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  1. Subsidized labour and firms
    investment, profitability, and leverage
    Author: Marcelin, Isaac; Brink, Daniel; Fadiran, David Oluwatosin; Amusa, Hammed Adedeji
    Published: June 2019
    Publisher:  United Nations University World Institute for Development Economics Research, Helsinki, Finland

    Employing the difference-in-differences technique, this study examines the impact of the Employment Tax Incentive programme on a large sample of South African firms from 2011 to 2016. It finds that programme firms expanded investments by 4.8 per... more

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    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 248
    Inter-library loan:
    No inter-library loan

     

    Employing the difference-in-differences technique, this study examines the impact of the Employment Tax Incentive programme on a large sample of South African firms from 2011 to 2016. It finds that programme firms expanded investments by 4.8 per cent, and profits by 5.7 per cent. Consistent with the financial constraints theory, leverage rose by 6.63 per cent at smaller ETI firms, which are plagued with information asymmetry problems. Results imply both cost and liquidity mechanisms whereby the policy defrayed labour costs to boost profits and cash flows. Triple difference-in-difference estimates reveal that the policy had stronger effects at financially constrained firms. With important implications for labour markets and fiscal policies, the results suggest that well-designed youth wage subsidy policy schemes have the potential to enhance the prospects both of firms and of the economy more broadly.

     
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    Source: Union catalogues
    Language: English
    Media type: Ebook
    Format: Online
    ISBN: 9789292566845
    Other identifier:
    hdl: 10419/211280
    Series: WIDER working paper ; 2019, 50
    Scope: 1 Online-Ressource (circa 29 Seiten)
  2. Firms' resilience to financial constraints
    the role of trade credit
    Author: Marcelin, Isaac; Brink, Daniel; Sun, Wei
    Published: May 2021
    Publisher:  United Nations University World Institute for Development Economics Research, Helsinki, Finland

    We study the role of trade credit in enhancing the resilience of financially constrained firms from 2010 to 2017. Implicit borrowing in trade finance allows financially constrained firms to bridge the financing gap, expand employment by 8.26 per... more

    Access:
    Verlag (kostenfrei)
    Resolving-System (kostenfrei)
    Resolving-System (kostenfrei)

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 248
    Inter-library loan:
    No inter-library loan

     

    We study the role of trade credit in enhancing the resilience of financially constrained firms from 2010 to 2017. Implicit borrowing in trade finance allows financially constrained firms to bridge the financing gap, expand employment by 8.26 per cent, and increase average firm profits significantly. Trade finance suppliers, not financially constrained firms, experience a surge of 7.99 per cent in the average rate of sales growth. Corporate resilience to financial constraints occasioned by trade credit is quite robust to controlling for relevant factors and employing various estimation techniques. While countries strive to develop their financial sector to fund economic activity and growth, they need to facilitate a business environment that promotes trade credit flows among firms as a second-best alternative to bank financing.

     
    Export to reference management software   RIS file
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    Source: Union catalogues
    Language: English
    Media type: Ebook
    Format: Online
    ISBN: 9789292670160
    Other identifier:
    hdl: 10419/243404
    Series: WIDER working paper ; 2021, 78
    Subjects: financial constraints; trade credit; employment; firm profits; sales growth
    Scope: 1 Online-Ressource (circa 37 Seiten), Illustrationen