A revisit of capital structure puzzle: Global evidence and analysis

Hossain, Mohammed

doi:10.1016/j.iref.2021.05.001

Cited by 15 publications

(9 citation statements)

References 90 publications

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“…The financial approach of cash management examines how cash and liquid assets impact company value and the ideal capital structure of a company (Hossain, 2021). This theory connects cash management's significance in an imperfect market to financial theory, suggesting ways to incorporate cash balances into theoretical financial models like the Modigliani-Miller (M&M) model or the Capital Asset Pricing Model (CAPM).…”

Section: Literature Reviewmentioning

confidence: 99%

Cash Management: A Key Driver of Performance for Conventional Banks in Pakistan

Raza,

Al- Abdallat,

Shaikh

2023

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This research examines the critical influence of cash management on the financial efficacy of the conventional banking sector in Pakistan. This study represents the initial attempt to assess the influence of liquidity, debt ratio, and bank size on return on assets among five conventional banks in Pakistan. Information was obtained from audited annual reports from publicly traded banks that span from 2017 to 2021. The results indicate a significant positive correlation between liquidity and return on assets (ROA). Additionally, a significant negative association between debt ratio and ROA is examined. Furthermore, the study reveals that the size of banks exhibits a significant negative relationship with ROA. The study will provide valuable insights for financial managers, portfolio analysts, treasurers, and controllers on the practical implementation of contemporary cash management strategies.

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Section: Literature Reviewmentioning

confidence: 99%

Cash Management: A Key Driver of Performance for Conventional Banks in Pakistan

Raza,

Al- Abdallat,

Shaikh

2023

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“…Generally, the cost of equity (KE) is significantly more than the cost of debt (KD) when the interest rates are low. Apart from that debt financing provides the facility of tax shield benefit (Hossain, 2021) but the literature on the topic is inconclusive and shows mixed results. Therefore, given its significance for firm valuation, and performance it is considered in the current study for better contextualized understanding.…”

Section: Introductionmentioning

confidence: 99%

Firms’ Performance in Pakistan: The Impact of Government Policies, Capital Structure, and Board Diversity

Khan¹,

Rasheed²,

Uddin³

2023

NIJBM

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The present study has three main objectives. First, to investigate the effect of capital structure on firms' performance. The second is to investigate the effect of board member diversity on firms' performance. Third, given government interest in the thriving business sector, the study aims to access the impact of government support policies on the performance of firms, particularly in the construction and automobile sectors. For this, we selected 40 firms from these sectors from the period 2010 to 2021. The generalized method of movement (GMM) is used to test the relationships. The results of the present study show that capital structure has a significant and positive effect on firms' performance. The diversity of board members, which is divided into two sub-categories i.e. demographic diversity and cognitive diversity has significant negative and positive effects on firms' performance. Lastly, there is a negative relationship between government support policies and firms’ performance. These findings provide unique insight to the government, policymakers, researchers, and managers in the context of Pakistan. The thriving business sector is key for the economic survival of a country and these finding can enable managers and policymakers to utilize capital structure and board composition for ensuring optimal performance and effective policy making.

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“…Capital structure decision has been considered a significant financial framework in corporate finance literature that estimates the optimal equity and debt structure that a firm maintains to achieve its stated goal (Hossain, 2021).…”

Section: Introductionmentioning

confidence: 99%

Factors Affecting Capital Structure Decisions: A Comparative Study of Listed Firms in Egypt and Nigeria

Elbialy

Metawea

2023

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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This study aims to investigate factors affecting the Capital Structure Decisions of listed firms in Egypt and Nigeria. The data collection instrument was the financial statements of Nigerian and Egyptian listed firms, which consisted of an unbalanced panel of 60 firms over 11 years. Only 176 observations for 16 Egyptian firms and 165 observations for 15 Nigerian firms were statistically valid and free of missing data. Panel Data analysis was employed to test the research hypotheses through EViews and SPSS programs. The study results indicated that there were significant effects of financial cost (Market book ratio, stock return, and deflated return) on capital structure decisions (book leverage, long-term capital structure, and Shortterm capital structure) of the listed firm in Egypt and Nigeria. This effect was found to be a negative effect for the financial costs (market-to-book ratio and stock return) on book leverage, long-term capital structure, and Short-term capital structure of a listed firm in Egypt and Nigeria and a positive for the market-to-book ratio on both book leverage and the short term capital of listed firms in Nigeria. Finally, the results showed that there is an insignificant effect of financial costs (deflated return and stock return) on the long-term capital of listed firms in Egypt and Nigeria.

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A revisit of capital structure puzzle: Global evidence and analysis

Cited by 15 publications

References 90 publications

Cash Management: A Key Driver of Performance for Conventional Banks in Pakistan

Cash Management: A Key Driver of Performance for Conventional Banks in Pakistan

Firms’ Performance in Pakistan: The Impact of Government Policies, Capital Structure, and Board Diversity

Factors Affecting Capital Structure Decisions: A Comparative Study of Listed Firms in Egypt and Nigeria

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