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In this study, we examine how public and private debt buildup is related to currency depreciation pressure. Our empirical analysis of a panel dataset of 59 advanced and emerging markets reveals that both private and public debt exacerbate currency vulnerability. However, the evidence of a significant effect on currency depreciation pressure is more robust and consistent for private debt than public debt. Furthermore, we find that excessive private debt buildup can be particularly harmful in emerging markets. In addition, our evidence suggests that greater dependence on external financing exacerbates the impact of debt buildup on currency stress. Overall, the evidence highlights the importance of a comprehensive debt surveillance framework which monitors both public and private debt buildup, especially in emerging markets.

The public’s financial security is vital to economic stability, with policy and practice efforts focused on developing financial literacy to reduce financial vulnerability. However, this approach fails to fully consider the emotional factors that influence the financial decision-making process. This study examines how emotions shape these decisions, drawing on the concept of ‘muddling through’ to understand the complex process to be navigated. Data are drawn from 78 in-depth interviews with consumers who were financially ‘struggling and squeezed’. ‘Integral’ and ‘incidental’ emotions were influential both in assisting the decision-making process and in introducing biases that could lead to harm. Consumers were able to rationalize their decisions, even though they might not be economically optimal in the longer term. Muddling through theory is extended by explaining the role of emotions within it. New insights into the interaction between emotions that are ‘integral’ or ‘incidental’ to decision-making lead to policy and practice recommendations.

Budgeting is a valuable anticipatory tool, able to support technically efficient production, manage financial vulnerability, and increase financial resilience. However, inaccuracies in the budgetin...

The financial well-being of the charity sector has important social implications. Numerous studies have analysed whether the concentration of income in a few sources increases financial vulnerability. However, few studies have systematically considered whether the type of income (grants, donation, fund-raising activities) affects the survival prospects of the charity. We extend the literature by (a) explicitly modelling the composition of sources of income, (b) allowing for short-term volatility as well as long-term survival and (c) testing alternative specifications in a nested form. We show that the usual association between income concentration per se and financial vulnerability is a specification error. Greater vulnerability is associated with dependence on grant funding, not overall concentration. Previous studies showing that concentration of income per se is problematic are picking up a proxy effect. We also show that the volatility of income streams may be an important factor in the survival of charities, but that this also varies between income sources.

The development of globalization creates a need for diagnosis of financial stability at the global level. This study aims to analyze the financial stability of the global banking system and identify threats to stability at the level of geographic regions and countries. The study uses the methods of a structured system, comparative and cluster analysis. The empirical study is based on World Bank data for 126 countries for the period 1998–2017. One of the key results of the study is the development of quantitative indicators of the financial stability of the world banking system. These indicators differ from the existing ones due to the predictive nature of the former. The study also proposes criteria of qualitative assessment of the level of financial stability of the world banking system and its individual elements in the form of regional and national banking systems. In addition, appropriate algorithms were developed to calculate the proposed indicators and criteria. The results helped to form clusters of countries in terms of the level of their banking system stability, compile maps of financial stability risks at the global level, and identify countries that are sources of potential threats to financial stability. The empirical part of the study confirms the practical applicability of the proposed analytical tools. The study shows that in 2017, the banking system of Asian countries moved to the high-risk zone. Potential threats to the financial stability of the global banking system come from the European and Asian banking systems, as well as from the Australian banking system. AcknowledgmentThe study was funded by the RFBR according to the research project No 18 010 00232 “A methodology of multilevel system of diagnostics and regulation of financial stability” year 2018–2020.

There is a growing emphasis on the possibility that climate-related financial risks – such as an abrupt transition to a low-carbon economy – might increase the financial vulnerability of borrowers ...

This study attempts to develop a financial vulnerability indicator serving as a composite indicator for the state of financial vulnerability. The indicator was constructed from 10 variables of macroeconomic, financial and property market by extracting a common vulnerability component through the dynamic approximate factor model. On the feedback and amplification effects, the outcome revealed that financial vulnerability shock catalysed significant negative effects on economic activity in a high-vulnerability regime, while the impact was negligible in periods of low vulnerability. This study highlighted the usefulness of composite indicators as an early warning mechanism to gauge vulnerabilities in the Malaysian financial system.

Do financial crises have an impact on trade flows via a shock to corporate risk or to bank risk? Focusing on Italy’s exports during a period characterized by both the global financial crisis and by the sovereign debt crisis, we exploit the prediction of standard trade models according to which financial shocks should be magnified by the time needed to ship a good to the importer’s country and by sector-level financial vulnerability. We also use bank-pair data on Italian banks’ assets and liabilities vis-a-vis their foreign bank counterparts in a specific country to construct proxies for the availability of trade finance in a given market. We find evidence of a negative impact of financial shocks on exports, especially to more distant countries and in more financially vulnerable sectors. The main channels seem to be related to an increase in corporate risk (reflecting shocks to bank finance and to buyer-supplier trade credit), while the ‘contagion effect’ of shocks stemming from bank risk seems to be much less significant.

The aim of this paper is to introduce a new method to measure Financial Vulnerability Index (FVI) based on OECD financial literacy survey, and to analyse the 2018 OECD survey data along FVI. The sample used in the article is representative for Hungary (sample size: 1,001). Our analysis sharply points out that although the growth of income reduces financial vulnerability, the higher disposable amount does not increase financial awareness. One of the key findings of the research is the identification of the correlations between financial attitudes and financial vulnerability. Our analysis shows that the difficulty of prolonging current desires is a significant factor underlying the development of financial vulnerability. Financially vulnerable population groups not only often struggle to make ends meet, but they also have difficulty controlling spending money.

We analyze older individuals’ debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, in the HRS we examine three different cohorts (individuals age 56–61) in 1992, 2004, and 2010 to evaluate cross-cohort changes in debt over time. We also use two waves of the NFCS (2012 and 2015) to gain additional insights into debt management and older individuals’ capacity to shield themselves against shocks. We show that recent cohorts have taken on more debt and face more financial insecurity, mostly due to having purchased more expensive homes with smaller down payments.

The increasingly common online credit card repayment formats typically involve consumers’ active choice from among various payment amounts. Consumers rarely view minimum payment warning (MPW) disclosures while repaying online; therefore, the common shift toward online repayment means that the MPW is not salient for most credit cardholders. This article aims to shed light on credit cardholders’ payment decisions under this “active choice format” and explore effective online interfaces for payment decisions. Drawing on research in active choice, the authors demonstrate in three experiments that, compared with the “open format” used in traditional monthly statements, active choice format increases consumers’ full balance payment propensity and overall repayment amount, and this effect is even stronger when current account balance is included in the choice context. Furthermore, presence of the MPW disclosure significantly decreases payment of the minimum required amount and increases payment of the “three-year payoff amount.” Finally, presence of MPW increased consumer feelings about making the right decision, primarily for financially vulnerable people. These findings, based on hypothetical scenario choices, offer interesting theoretical and important policy implications.

Significant limitations and rapid declines in financial capacity are a hallmark of patients with early-stage Alzheimer's disease (AD). We use linked Health and Retirement Study and Medicare claims data spanning 1992-2014 to examine the effect of early-stage AD, from the start of first symptoms to diagnosis, on household financial outcomes. We estimate household fixed-effects models and examine continuous measures of liquid assets and net wealth, as well as dichotomous indicators for a large change in either outcome. We find robust evidence that early-stage AD places households at significant risk for large adverse changes in liquid assets. Further, we find some, but more limited, evidence that early-stage AD reduces net wealth. Our findings are consequential because financial vulnerability during the disease's early-stage impacts the ability of afflicted individuals and their families to pay for care in the disease's later stage. Additionally, the findings speak to the value that earlier diagnosis may provide by helping avert adverse financial outcomes that occur before the disease is currently diagnosable with available tools. These results also point to a potentially important role for financial institutions in helping reduce exposure of vulnerable elderly to poor outcomes.

We examine how charity financial information related to efficiency and financial vulnerability is used by private foundations in determining how much they grant to charities during capital campaigns. In general, private foundations are likely to be better able to evaluate charity financial information because they are sophisticated donors. They have the incentive to incur search costs, the ability to judge financial information, and are focused on grant-making. We find no evidence that efficiency measures are used by private foundations in determining capital campaign grant amounts, regardless of foundation sophistication. We interpret this result as being consistent with private foundations focusing on factors related to program accomplishments rather than on reported efficiency. We find evidence that private foundations pay larger grant amounts to less financially vulnerable charities. This effect is concentrated when grants are paid by more sophisticated private foundations (i.e., those that employ a professional staff). Data Availability: Data are available from the public sources cited in the text.

Using a large dataset of listed firms in Korea, we test whether volatility of capital structure affects stock returns in a systematic way. Stock returns of high capital-structure-volatility firms belonging to different size groups move together over time, suggesting the existence of a capital-structure-volatility factor. This factor earns a sizable, negative risk-premium of −1.08% on a monthly basis over the sample period spanning 2004–2017, and the factor return is adversely affected by deteriorating financial market conditions. Moreover, the cross-sectional relation between capital structure volatility and stock returns is also negative. Overall results indicate that the capital structure volatility may represent another pricing puzzle in stock markets.

Patients with metastatic or advanced cancer are likely to be particularly susceptible to financial hardship for reasons related both to the characteristics of metastatic disease and to the characteristics of the population living with metastatic disease. First, metastatic cancer is a resource-intensive condition with expensive treatment and consistent, high-intensity monitoring. Second, patients diagnosed with metastatic disease are disproportionately uninsured and low income and from racial or ethnic minority groups. These vulnerable subpopulations have higher cancer related financial burden even in earlier stages of illness, potentially resulting from fewer asset reserves, nonexisting or less generous health insurance benefits, and employment in jobs with less flexibility and fewer employment protections. This combination of high financial need and high financial vulnerability makes those with advanced cancer an important population for additional study. In this article, we summarize why financial toxicity is burdensome for patients with advanced disease; review prior work in the metastatic or advanced settings specifically; and close with implications and recommendations for research, practice, and policy.

We demonstrate theoretically and empirically that financial development of the destination country is as important as that of the origin country in shaping bilateral trade patterns, on both the extensive margin and the intensive margin of international trade.

This study explores, for the first time, how financial vulnerability affects incomeinequality across OECD countries, from 1990 to 2015. The empirics use a new financialvulnerability index constructed by Adrian and Duarte (2016). Through the methodologyof their modeling approach, panel GARCH and GMM methods, the findings indicatethat financial vulnerability exerts a negative impact on income equality conditions.The results survive certain definitions of income inequality and corruption, whilethey highlight the importance of financial stability conditions, with potential furtherrepercussions to the real economy.

Resumen: El objetivo de este estudio es cuantificar la vulnerabilidad externa de la economía colombiana para el lapso 1990-2015. Para alcanzar este propósito, se calcularon dos indicadores, tomando como referencia la propuesta de Abeles y Valdecantos (2016). A partir de los resultados encontrados, se evidenció que, durante el transcurso del periodo estudiado, la economía colombiana, durante el transcurso del periodo estudiado, incrementó tanto su vulnerabilidad real como la financiera. Frente a este hallazgo, se argumentó que la mayor vulnerabilidad externa de este país se explica por dos razones: a) la incapacidad de esta economía para modificar su modelo de inserción comercial basado en la explotación de los recursos naturales y b) el incremento de la dependencia del financiamiento externo. Clasificación JEL: F40, O10, O54, O13. Abstract: The objective of this study is to quantify the external vulnerability of the Colombian economy from 1990 to 2015. To achieve this purpose, two indicators were calculated, taking the proposal of Abeles and Valdecantos (2016) as reference. The results proved that the Colombian economy, during the period studied, increased its real and financial vulnerability. Facing this finding, the argument is made that the country’s greatest external vulnerability is explained for two reasons: (a) the inability of this economy to modify her model of commercial insertion based on the exploitation of natural resources and (b) the increase in dependence of the external financing. Clasificación JEL: F40, O10, O54, O13. Résumé: Cette étude a pour but de quantifier la vulnérabilité externe de l’économie colombienne pour la période 1990-2015. Pour atteindre cet objectif, deux indicateurs ont été calculés, en prenant comme référence la proposition d’Abeles et Valdecantos (2016). Les résultats obtenus ont montré que, au cours de la période étudiée, l’économie colombienne a augmenté sa vulnérabilité réelle et financière. Au vu de ce constat, il a été avancé que la plus grande vulnérabilité extérieure de ce pays s’explique par deux raisons: a) l’incapacité de cette économie à modifier son modèle d’insertion commerciale basé sur l’exploitation des ressources naturelles et b) l’augmentation de la dépendance à l’égard des financements extérieurs. Clasificación JEL: F40, O10, O54, O13.

Objectives: Objectives: Lichtenberg, Campbell, Hall, and Gross used a contextual framework for financial decision-making to create and provide evidence for a new scale to assess risk for financial exploitation, the Financial Exploitation Vulnerability Scale (FEVS). This study examined the criterion validity of self-reported memory complaints and living alone on FEVS risk scores.Methods: Participants were the first 258 individuals reporting as 60 years or older and who completed the FEVS on the https://olderadultnestegg.com website between December 2020 and February 2021. Correlations, multiple regression, analysis of variance, and chi-square analyses were conducted to compare groups based on risk scores.Results: FEVS risk scores were significantly correlated with years of education, self-reported memory complaints, and living alone; 18% of unique variance was accounted for by these measures in a regression analysis. The ANOVA indicated that while there was an interaction effect for memory complaints by living alone, the majority of variance accounted for was attributed to the self-reported memory complaints measure. Conclusions: Older adults with memory complaints are in need of perceived financial vulnerability assessment.Clinical Implications: The Financial Exploitation Vulnerability Scale is a valuable self-report tool that clinical gerontologists can use in their intake assessments and follow-ups.

External debt and reserves affect the financial vulnerability of a nation through their effect on the capacity of the government to meet international obligations. The paper examines the reserve adequacy of Turkey by employing the traditional approach relating to comparing international reserves with short-term debt used by International Monetary Fund for the period of 2011:Q3–2018:Q4. In the analysis, the data obtained from the Central Bank of the Republic of Turkey Electronic Data Delivery System is utilized. Our findings do not support the evidence of reserve adequacy in the relevant period.

This article explores how and to what extent revenue diversification and concentration strategies affect financial performance, particularly financial capacity and vulnerability, in nonprofit organizations. Using a sample collected from a systematic literature search of all major databases, we first conducted a bibliometric analysis of 86 existing studies to visualize the clusters of major topics in this area and to explore the connections between existing studies. We then employed a meta-analysis to quantitatively synthesize 258 effect sizes from 23 existing empirical studies. We found that diversification had little effect on financial vulnerability, but it had a slightly negative effect on financial capacity. The article finally uses a meta-regression to discuss some of the theoretical and practical reasons why there is inconsistency in the results across existing studies and calls for more discussion of the assumptions and effectiveness of revenue diversification among nonprofit scholars and practitioners.

The level of Malaysian household debt remains high, currently among the highest in Asia, raising concerns about its sustainability. This article analyzes the prevalence of financial vulnerability, ...

This essay explores the potential for social workers and other human services professionals to build the financial capability of vulnerable populations. These professionals routinely work with the financially vulnerable and are uniquely positioned to provide basic financial guidance and support. Their education in human development, family dynamics, organizational and community functioning, and social policy prepares them to be key partners in creating solutions to financial vulnerability. However, human service professionals need additional training. Although there has been significant progress in developing curricula, additional resources, such as assessment models and practice tools for serving specific populations, would facilitate financial practice. Academic degree programs and continuing education in financial capability must be developed, along with greater clarification about career pathways and credentialing. Building the financial capability of vulnerable families is an ambitious agenda, but one that is essential to well‐being in the 21st century.

This paper identifies the vulnerability of household in Indonesia using both Balance Sheet and Financial Margin Approaches with coping strategy analysis in response to financial pressure. The result concluded that the household sector is solvent and sound with high interconnectivity with the non-financial corporation, particularly with banks. The heatmap coping strategies are in the moderate zone. However, it cumulatively tends to change to a high and extreme zone which potentially creates imbalances in the financial system in Indonesia.

Capital control policies have consequences on economic growth and international trade. Using data on 99 countries from 1995–2014, we find evidence that the effect of capital controls on trade vary across industries that have differing levels of external financing and asset tangibility. For exporter countries that tighten capital controls, industries that rely more heavily on external financing experience a larger decline in exports, while industries that possess more tangible assets experience a smaller decline in exports. For importer countries, tighter capital controls imply a decrease in trade, and this effect is uniform across all industries. The pattern with respect to external financing persists after accounting for availability of domestic credit and the differences in industry shares, and are predominantly found in countries with low levels of financial development. On the other hand, the varying effect related to asset tangibility is mostly absorbed by domestic credit market.

A country may adopt policy measures such as raising its foreign exchange reserves to better prepare for sudden reversal of international capital flows or currency attacks, which in principle should reduce financial vulnerability for its firms and the entire economy, but the beneficial effect of such policies may be partially offset by endogenous firms' decisions to take on more risks. We present a robust but previously undocumented relationship between corporate leverage and country-level foreign exchange reserve holdings. For 6610 non-financial firms in 23 emerging markets from 2000 to 2006, we show that more foreign reserve accumulation leads to higher corporate leverage. The effect is significantly greater in sectors that are intrinsically more sensitive to uncertainty. We go from correlation to causality via a two-prong instrumental variable strategy: simultaneously (1) instrumenting FX reserves by global commodity price movement, and (2) examining leverage of firms outside the commodity-sensitive sectors.

Non-profit organizations (NPOs) play an important role in society. Nowadays, many companies apply the phenomenon—corporate social responsibility (CSR) which supports sustainable development and cooperation between the for-profit and non-profit sector. These companies are careful to cooperate with organizations and make decisions based on many factors, such as financial stability and independence of non-profit organizations. These attributes are assessed by predictive models. The models are a common tool in the for-profit sector compared to the non-profit sector. In our case, the main aim of the research is to propose a prediction model to estimate financial status of Slovak non-profit organizations using discriminant analysis. The overall sample consists of 351 NPOs dividing into training and testing sub-samples. We find that model classifies correctly almost 91% of NPOs in the training sample, respectively less than 80% in the testing sample. However, the results show that all vulnerable NPOs are correctly classified based on the testing sample.

In this paper, we examine the Federal Reserve’s newest policy tool, known as the overnight reverse repo (ONRRP) facility, to understand its effects on the repo market. Using exogenous variation in the parameters of the ONRRP, we show that private repo activity is crowded out when money funds invest in the ONRRP. Additionally, we find that the ONRRP increases lenders’ bargaining power, thereby raising borrower funding costs. Lastly, we show that repo borrowers reallocate to repo backed by riskier collateral and borrow more from ONRRP-ineligible asset managers, both of which could increase financial vulnerability due to instability in dealer funding. Received April 27, 2017; editorial decision October 19, 2017 by Editor Stijn Van Nieuwerburgh.

The paper investigates whether patent fees are an effective mechanism to deter the filing of low-quality patent applications. The study analyzes the effect of the Patent Law Amendment Act of 1982, which resulted in a fivefold increase in patenting costs at the U.S. Patent and Trademark Office (USPTO), on various indicators of patent quality. Using a series of difference-in-differences regressions, I find evidence that the increase in fees was associated with an increase in patent quality. The effect is strongest for companies with a small patent portfolio. The study has strong policy implications in the current context of concerns about declines in patent quality and the financial vulnerability of the USPTO.

Not-for-profit (NFP) organisations experience a tension between societal perceptions about maximising mission expenditure on one hand, and their need to accumulate reserves to ensure longer term financial sustainability on the other. While studies have examined the level of reserves in UK and US contexts, there is little Australian research or guidance about what constitutes an appropriate level of NFP reserves. This paper examines the levels and implications of the reserves of 52 Australian NFP non-governmental organisations (NGOs) over eight years, identifying two groups. Spenders, with less than three months of expenditure in reserve, were more financially vulnerable, had higher levels of debt, yet spent a relatively greater proportion of their revenue on mission-related activities than savers. Savers, with more than three months’ reserves, demonstrated a greater proportion of revenue from fundraising, proportionately greater equity levels, and higher returns on assets. Providing unique insights into the financial reserves of Australian NGOs, this empirical study contributes to existing NFP literature on reserves, which to date has focused primarily on US and UK contexts. Further, we propose that by developing, monitoring and communicating their reserves’ strategies, NFP boards and managers will be able to improve their organisations’ financial sustainability and manage societal perceptions about reserves.

Financial inclusion has become a policy priority. For many countries, this has meant focusing on the delivery and practical aspects of financial products and services. This paper argues that this approach is not sufficient to improve financial wellbeing more broadly. It suggests a more comprehensive approach moving away from asking whether people are excluded or not to asking whether they have access to accessible, acceptable and appropriate resources and supports in adverse financial circumstances. A better understanding of individuals’ financial resilience: how they bounce back from adverse financial events and the resources and supports they draw on; could help determine where resources can and should be invested to assist people to cope with financial adversity, assist the development of effective policy and, ultimately, improve financial wellbeing. This paper puts forward a definition of financial resilience and a methodology for measuring it. Australia is used as a case country from which to draw conclusions using a survey of 1496 representative adults (18+). The findings indicate that over 2 million Australian adults experienced severe or high levels of financial vulnerability raising very real concerns about financial wellbeing. Implications for academics and policy makers are presented.

We analyse empirically the relationship between financial imperfections and firms’ innovative activities over the business cycle, using an Italian firm-level dataset based on survey data on innovation and balance sheet information over the period 2004–10. We explore how innovative investment decisions changed prior to and after the credit crunch of 2008, also focusing on the effect of firm’ financial vulnerability measured by the Whited and Wu (2006) index (WW index). Results show that the link between innovative expenditure patterns and the business cycle is very weak in the absence of credit restrictions and financial vulnerability. The crisis, per se, and the financial vulnerability, per se, do not change this weak relation. The latter becomes highly pro-cyclical only in one case: when firms are financially vulnerable and have to face tight credit conditions.

This study investigates the effect of a capital facilities project on nonprofit financial vulnerability metrics. The author employs a difference-in-differences technique to model the relationship between facilities investments and financial vulnerability indicators using data for a matched-pair sample of nonprofit organizations that invested and did not invest in a facilities project. Overall the findings suggest that investments in facilities are associated with temporary increases in an organization's net assets ratio and decreases in its surplus ratio after a project is completed, and that the costs associated with facilities projects (for example, debt) place strain on nonprofit finances. The study's findings have implications for the financial management of nonprofit organizations, particularly in regard to the associated costs of capital expansion.

We document multi-sector exporters’ heterogeneous responses to home currency depreciation. Following currency depreciation, firms tend to export relatively less in sectors that depend more on external financing, to avoid adverse impacts of potentially binding credit constraints. More specifically, credit-constrained exporters respond to currency depreciation by increasing production first in sectors with less external financing dependence, then in sectors that are more dependent on outside funds, until they exhaust their limited financial resources. These findings are consistent with our prior that exporters’ needs for external financing are greater when their home currencies depreciate. Upon home currency depreciation, exporters react by expanding production or by entering new destination markets, incurring significant upfront costs. The results survive a series of robustness checks, and are stronger for low-performance firms and for firms engaged in ordinary trade. The results have important policy implications for emerging market countries that rely heavily on exports but have weak financial institutions.

This study develops a systematic framework for assessing a country’s financial vulnerability using a predictive classification model of random forests. We introduce a new indicator that quantifies the potential loss in bank assets and measures a country’s overall vulnerability by aggregating these indicators across the banking sector. We also visualize the degree of vulnerability by creating a Financial Hazard Map that highlights countries and regions with underlying risks in their banking sectors.

In the framework of the current wave of home repossessions, many Spanish households struggle to keep up with repayments before going into arrears. Their financial vulnerability is not a simple function of the availability of income as they are repaying debts. Rather, it is to be understood in combination with a differential access to other resources that may help households to cope with hardship. Factors that help to keep up with repayments may include the availability of material aid and non-economic resources, such as information or social connections. But, at a certain stage, debtors may benefit less from aid to keep up with repayments, than from the advice to give them up, a decision that implies challenging the moral obligation to repay and devoting much time and effort to negotiation with the creditor. The availability of these resources needs to be considered in order to understand the (re)production of social inequalities linked to financial vulnerability as a result of mortgage default. No quadro da vaga atual de execução de hipotecas de casas, muitas famílias espanholas fazem grande esforço para pagar a tempo as prestações de empréstimos contraídos para a compra de habitação, tentando não entrar em incumprimento. A sua vulnerabilidade financeira não é mera função do rendimento de que dispõem quando têm dívidas a pagar e deve ser entendida em combinação com o acesso diferenciado a outros recursos que poderão ajudá-las a fazer face às dificuldades. Entre os fatores que facilitam o pagamento das dívidas poderão estar a disponibilidade de ajuda material e recursos não económicos, como a informação ou as relações sociais. Porém, a um certo nível, o mais vantajoso para os endividados pode não ser a ajuda para cumprirem com os pagamentos, mas sim o conselho de que deixem de pagar as prestações, uma decisão que implica pôr em causa a obrigação moral do pagamento da dívida e dedicar muito tempo e esforços à negociação com o credor. A disponibilidade desses recursos deve ser considerada para se compreender a (re)produção das desigualdades sociais ligadas à vulnerabilidade financeira resultante do incumprimento no pagamento dos empréstimos.

This paper uses rich firm-level data for the UK to investigate the link between firms’ financial health and export exit, paying attention to the ERM currency crisis and the global financial crisis. Our results show that deterioration in the financial position of firms has increased the hazard of export exit during the 2007–09 crisis but has no significant effect on the early 1990s crisis. We also explore the extent to which firms in financially vulnerable industries face greater sensitivity of export exit to financial conditions. We conclude that firms in sectors with great reliance on external finance experience higher hazards of exiting the export market during the 2007–09 crisis.

Although they are instrumental for economic development, productivity-enhancing corporate investments may increase the financial vulnerability of companies, especially in an economic and financial crisis. We employ an instrumental probit model with the aim of finding evidence for the investment and credit patterns that led companies into financial distress during the global financial crisis 2009–2010. The company-level micro-data for our study on three Central and East European countries—Hungary, Bulgaria, Romania and two Baltic countries, Latvia and Lithuania—originates from two independent surveys, the Business Environment and Enterprise Performance Survey conducted in 2008 and the Financial Crisis Survey conducted in 2009/2010. Both were carried out jointly by the EBRD and the World Bank. Our results emphasize a substantial adverse impact from investment intensity and debt financing on company financial soundness during a crisis. On top of that, we discover a strong non-linear pattern in the sensitivity of company distress to its investment-financing nexus.

This paper investigates the effect of the 2008–9 financial crisis on firms’ employment composition decision when it is possible to choose between permanent and fixed-term workers. We use linked employer-employee data for the universe of private sector firms in Portugal, and exploit precrisis variation in financial vulnerability across industries for identification. We find that firms in more financially constrained industries hire a larger proportion of fixed-term workers with respect to permanent workers after the 2008-9 crisis, relative to less financially vulnerable firms. At the worker-level, workers hired by firms in industries that require significant external financing are more likely to be hired with a fixed-term contract after the crisis than comparable workers hired by other firms. Our results suggest that the crisis induced financially constrained firms to use the more flexible fixed-term contracts more intensively., This research was partially funded by the European Union European Regional Development Fund (FEDER, Portugal), project FCOMP-01-0124-FEDER041505, and by Fundação para a Ciência e a Tecnologia, project EXPL/IIM-ECO/1207/2013.