Pathways to self-sufficiency in the microfinance ecosystem

We used latent class growth analysis to study the trajectories followed by microfinance institutions for 10 years. This technique can detect groups of firms that follow different patterns of change over time. We identified groups of institutions that followed the same strategy and iso-performance groups of institutions with the same outcome trajectory. The trajectories were analyzed with categorical regression and decision trees, which constitutes a novel approach to latent class growth analysis. Lending money to the poorest while making a profit is not straightforward and it is challenging for microfinance institutions to be self-sufficient. We found that the most useful strategy was to improve efficiency by lowering operating costs, followed by the control of credit risk. Deviating from the mission also had a positive effect on self-sufficiency, but was a strategy followed by few institutions. Rarely did changes in interest rates or not lending to women prove valuable. The findings are useful for the stakeholders of these institutions and particularly for managers

The role of organisational factors and environmental conditions on the success of newly founded firms

This study examines the influence of founding conditions and decisions on new companies' performance, analysing how both environmental context and organisational dynamics interact to determine their success. It distinguishes between two different success indicators: survival and profitable growth. An empirical study conducted using a sample of 3,722 new agri-food companies in two different periods, one of economic stability and the other of recession, showed that founding conditions had long-lasting effects on post-entry performance. The economic context acted as a moderator of the relationship between individual factors and success. Adverse environmental conditions were also a determinant of success, making surviving firms more competitive and resilient. The results reflect the survival of the fitter principle by showing that early profitability reduced the risk of failure and made firms more likely to become profitable in the medium term. Internationalisation strategies developed organisational capabilities that created an imprint for adaptability and growth

The relationship between microfinance mission drift and financial returns to stakeholders

Some microfinance institutions (MFIs) can drift from their social mission, generating well-studied effects for their borrowers. We focus on the lesser-known effect of mission drift on the financial return to other stakeholders (employees, government, micro-savers, and banking creditors). Using a sample of 534 MFIs, we calculated the economic value distributed by the MFI to these stakeholders by considering salaries, taxes, and interest paid. We found a negative relationship between average loan size and return to employees (RTE), government, and banking creditors, and a positive relationship between women borrowers and RTE and government. This is explained by the fact that mission-focused MFIs are usually small, labor-intensive institutions with a stable business model. We found a positive relationship between average loan size and return to micro-savers, and a negative relationship between women borrowers and return to micro-savers. The reason is that many mission-focused MFIs do not offer micro-savings, undermining financial inclusion

Firm and country characteristics related to cumulative contribution to society

Purpose: Many indicators attempt to measure the social performance of a company from different perspectives. Grounded in stakeholder theory, this paper aims to propose capitalising the economic value distributed annually to society over a period of time, hereafter called a firm’s cumulative contribution to society (CCS). This can be done by including everything that stakeholders value; for example, payments of taxes, remuneration of employees, payments to suppliers and creditors, donations, dividends, research and development expenses and efforts to improve the environment. Design/methodology/approach: First, this paper makes a methodological proposal about how to calculate the CCS and discusses potentials and shortcomings. Then, a set of hypotheses are formulated about the firm characteristics and country attributes that make the most positive contribution to society such as business models, financial performance, a country’s human development, income equality and the extent of its shadow economy. The authors also argue that a company that originally contributes to society will continue to do so because of the structural inertia faced by organisations. The hypotheses were validated with an empirical study conducted with a sample of 9, 276 new-born European companies. Findings: The most significant contributors to society are large, profitable companies, which are leveraged but solvent, with high asset turnover and high-profit margins and which are productive and pay high wages. Unfortunately, this win-win situation describes a small percentage of the explained variance, which can explain why social and financial performance sometimes do not go hand-in-hand. The paper identifies features of other types of companies that contribute to society, suggesting criteria for socially responsible investors. Country development favours the cumulative contribution that firms make to society. Research limitations/implications: Most accounting systems do not collect all the information necessary to calculate a refined version of the indicator such as percentage of purchases from local suppliers, percentage of salaries for executives and disabled employees and percentage of financing from socially responsible financial entities. The authors encourage modification of the accounting systems to include those aspects. Practical implications: This paper identifies several types of companies that contribute the most to society from a modest set of financial indicators. Socially responsible investors can estimate their contribution to society, devising new investment criteria. Social implications: The paper identifies several types of companies that contribute the most to society from a modest set of financial indicators. Socially responsible investors can estimate their contribution to society, devising new investment criteria. Originality/value: The paper makes two contributions, one methodological and the other empirical. By applying a financial methodology, the authors propose to capitalise the contributions of a company over a period of time. The empirical study identifies both firm and country characteristics that explain CCS

Predicting startup survival using first years financial statements

Numerous articles demonstrate the usefulness of financial ratios in predicting the bankruptcy of companies, but in the case of new companies their usefulness is questionable. Many of the firms that are successful today made few profits when they were first created. On the other hand, structural inertia from the theory of organizational ecology and the “survival of the fitter” principle advocate that companies that are healthy in their early years will go ahead in greater proportion than those that start with many difficulties. Our empirical study used financial data from a sample of 6, 167 newborn Spanish startup companies, analyzing their evolution up to eight years later. We found healthier financial indicators in the first years of startup companies that survived eight years than in those that failed, supporting the organizational ecology theory. We found statistically significant differences in profitability, productivity, liquidity, leverage, and size. The models developed showed predictive capacity, but they did not reach that of the bankruptcy models made with mature companies. The analyzed period corresponded to a period of economic crisis. The study was repeated with data from another noncrisis period to enhance the validity of the results, and obtained similar results

Devices for Prevention of Atrial Tachyarrhythmias

Atrial fibrillation (AF) is the most frequent sustained cardiac arrhythmia in clinical practice and, although its importance has been underestimated even in recent years, we are now becoming aware of its clinical transcendence1,2,3. The classical treatment is pharmacological, but its efficacy is limited and it does have side effects4,5. Therefore, in recent years, there has been an increasing interest in other types of non-pharmacological treatments6,7. Physiologic cardiac pacing has proven to be more effective than VVI mode pacing to prevent the occurrence of AF during the follow-up of patients who have had a permanent pacemaker implanted 8,9,10. There are currently different lines of research that use different atrial pacing techniques to prevent and treat episodes of paroxysmal atrial fibrillation11,12. Techniques of multi-site pacing in the right atrium or both atria, new atrial pacing sites, prevention algorithms for paroxysmal atrial fibrillation episodes, and even high-frequency atrial tachyarrhythmia termination algorithms have all been proposed. In this article, we will try to synthesize the grounds for and findings of the different lines of research currently being developed

Inter-relationship between firm growth and profitability in a context of economic crisis

This paper examines the dynamics between growth and profitability in an economic crisis context by considering the endogeneity of this relationship. It also analyzes the role of innovation and export intensity in the growth-profit relationship. Using a large firm-level dataset comprising Spanish manufacturing companies during the pre-crisis (2000–2007) and the crisis (2008–2014) period, static and dynamic panel data models are estimated. The analysis suggests the following results. First, in the short term, growth has a positive impact on profits, while the effect of profits on growth depends on the measure of growth used. So, employee’s growth requires previous profit but profit does not play a major role as determinant of sales growth. Second, profit rates are found to persist in the short term. In contrast, a reversion of turnover and employees growth rates is observed. Thirdly, the moderation analysis applied shows that the strategy that has enabled firms to grow is export. Moreover, the influence of the export intensity on profitability in the economic crisis period is obtained indirectly through sales and employee’s growth. Unlike expected, innovation efforts do not moderate the relationship between profitability and firm growth

Análisis de la influencia de los indicadores macroeconómicos en el Ibex 35 durante el periodo 2006-2016.

En un mundo cada vez más interconectado, los inversores que quieran acceder a los mercados financieros deben ser conscientes de los numerosos factores que influyen en su evolución. A su vez, la evolución de la economía de un país, que marca el funcionamiento del mismo, no puede considerarse algo ajeno a los mercados, ya que afecta a todos los niveles de la economía y la sociedad. Partiendo del interés que nos suscitan estas dos premisas, el presente trabajo se propone como objetivo principal analizar cómo se han comportado las variables macroeconómicas de la economía española, por un lado, y el Ibex 35 por otro, de manera que podamos analizar si se observa una conexión en su evolución, o lo que es lo mismo, una influencia de los indicadores sobre la evolución del índice bursátil. Para ello afrontaremos el análisis desde dos puntos de vista, a corto y largo plazo, pero siempre comprendidos dentro del periodo de 2006 a 2016, que nos ofrece diferentes tendencias económicas en diferentes subperiodos. Para el análisis a largo plazo estudiaremos la evolución temporal de todas las variables y la correlación entre ellas, mientras que para el estudio a corto plazo llevaremos a cabo un estudio de eventos. De esta manera, determinaremos desde diferentes puntos de vista y mediante diferentes modos de análisis la influencia de la economía real en la economía financiera

Estudio del sector automovilístico en Aragón. Perfil de las empresas de alto crecimiento.

La industria del automóvil tiene gran relevancia en la economía de nuestro país, siendo este sector uno de los motores fundamentales de España en los últimos tiempos. Por ello, a pesar de haber sido notablemente afectado durante los años de la última crisis económica, continúa siendo uno de los pilares sobre los que se mantienen altas expectativas a la hora de alcanzar la recuperación económica. Analizaremos cual ha sido la evolución del sector en Aragón en los últimos años e identificaremos las empresas de alto crecimiento, estudiando su perfil con el fin de analizar las causas de su éxito. Asimismo, veremos cuáles son las perspectivas de la industria aragonesa del automóvil en el entorno exterior. Incluyendo una comparación general con la empresas del sector a nivel nacional

El sector de equipos y componentes de automoción en Aragón. Perfil y características en el periodo 2013-2016.

El presente trabajo gira en torno a dos temas. Por un lado, los factores principales que han permitido que el sector de equipos y componentes de la automoción en Aragón haya tenido una recuperación exitosa en el periodo posterior a la crisis económica. Por otro lado, las líneas estratégicas a seguir por el sector para seguir siendo uno de los sectores más importantes y que más aporta a la economía española. Considerando estas dos cuestiones de interés, el objetivo principal de este trabajo es analizar cómo se han comportado, en términos de tendencia, las empresas aragonesas pertenecientes al sector de los componentes de automóvil, de manera que podamos determinar su evolución y su perfil económico-financiero durante el periodo más reciente de la salida de la crisis de 2008. Para ello, se identifican las empresas aragonesas pertenecientes al sector y se realiza una comparación de su desarrollo con el del resto empresas nacionales del mismo sector, para acercarnos a comprender cómo han evolucionado las empresas durante estos años de incertidumbre financiera. Posteriormente, se analizan las líneas estratégicas a seguir por el sector para que contribuyan más aún a su fortalecimiento y se pueda seguir sustentando su crecimiento económico y social