Industry Overview - The study focuses on the financial distortions in capital markets between state-owned enterprises (SOEs) and private-owned enterprises (POEs) across 24 European countries from 2010 to 2016 [2] - SOEs have subsidized access to debt and equity compared to POEs, with a 1 percentage point increase in government stake reducing the implicit average finance cost by 0.01 percent [6][7] - The removal of SOEs from the market could lead to aggregate productivity losses of up to 40 percent due to their superior technical efficiency in some sectors [2] Core Findings - Targeted reforms that shut down poorly performing SOEs lead to aggregate total factor productivity (TFP) gains of up to 15 percent in every country [2] - Reforms that remove distortions before reallocating resources toward more productive firms can increase productivity by up to 83.7 percent [2] - SOEs are prevalent across competitive industries, with 70% operating in sectors like food, construction, and hospitality, typically dominated by private firms [6] Financial Distortions and Productivity - SOEs benefit from lower debt issuance costs and direct budget support, which distorts finance, innovation, and resource allocation [6] - The methodology used to measure financial frictions shows that SOEs face lower costs of finance, with a 1 p.p. increase in government shareholding reducing the cost of finance by 0.01% for non-publicly listed firms [11] - Publicly listed SOEs, however, face higher costs of accessing finance compared to non-listed SOEs [11] Sector-Specific Insights - The largest subsidies for SOEs occur in industries critical to the economy, such as financial services, electricity, water, and information and communications [11] - The fiscal burden of SOE financial subsidies ranges from 0.001% to 0.955% of GDP for the year 2016, with Slovenia experiencing the highest subsidy cost [11] Counterfactual Reforms - Shutting down all SOEs leads to productivity losses in some countries (e.g., Bosnia and Herzegovina with a 40% decline) and gains in others (e.g., Ukraine with a 35% increase) [12] - Targeted reforms that close only poorly performing SOEs result in TFP gains across all countries, with the highest gains in Germany (14.1%), Ukraine (11.1%), and Montenegro (8.4%) [14][86] - Combining targeted SOE reforms with financial market reforms that eliminate distortions can lead to TFP gains ranging from 26.6% in Austria to 85.5% in Ukraine [92] Data and Methodology - The study uses a novel firm-level database and implements Whited and Zhao's (2021) methodology to infer financial distortions [6][8] - The analysis leverages fixed-effect regressions to assess the role of state ownership in the cost of finance, controlling for firm size, age, productivity, and country-sector fixed effects [10] - The methodology assumes a CES production function to capture sector-wide financial frictions and firm-specific wedges [7][8]

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed Core Insights - The paper introduces the concept of "jobless development," highlighting that productivity growth in many emerging market and developing economies (EMDEs) is often negatively correlated with changes in the employment-to-population ratio [4][8][26] - It emphasizes significant differences in steady-state employment-to-population ratios across countries, particularly for women, where fewer legal protections correlate with lower employment ratios [4][9][30] Summary by Sections Introduction - The report discusses the dynamics of GDP per capita and its components, emphasizing the importance of the employment-to-population ratio in understanding economic development [8] - It contrasts the development trajectories of South Korea and India, noting that while both experienced GDP growth, South Korea saw an increase in employment ratios, whereas India experienced a decline [8][9] Methodology and Data - The analysis employs a two-stage methodology: first estimating steady-state employment ratios and then examining the correlation with institutional and policy factors [9][13] - The dataset includes 160 countries from 1960 to 2019, focusing on 103 EMDEs for the period 2000-2019, utilizing various data sources including the World Bank and ILO [22] First-Stage Regression Results - The results indicate that slower productivity growth and faster working-age population growth are associated with increases in employment-to-population ratios [23][24] - The analysis reveals that higher initial employment ratios correlate with slower increases in these ratios, suggesting conditional convergence towards country-specific steady-state levels [27][28] Second-Stage Regression Results - The second-stage analysis identifies several correlates of steady-state employment ratios, including trade openness, access to finance, and labor market flexibility [36][39] - It highlights that while few factors correlate with higher aggregate employment ratios, many are associated with higher non-agricultural employment ratios [36][37] Correlates Identified in the Literature - The report discusses structural factors influencing steady-state employment levels, such as trade openness, infrastructure investment, and labor market policies [37][39][40] - It notes that greater access to finance can stimulate investment and employment growth, while restrictive labor laws may hinder employment in the formal sector [40][42]

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy Research Working Paper 10926 Effective Fuel Price in Reducing Emission Intensity A Panel Analysis for Brazil Ayan Qu Macroeconomics, Trade and Investment Global Practice & Africa Region September 2024 Public Disclosure Authorized Policy Research Working Paper 10926 Abstract This paper studies how effective an incremental change in the price of fuel, a proxy for fuel carbon tax, is in reducing the emission intensity ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights a mixed landscape in B2B payment practices in the United States, with 46% of companies reporting no change in customer payment behavior, while one-third, particularly in the steel/metals sector, note faster invoice payments compared to the previous year [7][16] - Late payments remain a significant issue, with half of all B2B invoices currently overdue, impacting working capital management, and bad debts averaging 8% of all B2B credit sales [7][16] - Companies are increasingly adopting strategic risk management frameworks, with 15% more businesses leveraging credit insurance compared to the previous year [7][16] Summary by Sections B2B Payment Risk Management - Companies in the US report varied B2B customer payment behavior, with 46% indicating no change and one-third noting faster payments, particularly in the steel/metals sector [7] - Late payments from B2B credit transactions are a major issue, with half of all invoices overdue and bad debts averaging 8% [7] - The main reasons for late payments include administrative inefficiencies and invoice disputes, with overdue invoices typically turned into cash 20 days past due [7] Looking Ahead - There is a mixed outlook for US businesses, with 50% anticipating an increase in insolvencies, particularly in the steel/metals sector, while the chemicals sector is more optimistic [16][20] - 53% of companies expect an improvement in B2B customer payment behavior, especially in the steel/metals and electronics/ICT sectors [17][20] - Concerns about economic conditions, cybersecurity threats, and market saturation are prevalent among businesses, with 40% citing economic conditions as a top concern [20][29] Key Figures and Trends - 67% of companies used invoice financing, 65% utilized trade credit, and 52% relied on bank loans over the past 12 months [9] - 40% of businesses reacted to late payments by delaying payments to their suppliers, while 55% focused on maintaining stable Days-Sales-Outstanding (DSO) [7][16] - 69% of companies expect a surge in demand for their products and services in the coming months, particularly in the steel/metals and electronics/ICT sectors [20]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights ongoing financial struggles for businesses in Canada, particularly due to poor B2B payment practices, with significant concerns about rising insolvencies in the coming year [3][14] Summary by Sections B2B Payment Risk Management - Almost half of the surveyed companies report no change in the landscape of poor B2B customer payment behavior, with 25% noting a further deterioration [7] - An average of 46% of B2B invoices are overdue, with bad debts averaging 6% of all B2B invoices, particularly affecting the energy/fuel sector [7] - Companies are experiencing delays in turning overdue invoices into cash, averaging one month beyond the due date, with agri-food and consumer durables sectors facing the longest delays [7] Key Figures and Charts - 50% of companies rely on trade credit, 48% on invoice financing, and 47% on bank loans to meet short-term financial needs [13] - 42% of B2B sales are currently transacted on credit, an increase from the previous year, with 52% maintaining unchanged payment terms [7] Looking Ahead - 55% of businesses anticipate worsening insolvency levels, particularly in the energy/fuel sector, while 30% expect improvements in debt collection efficiency [14] - 65% of companies expect a surge in demand for products and services, especially in the consumer durables sector, with 46% anticipating improved profitability [14] - The primary concern for businesses is the impact of environmental and sustainability regulations, particularly in the energy/fuel industry [14]

B2B Payment Practices in North America (USMCA) - 49% of companies report no significant change in B2B payment behavior, especially in Mexico, while one-third of businesses, notably in the US, report quicker invoice payments [8] - Late payments currently affect around half of all invoices issued by North American businesses in B2B trade, with bad debts averaging 6% of all credit sales [8] - 35% of companies across North America respond to poor payment practices by delaying payments to their own suppliers, while deferring investment plans is another strategy, especially in Canada [8] - Approximately 45% of all B2B sales by North American companies are transacted on credit, an increase from the previous year, notably in Canada [8] - Around 55% of companies focus on maintaining debt collection efficiency to stabilize Days Sales Outstanding (DSO), with improvements reported in Mexico but deterioration in Canada [8] B2B Payment Risk Management - Administrative challenges faced by B2B credit customers in their payment processes are cited as the main reason for late payments, particularly among US businesses [8] - Customer cash flow issues contribute significantly to payment delays for almost one-third of companies, primarily in Mexico [8] - Companies are shifting away from in-house retention of customer credit risk, with 40% of Canadian and Mexican businesses using trade credit insurance, compared to 23% in the US [8] - Factoring is popular in Canada, where 46% of businesses use it as a credit management tool [8] Economic Outlook and Insolvency Trends - 48% of companies, primarily in Canada, anticipate an increase in insolvencies during the coming months, while 49% expect the insolvency trend to remain stable, especially in Mexico [15] - 45% of companies in North America expect Days Sales Outstanding (DSO) to remain stable, while 38% anticipate improved debt collection efficiency, notably in the US [15] - 67% of companies across North America expect a surge in demand for their products and services, with optimism particularly evident in Mexico [15] - Only 48% of businesses are positive about the prospect of improved profitability in the year ahead, with economic uncertainty being a key concern [15] Financing and Cash Flow Challenges - 57% of companies used trade credit as a main source of financing during the past 12 months, followed by invoice financing (52%) and bank loans (49%) [14] - 35% of companies report slowing down payments to suppliers due to late payments from B2B customers, while 31% face difficulties in meeting financial obligations [13] - 28% of companies delay paying bills and/or staff, and 25% report increased borrowing costs and reliance on short-term financing [13] Future Concerns and Strategic Adjustments - The main concerns for businesses in North America include economic conditions (36%), cybersecurity challenges (34%), and environmental and sustainability issues (31%) [20] - Market saturation and financial constraints are pressing challenges, with many businesses experiencing a lack of working capital and difficulty in accessing finance [15] - Companies are exploring diversified approaches to credit risk management, including trade credit insurance and factoring, to navigate the complex and challenging environment [8]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report discusses the significant volatility in commodity markets, particularly in energy, metals, and polymers, with sharp price increases observed from the end of 2021 through 2022, followed by price decreases in 2023 and 2024 [4] - Purchasing organizations are now required to adjust commodity and component prices back to a "fair price" level based on actual raw material costs and energy price developments [4] - The introduction of a spend digital twin is highlighted as a transformative tool for procurement, enabling buyers to gain a clear and real-time view of fair market prices [4][5] Summary by Sections Spend Digital Twin Overview - A spend digital twin allows for a comprehensive analysis of spending, enabling detailed examination of cost drivers at the category level and assessing market developments over time [4] - This tool helps establish a fair market price index that can be compared against actual price progression to identify negotiation points [4] Applications of Spend Digital Twin - Identifying negotiation potentials by comparing fair market price indices with actual price changes [7] - Preparing for supplier negotiations by calculating clawback opportunities and fair price adjustments [7][8] - Supporting the derivation of indexation contracts by analyzing historical price developments relative to fair market indices [8] Performance Measurement and Stakeholder Communication - A spend digital twin aids in measuring purchasing performance and separating market movements from negotiation performance [9] - It facilitates sharing information with cross-functional stakeholders, particularly the sales department, to inform pricing strategies based on cost developments [9] Implementation and Value Capture - Setting up a spend digital twin can take several weeks to months, depending on the model's complexity, but even a basic setup can provide valuable insights [9] - The report emphasizes that leveraging a spend digital twin can enhance procurement strategies, drive cost efficiencies, and sustain competitiveness in fluctuating market conditions [9]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The complexity of board roles and responsibilities has increased significantly, with two-thirds of surveyed directors acknowledging this trend [4][6] - Effective collaboration between boards and CEOs is crucial for enhancing organizational value, yet only one-third of respondents report effective collaboration [7][23] - Directors are increasingly prioritizing collaboration with management teams to navigate growing complexities [6][23] Summary by Sections Board Complexity - The business environment is more unpredictable, leading to an expansion of topics on board agendas, including technology trends, cybersecurity, and net-zero transitions [5][4] - The average number of days directors dedicate to board-related activities has increased from 25 in 2019 to 30 in 2023 [6] Collaboration Tactics - 59% of directors are strengthening collaboration with management teams, while 52% are dedicating more time to board work [6] - Effective collaboration is linked to higher perceived impact on long-term value creation, with effective collaborators being twice as likely to report high impact [11] Enhancing Collaboration - Establishing efficient board processes is essential, with effective collaborators being 2.4 times more likely to report efficient meeting management [16] - Prioritizing communication between boards and CEOs is critical, as misaligned agendas and poor information sharing are major barriers to effective collaboration [20][21] - Fostering a culture of trust and respect within the boardroom enhances collaboration, with effective collaborators more likely to engage in team-building activities [22]

Investment Rating - The report indicates a strong potential for the autonomous trucking industry, projecting a market size of approximately $600 billion by 2035, with significant growth opportunities driven by technological advancements and economic factors [1][15]. Core Insights - Autonomous vehicles (AVs) are expected to address critical challenges in the trucking industry, such as driver shortages and rising transportation costs, although their widespread adoption may be delayed by about a year [2][3]. - The report outlines two primary use cases for autonomous trucking: constrained autonomy (hub-to-hub operations) and full autonomy (direct distribution center-to-distribution center operations) [5][7]. - The total cost of ownership (TCO) for autonomous heavy-duty trucks is projected to decrease significantly, with potential savings of up to 42% per mile for long-distance routes [13][14]. Summary by Sections Industry Overview - The autonomous trucking market is projected to reach $616 billion by 2035, with significant contributions from China, the United States, and Europe [15][19]. - The U.S. is expected to have the fastest adoption rate, with 13% of heavy-duty trucks being autonomous by 2035, driven by high driver salaries and long distances [18][20]. Economic Factors - The U.S. faces a shortage of over 80,000 truck drivers, a number expected to double by 2030, while Europe anticipates a shortage of 745,000 drivers by 2028 [3][4]. - Transportation costs have risen significantly, with logistics costs as a share of GDP increasing from 7.5% in 2020 to 8.7% in 2023, creating a financial incentive for the adoption of autonomous trucking [3][4]. Technological Requirements - Autonomous trucks require advanced hardware and software, including sensors, high-performance computers, and AI-driven decision-making systems [4][24]. - Major challenges include the need for reliable detection systems and the availability of essential components like LiDAR and redundant braking systems [4][24]. Use Cases and Adoption - The report identifies two overlapping use cases for autonomous trucking: constrained autonomy for hub-to-hub operations and full autonomy for direct routes between distribution centers [5][7]. - The transition to full autonomy is expected to occur gradually from 2027 to 2040, with initial operations focusing on highways and geofenced areas [6][8]. Financial Implications - TCO benefits will vary by route length, with significant savings expected for longer routes (over 1,500 miles) due to reduced driver costs and optimized operations [12][13]. - The report suggests that as technology matures, the cost of autonomous systems will decrease, further enhancing TCO advantages [14][20]. Market Dynamics - Two emerging business models for autonomous trucking are identified: Driver as a Service (DaaS) and Capacity as a Service (CaaS), each offering different operational and financial implications [21][22]. - The report emphasizes the need for collaboration among OEMs, technology developers, and infrastructure providers to facilitate the successful deployment of autonomous trucks [23][24].

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy Research Working Paper 10923 Thirsty Business A Global Analysis of Extreme Weather Shocks on Firms Roberta Gatti Asif M. Islam Casey Maue Esha Zaveri Middle East and North Africa Region & Planet Vice Presidency September 2024 Public Disclosure Authorized Policy Research Working Paper 10923 Abstract Using global data from the World Bank's Enterprise Surveys that includes the precise geo-location of surveyed firms, t ...