Strategic Management During The Financial Crisis: How Firms Adjust Their Strategic Investments In Response To Credit Market Disruptions

2020 ◽  
Author(s):  
Caroline Flammer ◽  
Ioannis Ioannou
Keyword(s):  
Financial Crisis ◽  
Strategic Management ◽  
Credit Market ◽  
Strategic Investments

scholarly journals Financing Constraints and Access to Credit in a Postcrisis Environment: Evidence from New Farmers in Alabama

2012 ◽  
Vol 44 (4) ◽  
pp. 607-621 ◽  
Author(s):  
Valentina Hartarska ◽  
Dennis Nadolnyak
Keyword(s):  
Financial Crisis ◽  
Survey Data ◽  
Credit Market ◽  
Cash Flows ◽  
Financing Constraints ◽  
2008 Financial Crisis ◽  
Access To Credit ◽  
Self Selection ◽  
The 2008 Financial Crisis ◽  
New Farmers

We use survey data to study the degree to which new farming operations in Alabama were financially constrained after the 2008 financial crisis. Next, we control for farmers' self-selection out of the credit market and identify which farmers were able to secure loans during the period of 2009–2010. The results show that new farmers that started any part of their operation after 2005 were financially constrained but no evidence that their financing constraints were affected by the crisis. As expected, we find that lending was collateral-driven, although lenders also considered farmers' profitability and cash flows.

scholarly journals Revealing “Mafia Inc.”? Financial Crisis, Organized Crime, and the Birth of New Enterprises

2020 ◽  
pp. 1-45 ◽  
Author(s):  
Marco Le Moglie ◽  
Giuseppe Sorrenti
Keyword(s):  
Financial Crisis ◽  
Organized Crime ◽  
Credit Market ◽  
Subprime Mortgage ◽  
Mortgage Crisis ◽  
Judicial Authority ◽  
Subprime Mortgage Crisis

We study the investment of organized crime in the legal economy. By using the shock induced on the Italian credit market by the 2007 subprime mortgage crisis, we document how provinces with a high organized crime presence have been impacted less by the crisis in terms of the establishment of new enterprises than provinces with a lower criminal infiltration. We provide evidence that the lower impact of the crisis is consistent with the presence of investments by organized crime in the legal economy. We corroborate this interpretation by comparing our results with the characterization made by the judicial authority of such investments.

The Relevance of Market Variables in the CDS Spread Volatility: An Empirical Post-crisis Analysis

2018 ◽  
Vol 19 (6) ◽  
pp. 1462-1477
Author(s):  
Elisa Di Febo ◽  
Eliana Angelini
Keyword(s):  
Financial Crisis ◽  
Stock Exchange ◽  
Explanatory Power ◽  
Credit Default Swap ◽  
Credit Market ◽  
Total Period ◽  
Rating Agencies ◽  
The Usa ◽  
Market Variables ◽  
Different Characteristics

The purpose of this article is to examine the factors which define the changes of credit default swap (CDS) premiums, therefore, to analyse the indicator ability of CDS spreads on the credit market. The value of the ‘indicator’ of CDS spreads in the credit market has been recently highlighted due to the ‘failure’ of the rating agencies as an indicator to represent and ‘monitor’ the credit risk associate to an established reference entity. In detail, the empirical analysis is focused on a sample of 308 European corporates listed on the stock exchange holding five-year CDS spreads. The timeline considered is from 1 April 2005 to 31 March 2015, taking into account both the period pre- and post-financial crisis. Data has been elaborated from Bloomberg. The choice to analyse the European companies has been made to verify the behaviour of the determinants of CDS in a market that has very different characteristics compared to the USA (both structural and regulatory). In total period analysis, we find that both the firm variables and market variables are significant. In particularity, in post-financial crisis, only market variables are statistically significant and they have an explanatory power equal to 57 per cent.

scholarly journals Strategising for Resilience

2021 ◽  
Author(s):  
◽  
Simon Collins
Keyword(s):  
New Zealand ◽  
Financial Crisis ◽  
Strategic Management ◽  
Dynamic Capabilities ◽  
Global Financial Crisis ◽  
Manufacturing Sector ◽  
Current Theory ◽  
Study Approach ◽  
Management Concepts ◽  
The Global Financial Crisis

<p>The term “resilience” is used to describe aspects of businesses that are able to withstand potentially destructive changes in the commercial environment in which they operate. Few studies have investigated the ability that some firms have not just to endure disturbance, but to buck market trends and improve, grow and capitalise on potentially destructive change. This thesis aims to elaborate our existing understanding by contributing empirical knowledge on resilient firms through the examination of the research questions: In the context of the New Zealand Manufacturing sector during the Global Financial Crisis, what contributes to resilience in firms? And, do dynamic capabilities play a role in the resilience of firms?  To address the identified gap in the literature, this research analysed the strategies of seventeen New Zealand manufacturing firms during the Global Financial Crisis utilising a qualitative, case study approach. Teece’s (2007) Sensing, Seizing and Transformation dynamic capabilities framework was used to analyse and categorise the firms’ actions. The findings confirm some, but also refute other, pre-existing assumptions and understandings regarding the resilience of firms that are offered by the prevailing literature.  This thesis contributes to the field of theory by offering evidence for five propositions that extend the existing resilience literature. These are: first, that the dynamic capabilities framework provides a useful means through which to examine the resilience of firms; second, resilient firms appear to have bundles of dynamic capabilities that provide resilience when present; third, certain capabilities appear to be necessary but not sufficient to create resilience; fourth, capabilities that enable firms to generate additional efficiency and margin appear to be among the most valuable in the creation of resilience, and fifth, capabilities that increase the ‘volume’ of knowledge, and improve the flow of, and access to, knowledge within a firm also appear to be among the most valuable for creating resilience.  This examination of the concept of resilience presents new perspectives on why some firms perform better during crises, and how advantage is created and maintained when the environment generates barriers to performance. The results progress resilience as an emerging concept in the strategic management literature in two ways: first, the addition of empirical evidence extends and elaborates current theory regarding what constitutes resilient action in firms; and second, the results highlight the strengths and weaknesses of applying a dynamic capabilities framework to explore strategic management concepts.</p>

scholarly journals State presence in the credit market: state-owned banks and earmarked credit in the 2008 crisis

2021 ◽  
Author(s):  
Lucas A. B. de C. Barros ◽  
Catarina Karen dos Santos Silva ◽  
Raquel de Freitas Oliveira
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Corporate Control ◽  
Credit Market ◽  
Linear Regression Models ◽  
State Action ◽  
The Public ◽  
Wide Range ◽  
Market State ◽  
Pros And Cons

Abstract The objective of this study was to document the relationship between the two mechanisms of state action (credit earmarking and corporate control of banks) and the granting of bank credit in Brazil during the 2008 global financial crisis. There is an intense debate in the literature about the effectiveness of the State’s role in the financial system and its effects on the economy. One aspect of this issue is identifying whether the state presence contributes to stabilizing the granting of credit and softening financial crises’ economic impact. The studies carried out to date have not considered the differences between free and earmarked credits at the bank level, nor their possible interaction with the type of bank property. The study’s subject is relevant because it can help guide counter-cyclical public policies to face crises, including the use of changes in credit earmarking or state-owned banks’ performance. The analyses carried out can inform the debate about the pros and cons of the state’s presence in the credit market. The study analyses data from 2005 to 2012 from financial institutions that capture deposits from the public. Inferences are based on linear regression models, including a wide range of control variables. This study documents a significant reduction in credit granted by private banks in Brazil and state-owned banks’ expansion during the 2008 crisis. This evidence is not only due to differences in the funding rate during the period or to economic fundamentals, suggesting that the effect of corporate control is possibly related to the counter-cyclical performance of state-owned banks. The results show that the credit earmarking mechanisms were not particularly relevant in smoothing the contraction resulting from the financial crisis.

Strategising for Resilience

2021 ◽  
Author(s):  
◽  
Simon Collins
Keyword(s):  
New Zealand ◽  
Financial Crisis ◽  
Strategic Management ◽  
Dynamic Capabilities ◽  
Global Financial Crisis ◽  
Manufacturing Sector ◽  
Current Theory ◽  
Study Approach ◽  
Management Concepts ◽  
The Global Financial Crisis

<p>The term “resilience” is used to describe aspects of businesses that are able to withstand potentially destructive changes in the commercial environment in which they operate. Few studies have investigated the ability that some firms have not just to endure disturbance, but to buck market trends and improve, grow and capitalise on potentially destructive change. This thesis aims to elaborate our existing understanding by contributing empirical knowledge on resilient firms through the examination of the research questions: In the context of the New Zealand Manufacturing sector during the Global Financial Crisis, what contributes to resilience in firms? And, do dynamic capabilities play a role in the resilience of firms?  To address the identified gap in the literature, this research analysed the strategies of seventeen New Zealand manufacturing firms during the Global Financial Crisis utilising a qualitative, case study approach. Teece’s (2007) Sensing, Seizing and Transformation dynamic capabilities framework was used to analyse and categorise the firms’ actions. The findings confirm some, but also refute other, pre-existing assumptions and understandings regarding the resilience of firms that are offered by the prevailing literature.  This thesis contributes to the field of theory by offering evidence for five propositions that extend the existing resilience literature. These are: first, that the dynamic capabilities framework provides a useful means through which to examine the resilience of firms; second, resilient firms appear to have bundles of dynamic capabilities that provide resilience when present; third, certain capabilities appear to be necessary but not sufficient to create resilience; fourth, capabilities that enable firms to generate additional efficiency and margin appear to be among the most valuable in the creation of resilience, and fifth, capabilities that increase the ‘volume’ of knowledge, and improve the flow of, and access to, knowledge within a firm also appear to be among the most valuable for creating resilience.  This examination of the concept of resilience presents new perspectives on why some firms perform better during crises, and how advantage is created and maintained when the environment generates barriers to performance. The results progress resilience as an emerging concept in the strategic management literature in two ways: first, the addition of empirical evidence extends and elaborates current theory regarding what constitutes resilient action in firms; and second, the results highlight the strengths and weaknesses of applying a dynamic capabilities framework to explore strategic management concepts.</p>

Origins and expansion of mortgage crisis

Servis plus ◽  
2015 ◽  
Vol 9 (3) ◽  
pp. 52-58
Author(s):  
Мария Хлопунова ◽  
Mariya Khlopunova
Keyword(s):  
Risk Assessment ◽  
Financial Crisis ◽  
Credit Risk ◽  
Global Economy ◽  
Credit Market ◽  
Mortgage Crisis ◽  
Global Coverage ◽  
Assessment Problems

The article reviews origins and expansion of mortgage crisis. The latter financial crisis found out to be unique as to losses, scale of recession, global coverage. Although the crisis had financial origins it becomes truly crisis of the global economy. The paper covers the following reasons and origins of the crisis: risk assessment problems in banks, underestimation of credit risk, realty owner failed to pay mortgage payments, the regulator failed to sustain interbank credit market. The possibilities of the new mortgage crisis pointed out in the paper.

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