Financing of SME's: an asset side story

The main sources of financing for small and medium sized enterprises (SMEs) are equity (internally generated cash), trade credit paid on time, long and short term bank credits, delayed payment on trade credit and other debt. The marginal costs of each financing instrument are driven by asymmetric information (cost of gathering and analysing information) and transactions costs associated with non-payment (costs of collecting and selling collateral). According to the Pecking Order Theory, firms will choose the cheapest source in terms of cost. In the case of the static trade-off theory, firms choose finance so that the marginal costs across financing sources are all equal, thus an additional Euro of financing is obtained from all the sources whereas under the Pecking Order Theory the source is determined by how far down the Pecking Order the firm is presently located. In this paper, we argue that both of these theories miss the point that the marginal costs are dependent of the use of the funds, and the asset side of the balance sheet primarily determines the financing source for an additional Euro. An empirical analysis on a unique dataset of Portuguese SME's confirms that the composition of the asset side of the balance sheet has an impact of the type of financing used and the Pecking Order Theory and the traditional Static Trade-off theory are rejected.

Annotation of Case C-353/92, Hellenic Republic v Council, ECR 1994 I-3411, and Case C-358/92, Hellenic Republic v Commission, ECR I-3507

Action for annulment - Council Regulation (EEC) Nº 1765/92 of 30 June 1992 establishing a support system for producers of certain arable crops - Commission Regulation (EEC) Nº 2294/92 of 31 July 1992 on detailed rules for the application of the support system for producers of the oil seeds referred to in Council Regulation (EEC) Nº 1765/92 - Obligation to observe a final date for sowing and for lodging an application for a compensatory payment

The Diffusion of Risks in Public Private Partnership Contracts

Purpose The UK government argues that the benefits of public private partnership (PPP) in delivering public infrastructure stem from: transferring risks to the private sector within a structure in which financiers put their own capital at risk; and, the performance based payment mechanism, reinforced by the due diligence requirements imposed by the lenders financing the projects (HM Treasury, 2010). Prior studies of risk in PPPs have investigated ‘what’ risks are allocated and to ‘whom’, that is to the public or the private sector. The purpose of this study is to examine ‘how’ and ‘why’ PPP risks are diffused by their financiers. Design/methodology/approach This study focuses on the financial structure of PPPs and on their financiers. Empirical evidence comes from interviews conducted with equity and debt financiers. Findings The findings show that the financial structure of the deals generates risk aversion in both debt and equity financiers and that the need to attract affordable finance leads to risk diffusion through a network of companies using various means that include contractual mitigation through insurance, performance support guarantees, interest rate swaps and inflation hedges. Because of the complexity this process generates, both procurers and suppliers need expensive expert advice. The risk aversion and diffusion and the consequent need for advice add cost to the projects impacting on the government’s economic argument for risk transfer. Limitations and implications The empirical work covers the private finance initiative (PFI) type of PPP arrangements and therefore the risk diffusion mechanisms may not be generalisable to other forms of PPP, especially those that do not involve the use of high leverage or private finance. Moreover, the scope of this research is limited to exploring the diffusion of risk in the private sector. Further research is needed on how risk is diffused in other settings and on the value for money implication of risk diffusion in PPP contracts. Originality/value The expectation inherent in PPP is that the private sector will better manage those risks allocated to it and because private capital is at risk, financiers will perform due diligence with the ultimate outcome that only viable projects will proceed. This paper presents empirical evidence that raises questions about these expectations. Key words: public private partnership, risk management, diffusion, private finance initiative, financiers

Creating a spontaneous conversational speech corpus

Speech recognition and language analysis of spontaneous speech arising in naturally spoken conversations are becoming the subject of much research. However, there is a shortage of spontaneous speech corpora that are freely available for academics. We therefore undertook the building of a natural conversation speech database, recording over 200 hours of conversations in English by over 600 local university students. With few exceptions, the students used their own cell phones from their own rooms or homes to speak to one another, and they were permitted to speak on any topic they chose. Although they knew that they were being recorded and that they would receive a small payment, their conversations in the corpus are probably very close to being natural and spontaneous. This paper describes a detailed case study of the problems we faced and the methods we used to make the recordings and control the collection of these social science data on a limited budget.

Smart meter devices and the effect of feedback on residential electricity consumption: Evidence from a natural experiment in Northern Ireland

Using a unique set of data and exploiting a large-scale natural experiment, we estimate the effect of real-time usage information on residential electricity consumption in Northern Ireland. Starting in April 2002, the utility replaced prepayment meters with advanced meters that allow the consumer to track usage in real-time. We rely on this event, account for the endogeneity of price and payment plan with consumption through a plan selection correction term, and find that the provision of information is associated with a decline in electricity consumption of 11-17%. We find that the reduction is robust to different specifications, selection-bias correction methods and subsamples of the original data. The advanced metering program delivers reasonably cost-effective reductions in carbon dioxide emissions, even under the most conservative usage reduction scenarios.

Irresponsible Lending?: A Case Study of a U.K. Credit Industry Reform Initiative

There are major concerns about the level of personal borrowing, particularly sourced from credit cards. This paper charts the progress of an initiative to create a Responsible Lending Index (RLI) for the credit industry. The RLI proposed to voluntarily benchmark lending standards and promote best practice within the credit industry by involving suppliers of credit, customer representatives and regulators. However, despite initial support from some banks, consumer bodies and the Chair of the Treasury Select Committee, it failed to gain sufficient support from financial institutions in its original format. The primary reasons for this were related to the complexity of building such a robust index and the banks trade body’s fear of exposing its members to public scrutiny. A revised alternative, the Responsible Lending Initiative, was proposed which took into account these concerns. However, the Association of Payment Clearing Service (APACS), the trade body of the credit industry, then effectively destroyed the proposal. This article describes an attempt to address the challenges in the credit card industry with the initiation of the RLI, reflected in stakeholder discourse and in the context of a wider concern expressed by the involved stakeholders in terms of the need for greater responsibility in the banking industry’s lending practices.

Nonresident Father Involvement with Children and Divorced Women's Likelihood of Remarriage

Although remarriage is a relatively common transition, little is known about how nonresident fathers affect divorced mothers’ entry into remarriage. Using the 1979–2010 rounds of the National Longitudinal Study of Youth 1979, the authors examined the likelihood of remarriage for divorced mothers (N = 882) by nonresident father contact with children and payment of child support. The findings suggest that maternal remarriage is positively associated with nonresident father contact but not related to receiving child support.

Nonresident Father Involvement with Children and Divorced Women's Likelihood of Remarriage

Although remarriage is a relatively common transition, we know little about how nonresident fathers affect divorced mothers’ entry into remarriage. Using the 1979-2010 rounds of the National Longitudinal Study of Youth 1979, we examined the likelihood of remarriage for divorced mothers (n=882) by nonresident father contact with children and payment of child support. The findings suggest that maternal remarriage is positively associated with nonresident father contact but not related to receiving child support.

'"These schemes will win for themselves the confidence of the people": Irish independence, poor law reform and hospital provision'

This article examines hospital provision in Ireland during the early twentieth century. It examines attempts by the newly independent Irish Free State to reform and de-stigmatise medical relief in former workhouse infirmaries. Such reforms were designed to move away from nineteenth century welfare regimes which were underpinned by principles of deterrence. The reform initiated in independent Ireland - the first attempted break-up of the New Poor Law in Great Britain or Ireland - was partly successful. Many of the newly named County and District Hospitals provided solely for medical cases and managed to dissociate such health care provision from the relief of poverty. However, some hospitals continued to act as multifunctional institutions and provided for various categories including the sick, the aged and infirm, 'unmarried mothers' and 'harmless lunatics'. Such institutions often remained associated with the relief of poverty. This article also examines patient fee-payment and outlines how fresh terms of entitlement and means-testing were established. Such developments were even more pronounced in voluntary hospitals where the majority of patients made a financial contribution to their treatment. The article argues that the ability to pay at times determined the type of provision, either voluntary or rate-aided, available to the sick. However, it concludes that the clinical condition of patients often determined whether they entered a more prestigious voluntary hospital or the former workhouse. Although this article concentrates on two Irish case studies, County Kerry and Cork City; it is conceptualised within wider developments with particular reference to the British context.

Construction Disputes in Small to Medium Enterprises in Ireland during Recession: Identification of Critical Factors

Purpose - To identify the critical factors causing construction disputes in Small to Medium Enterprises (SMEs) in Ireland during the recent recession period of 2007 to 2013.
Design/Methodology/Approach - A mixed method approach incorporating a literature review, case studies and questionnaire survey, with results analysed using exploratory (data reduction) factor analysis.
Findings - The results indicate seven core critical factors which result in construction disputes in SMEs in Ireland during a recession: Payment and extras; Physical work conditions; Poor financial/legal practise; Changes to the agreed scope of works; Time overrun; Defects; and Requests for increase in speed of project and long-term defects.
Research Limitations/Implications - With Ireland emerging from the current economic recession and the prevalence of SMEs to the construction sector, it is essential to document the core critical factors of construction disputes which emerge within this particular segment of the built environment.
Practical Implications - To address the adversarial nature of the construction sector and the prevalence of SMEs, it is essential to identify and document the critical factors of construction disputes within this remit. It is envisaged that the results of this research will be acknowledged, and the recommendations adopted, by construction SMEs, particularly within Ireland, as they emerge from the economic recession.
Originality/Value - This paper fulfils a gap in knowledge with the emergence of the economic recession and the identification of critical factors of construction dispute within SMEs in the Irish construction industry.

Sports Law

The term sports law is fourfold in nature and encompasses: (a) traditional areas of law, such as contract, tort, criminal, administrative and EU law, as applied to disputes of a sporting origin; (b) the particular impact that a range of statutory provisions might have on sport; for example, legislation governing discriminatory and unsafe practices in a workplace or monopolistic or fraudulent behaviour in an industry; (c) issues of public and social policy otherwise influencing the legislature and the courts, from the allocation of resources to the allocation of risk; and (d) lex sportiva, where that term is taken to reflect the various internal administrative regulations and awards by dispute-resolving mechanisms in sport. As a matter of practice, sports law tends to be concerned with the application of contract and commercial law principles to professional sport - and namely the application of such branches of law to disputes relating to the following "three pillars" of modern, professional sport i.e., disputes relating to the payment, sponsorship or endorsement of those who play sport for a living; disputes arising from decisions made by sports governing bodies; and disputes arising from the application of law to the holding of sports events.

Tooth replacement for partially dentate elders: a willingness-to-pay analysis

Objectives: The primary aim of this study was to investigate partially dentate elders’ willingness-to-pay (WTP) for two different tooth replacement strategies: using Removable Partial Dentures (RPDs) and, functionally orientated treatment (SDA). The secondary aim was to measure the same patient group’s WTP for dental implants. Methods: Patients who had completed a previous RCT comparing two tooth replacement strategies (RPDs and SDA) were recruited. 59 patients were asked to indicate their WTP for treatment to replace missing teeth in a number of hypothetical scenarios using the payment card method of contingency evaluation coupled to different costs. Data were collected on patients’ social class, longest held occupation, income levels and social circumstances. Results: The median age for the patient sample was 72.0 years (IQR: 71-75 years). Patients who had previously been provided with RPDs indicated that their WTP for this treatment strategy was significantly higher than those patients who had received SDA treatment (Mann-Whitney U Test: p<0.001). This group were also WTP a higher price for SDA treatment than those patients who had previously been treated according to this modality (Mann-Whitney U Test: p=0.005). The results indicated that patients’ age was not correlated with WTP but both social class and current income levels were significantly correlated (Spearman’s rank correlation: p<0.05). Patients in both treatment groups exhibited llittle WTP for dental implant treatment with a median price recorded which was lower than either RPD or SDA treatment. Conclusions: Amongst this patient cohort previous treatment experience had a strong influence on WTP as did social class and current income levels. The patients’ WTP indicated that they did not value dental implants over simpler forms of tooth replacement such as RPDs or a SDA approach.

The International Regulatory Regime on Capital Flows

Capital controls and exchange restrictions are used to restrict international capital flows during economic crises. This paper looks at the legal implications of these restrictions and explores the current international regulatory framework applicable to international capital movements and current payments. It shows how international capital flows suffer from the lack of a comprehensive and coherent regulatory framework that would harmonize the patchwork of
multilateral, regional, and bilateral treaties that currently regulate this issue. These treaties include the Articles of Agreement of the International Monetary Fund (IMF Articles), the General Agreement on Trade in Services (GATS), free-trade agreements, the European Union treaty, bilateral investment treaties, and the Organization for Economic Co-operation and Development (OECD) Code of Liberalization of Capital Movements (OECD Code of Capital Movement). Each
of these instruments regulate differently capital movements with little coordination with other areas of law. This situation sometimes leads to regulatory overlaps and conflict between different sources of law. Given the strong links between capital movements and trade in services, this paper pays particular attention to the rules of the GATS on capital flows and discusses the policy space available in the GATS for restricting capital flows in times of crisis.

Attitudes of physicians, patients, and village health workers toward glaucoma and diabetic retinopathy in rural China:A focus group study

Objective: To understand the knowledge and attitudes of rural Chinese physicians, patients, and village health workers (VHWs) toward diabetic eye disease and glaucoma. Methods: Focus groups for each of the 3 stakeholders were conducted in 3 counties (9 groups). The focus groups were recorded, transcribed, and coded using specialized software. Responses to questions about barriers to compliance and interventions to remove these barriers were also ranked and scored. Results: Among 22 physicians, 23 patients, and 25 VHWs, knowledge about diabetic eye disease was generally good, but physicians and patients understood glaucoma only as an acutely symptomatic disease of relatively low prevalence. Physicians did not favor routine pupillary dilation to detect asymptomatic disease, expressing concerns about workflow and danger and inconvenience to patients. Providers believed that cost was the main barrier to patient compliance, whereas patients ranked poorly trained physicians as more important. All 3 stakeholder groups ranked financial interventions to improve compliance (eg, direct payment, lotteries, and contracts) low and preferred patient education and telephone contact by nurses. All the groups somewhat doubted the ability of VHWs to screen for eye disease accurately, but patients were generally willing to pay for VHW screening. The VHWs were uncertain about the value of eye care training but might accept it if accompanied by equipment. They did not rank payment for screening services as important. Conclusions: Misconceptions about glaucoma's asymptomatic nature and an unwillingness to routinely examine asymptomatic patients must be addressed in training programs. Home contact by nurses and patient education may be the most appropriate interventions to improve compliance.

Willingness to pay for potential enhancements to a low-cost cataract surgical package in rural southern China.

PURPOSE: To assess determinants of patients' willingness to pay (WTP) for potential components of a multi-tiered cataract surgical package offered by a non-governmental organization (NGO) in rural China. DESIGN: Cross-sectional study. METHODS: Demographic and clinical data were collected from 505 patients presenting for cataract screening or surgery in Yangjiang, China. Willingness to pay for potential enhancements to the current surgery package was assessed using a bidding format with random payment cards. RESULTS: Among 426 subjects (84.4%) completing interviews, the mean age was 73.9 ± 7.3 years, 67.6% were women and 73% (n = 310) would pay for at least one offering, with 33-38% WTP for each item. Among those who would pay, the mean WTP for food was US$1.68 ± 0.13, transportation US$3.24 ± 0.25, senior surgeon US$50.0 ± 3.36 and US$89.4 ± 4.19 for an imported intra-ocular lens (IOL). The estimated total recovery from these enhancements under various assumptions would be US$20-50 (compared to the current programme price of US$65). In multivariate models, WTP for the senior surgeon increased with knowledge of a person previously operated for cataract (OR = 2.13, 95% CI 1.42-3.18, p < 0.001). Willingness to pay for the imported IOL increased with knowledge of a previously operated person (OR = 1.85, 95% CI 1.24-2.75, p < 0.01) and decreased with age >75 years (OR = 0.61, 0.40-0.93, p < 0.05). CONCLUSIONS: Opportunities exist to increase cataract programme revenues through multi-tiered offerings in this setting, allowing greater subsidization of low-income patients. Personal familiarity with cataract surgery is important in determining WTP. © 2011 The Authors. Acta Ophthalmologica © 2011 Acta Ophthalmologica Scandinavica Foundation.