A liquidity redistribution effect in intercorporate lending : evidence from private firms in Poland

Purpose: We examine the mechanism of intercorporate lending outside the business group, and a reaction of capital expenditures (CAPEX) and capital engagement in other firms to shocks in the provision of such loans. We diagnose the causes and effects of intercorporate lending outside the business group. Design/Methodology/Approach: We use panel data from annual reports (balance sheets and income statements) of 4,600 private Polish companies that provided loans to other firms in the period 2003-2014. We apply the vector autoregression panel model for microeconomic data and analysis of Granger causality, impulse response functions, and forecast error variation decomposition to explore the mechanism of intercorporate loan provision. Findings: Non-financial firms provide loans outside the business group through redistribution of their cash holdings generated from operating activity (cash flow) and long-term bank loans. The provision of loans by non-financial enterprises decreases CAPEX, as a result of the absence of free cash flows that were already used for loan provision. Shareholder loans substitute for capital engagement in other firms. Practical Implications: The findings could assist policymakers to notice that emergency borrowings from other companies are being used to defer defaults and introduce a new credit risk into the business sector. Originality/Value: The redistribution effect of cash holdings and money borrowed from banks provided to unrelated firms outside the business group is dangerous for the stability of the financial system due to the risk that these “indirect borrowers” will default.peer-reviewe

A multi-country test of brief reappraisal interventions on emotions during the COVID-19 pandemic.

The COVID-19 pandemic has increased negative emotions and decreased positive emotions globally. Left unchecked, these emotional changes might have a wide array of adverse impacts. To reduce negative emotions and increase positive emotions, we tested the effectiveness of reappraisal, an emotion-regulation strategy that modifies how one thinks about a situation. Participants from 87 countries and regions (n = 21,644) were randomly assigned to one of two brief reappraisal interventions (reconstrual or repurposing) or one of two control conditions (active or passive). Results revealed that both reappraisal interventions (vesus both control conditions) consistently reduced negative emotions and increased positive emotions across different measures. Reconstrual and repurposing interventions had similar effects. Importantly, planned exploratory analyses indicated that reappraisal interventions did not reduce intentions to practice preventive health behaviours. The findings demonstrate the viability of creating scalable, low-cost interventions for use around the world