In this paper, we use a rich dataset of several countries to analyze how sound political measures affect cross-border bank flows. Furthermore, our work is the first to comprehensively examine various components of political stability on the aforementioned subject using a larger sample than previous studies, and covering the period 1984–2013. Our paper will inform policy makers which particular aspects of political stability have a significant effect on cross-border bank flows and provide an outline on the favorable long term political and institutional development to increase such flows. We find that sound political measures—and therefore, higher political stability—increase cross-border bank flows, especially in advanced economies. Moreover, we find that in advanced economies, the political stability components; socioeconomic conditions, investment profile, corruption within the political system, religious tensions, ethnic tensions, and bureaucracy quality have a positive and close association with such bank flows. In our work, we also find that policies aiming to increase political stability have a stronger impact after the financial crisis of 2008, namely with regard to policies that affect socioeconomic conditions, investment profile, corruption within the political system and religious tensions.

This study aims to establish which sources of financing were used and the relevance of different banking products for Portuguese companies during the pandemic. We also intend to understand the determinants of companies’ financing options and what lies behind their decisions concerning the appropriate level of debt. A quantitative methodology was used, based on a questionnaire given to Portuguese companies to analyse different financing issues. The sample was composed of 1957 companies with a business volume of more than EUR 500,000 per year. The results show that Portuguese companies focused on managing liquidity and corporate risk. We found evidence that companies kept financing themselves by banking products such as in the pre-pandemic period, although 29.6% resorted to the LAE-COVID economy support line. Companies decide on the appropriate amount of debt based on the nature of the business, the phase of the life cycle in which the company is, the cash flows’ volatility, accounting results, credit rating, and fiscal benefits. Academicians and companies should master the concept of company financing and adopt strategies to consider the level of debt and refine the banking products to be used. Although the literature on business financial management usually claims that all crises are the same, the COVID-19 pandemic not only caused a recession but also forced people and companies to adapt to a new environment. Portuguese companies have shown resilience and focus on their adoption of good financing practices.

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