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Severe informational asymmetries, small size, unreliable financial statements and lack of collateral hamper the access of SMEs to traditional sources of debt financing. We use a survey data set of 4,583 SMEs from 25 European countries to analyse whether the use of leasing as a form of financing could fill the financing gap of constrained SMEs. We do so analysing whether the use of leasing by SMEs is triggered by the existence of financial constraints. Our findings indicate that after controlling for firm, bank and country-specific characteristics the likelihood of using leasing increases for financially constrained SMEs, which confirms our hypothesis. This paper contributes to the debate about differences in the use of lease financing between constrained and unconstrained SMEs, providing to the best of our knowledge, the first international evidence using a survey assessment of self-declared financial constraints for SMEs.

This study aims to investigate the impact of the new lease accounting standards CAS21 on enterprises' financing decisions. This paper uses a multiple-time-point difference-in-difference (DID) model to conduct research. The findings indicate that changes in lease accounting standards are likely to change the financing decisions of enterprises and reduce their financing efficiency. The reduction in financing efficiency is mainly manifested in the increase in the aggressive debt behavior of enterprises. The reduction in enterprise financing efficiency varies significantly among leasing scales in different industries, enterprises of different ownership structures and different ages. The new lease standards reduce the financing efficiency by increasing financial leverage ratios. 

We provide evidence that disclosed items are not processed differently from recognized items when the disclosures are salient, not based on management estimates, and amenable to simple techniques for imputing as-if recognized amounts. For a sample of firms with both capital and operating leases, we find that as-if recognized amounts for leases are generally reliable and that both recognized lease obligations and disclosed lease obligations are associated with proxies for costs of debt and equity. The magnitudes of these associations are not statistically different across accounting treatments, suggesting that market participants impound as-if recognized operating lease obligations and recognized capital lease obligations similarly into costs of capital. Conditioning on the reliability of as-if recognized operating lease obligations, we find a difference in the association between recognized versus as-if recognized lease obligations and proxies for the costs of debt and equity when the operating lease disclosures are less reliable.

Extant REIT research largely overlooks operating leases as an alternative source of financing. In this study, we hand-collect lease information of 334 unique REITs over the period of 1993 to 2018, and we document that an increasing number of REITs have been including operating leases in their capital structure to finance income-generating investment properties. We examine the determinants of the operating lease decision and find that REITs which adopt operating leases tend to be larger and have more growth opportunities as measured by Tobin’s Q. But they also have higher leverage, report lower funds from operations, and higher risk. We further find that operating lease intensity for REITs is negatively affected by credit ratings, but not by growth opportunities. Lastly, we examine the market effect related to operating lease decision and find that REITs with operating leases are associated with lower shareholder returns. Overall, our findings imply that operating leases are employed as an alternative financing source by REITs that are highly levered and cannot rely much on their internal funding. As a result, the market does not view the use of operating leases in the REIT sector favorably.

Purpose This paper aims to investigate sale with the temporary exclusion of usufruct, a format debated in classical Islamic jurisprudence. More specifically, it examines the application of this sale format in the diminishing partnership arrangement used by American Finance House LARIBA to finance house purchases. It analyzes the Sharīʿah issues and assesses the risks involved. Design/methodology/approach The research is qualitative, surveying and critically analyzing classical fiqh literature and contemporary juristic resolutions, as well as LARIBA’s financing documents. Finally, it systematically surveys the associated risk factors, first qualitatively, and then by quantifying them. Findings The research concludes that sale with the temporary exclusion of usufruct is a valid contract in Islamic law. When the usufruct is priced at market rate, the financing arrangement is genuinely Islamic and brings added value. Moreover, it is very effective in addressing risks for Islamic banks, particularly in countries with legal systems not designed to accommodate Islamic finance. Originality/value This study systematically examines all aspects of a contract that has not received sufficient academic attention, that has been underutilized by the Islamic finance industry and that is more fitting for implementation than many of the contracts currently being used.

The clean energy sector in China is predominantly composed of small- to medium-sized specialized enterprises renowned for their innovative prowess. However, these enterprises have long grappled with the conundrum of securing sustainable financing for their growth and development. A promising avenue to address this issue lies in leveraging their advantages through financial leasing patent rights. This approach not only holds significant development potential but also promises to alleviate their financing constraints without interrupting the day-to-day utilization of these patents. Despite its promise, the landscape of financial leasing of patent rights in China is marred by a myriad of challenges. These challenges encompass ambiguities surrounding the definition of such leases, the complexities of establishing legal patent ownership, qualifications required for clean energy enterprises, tax incentives, and the disclosure of accounting information. Drawing insights from international experiences and the current state of patent financing leases in China, this study advocates for the promotion of standardized practices within the realm of patent financing leases in the clean energy sector. Key recommendations include a call for clear and comprehensive legal provisions governing patent right financing leases, strategies to preempt patent defects and mitigate potential litigation disputes, the enhancement of supporting legal frameworks tailored to the unique needs of clean energy enterprises engaged in financing leases, and the elevation of legal awareness among clean energy enterprises regarding this innovative financial mechanism. These measures collectively aspire to foster a more conducive environment for the clean energy sector, where financing hurdles are transformed into stepping stones toward sustainable and environmentally responsible energy solutions.

Purpose: This research aims to examine impact of high lease numbers based on PSAK 73 and PSAK 30 on firm value.   Theoretical framework: The PSAK 73 (IFRS 16 adoption) mandates the reclassification of operating leases as finance leases, leading to an increase in both assets and liabilities of the company. This change, coupled with the challenging economic conditions caused by the Covid-19 pandemic, can lead into a potential decrease in firm's value.   Design/methodology/approach: The study uses purposive sampling of firms unaffected during the pandemic, such as food and beverage, agriculture, telecommunications, chemical, and pharmaceutical subsectors listed on Indonesia Stock Exchange (IDX) from 2017 to 2021 and multiple regression is used to test the hypothesis   Findings: The research findings suggest a positive relationship between the increase in lease amounts under PSAK 73 and firm value during the pandemic in Indonesia. Additionally, the study reveals a negative relationship between lease amounts under the old standard and firm value prior to the pandemic.   Research, Practical, & Social Implications: The implementation of PSAK 73 in 2020 is appropriate, it has a positive effect on firm value   Originality/value: The study’s originality is the impact of PSAK 73 on firm value in abnormal economic conditions that have not been done in previous research.

The paper examined the causal relationship between lease financing and profitability of Nigerian quoted conglomerates for the period spanning 2012 – 2017. The study focused on 6 conglomerates that are quoted on the Nigerian Stock Exchange as at 2017. Data were collated from published accounts of the affected companies. Data were analysed using descriptive and pooled OLS multiple regression statistics. Unit Root Test was conducted using Augmented Dickey –Fuller.. Estimated panel results indicated a negative and insignificant impact of Fixed Assets Turnover (FAT) on Return on Assets (ROA), Lease Financing (LFN) had a positive and insignificant impact on ROA, and Debt Ratio (LTDR) had a negative and insignificant impact on ROA. Firm size was used to control possible problem of non-linearity and heteroscedasticity. Based on these findings, leasing option was recommended as one of the sources of debt financing to boost the capital of Nigerian conglomerates to enable them to absorb losses, multiply fixed assets and grow continuously, thus providing employment and income in terms of tax revenue, profits, dividends, and wages and salaries to households for national growth and development.