{"title":"Impacts and risks of borrowing on corporate performance: evidence from Japan and Sub-Saharan Africa","authors":"Ekote Nelson Nnoko, Yuji Maeda","doi":"10.1007/s41685-022-00263-6","DOIUrl":null,"url":null,"abstract":"<div><p>Borrowing constitutes the capital structure of a firm. Also, impacts of borrowing on corporate performance differ from one nation to another. This study used data and multiple regression analysis to determine the impacts and sensitivity of borrowing on related risks in corporate performance. Data included a sample of manufacturing companies from the Tokyo Stock Exchange (TSE) and manufacturing companies from some top stock exchanges in Sub-Saharan Africa (SSA) from 2016 to 2019. The results showed that borrowing affects corporate performance. Due to differences in interest rate, inflation rate, governance and fluctuating economic conditions, impacts and risks of borrowing in SSA are higher than in Japan. The results also indicated that financial performance can be optimized by mitigating interest rate risk, exchange rate risk, market risk and fluctuations in economic conditions. In conclusion, the negative impacts of borrowing on corporate performance are more substantial in SSA than in Japan.</p></div>","PeriodicalId":36164,"journal":{"name":"Asia-Pacific Journal of Regional Science","volume":null,"pages":null},"PeriodicalIF":1.9000,"publicationDate":"2022-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asia-Pacific Journal of Regional Science","FirstCategoryId":"1085","ListUrlMain":"https://link.springer.com/article/10.1007/s41685-022-00263-6","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Borrowing constitutes the capital structure of a firm. Also, impacts of borrowing on corporate performance differ from one nation to another. This study used data and multiple regression analysis to determine the impacts and sensitivity of borrowing on related risks in corporate performance. Data included a sample of manufacturing companies from the Tokyo Stock Exchange (TSE) and manufacturing companies from some top stock exchanges in Sub-Saharan Africa (SSA) from 2016 to 2019. The results showed that borrowing affects corporate performance. Due to differences in interest rate, inflation rate, governance and fluctuating economic conditions, impacts and risks of borrowing in SSA are higher than in Japan. The results also indicated that financial performance can be optimized by mitigating interest rate risk, exchange rate risk, market risk and fluctuations in economic conditions. In conclusion, the negative impacts of borrowing on corporate performance are more substantial in SSA than in Japan.
期刊介绍：
The Asia-Pacific Journal of Regional Science expands the frontiers of regional science through the diffusion of intrinsically developed and advanced modern, regional science methodologies throughout the Asia-Pacific region. Articles published in the journal foster progress and development of regional science through the promotion of comprehensive and interdisciplinary academic studies in relationship to research in regional science across the globe. The journal’s scope includes articles dedicated to theoretical economics, positive economics including econometrics and statistical analysis and input–output analysis, CGE, Simulation, applied economics including international economics, regional economics, industrial organization, analysis of governance and institutional issues, law and economics, migration and labor markets, spatial economics, land economics, urban economics, agricultural economics, environmental economics, behavioral economics and spatial analysis with GIS/RS data education economics, sociology including urban sociology, rural sociology, environmental sociology and educational sociology, as well as traffic engineering. The journal provides a unique platform for its research community to further develop, analyze, and resolve urgent regional and urban issues in Asia, and to further refine established research around the world in this multidisciplinary field. The journal invites original articles, proposals, and book reviews.The Asia-Pacific Journal of Regional Science is a new English-language journal that spun out of Chiikigakukenkyuu, which has a 45-year history of publishing the best Japanese research in regional science in the Japanese language and, more recently and more frequently, in English. The development of regional science as an international discipline has necessitated the need for a new publication in English. The Asia-Pacific Journal of Regional Science is a publishing vehicle for English-language contributions to the field in Japan, across the complete Asia-Pacific arena, and beyond.Content published in this journal is peer reviewed (Double Blind).
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