credit value of a firm's account receivables and its probability of bankruptcy negatively affect its decision to factor. Companies with high levels of bankruptcy risk will sell only their highest credit quality and intermediate quality receivables, without and with recourse, respectively. Expecting the factor to anticipate a moral hazard problem and reflect this in the prices they offer when credit conditions are not transparent, sellers will not factor their lowest quality receivables. This debunks earlier arguments that factoring is done to minimize a firm's credit risk.

Business Factoring, Factoring (Finance), Credit management, Accounts receivable

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Intangible investment, debt financing and managerial incentives

Article Abstract:

A study on debt and allocation of resources on real and intangible assets revealed that debt does influence decisions regarding research and development (R&D) investments. The findings that companies with greater debt are more likely to invest less on R&D, while companies with lower debts would invest more on R&D specifically hold true in industries characterized by high R&D expenditures and low expenditures in industrial processes. It was further noted that the impact of investments on real assets could be best seen on equity cash flows.

Research and Development in the Physical, Engineering, and Life Sciences, Commercial physical research, Research & Development-Industry, Business Financing, Management Functions NEC, Research, Industrial research, Organizational change, Career development, Resource allocation

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A dynamic analysis of an economy with banking optimization and capital adequacy regulations

Article Abstract:

The impact of bank net worth and capital adequacy on the economy, particularly on productivity, is discussed.

Japan, Management dynamics, Bank Reserves, Management, Company business management, Capital formation

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