Capital structure and monitoring by local owners

Mavruk, Taylan; Sjögren, Stefan

doi:10.1080/00036846.2021.1904127

Cited by 3 publications

(1 citation statement)

References 38 publications

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“…The latest study of (Kruk, 2021) explains the concept of capital structure and examines the techniques in classifying this structure. Furthermore, the analysis (Mavruk and Sj€ ogren, 2021) describes local owners' capital structure and monitoring. Similarly, the study of (Mardones and Cuneo, 2019) finds a positive relationship between firm performance and capital structure.…”

Section: Introductionmentioning

confidence: 99%

Antecedents of capital structure and firm performance: evidence from G-7 countries

Riaz

Shu

Akhtar

2022

JMB

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PurposeThe main goal of this study is to analyze how monetary debt effects firm behavior of 167 registered manufacturing companies in G-7 countries.Design/methodology/approachThe sample of the present study is taken from the listed firms in G-7 countries. For the building companies, the yearly financial statements of 2007–2018 have been taken from world stock exchange and Thomson Reuters Data Stream. In this study, regression analysis are directed with panel data over the period of 2007–2018 using ordinary least square summary statistics, correlation matrix and generalized method moments. Data were analyzed by employing E Views and Stata 13 software.FindingsThe significant findings of the current study indicated that fixed assets, tangible assets, taxes, net cash and profitability have positive association with debt level.Research limitations/implicationsThe current work include only registered manufacturing firms in G-7 countries. Moreover, ownership types are not accounted for in this study.Practical implicationsThe current analysis is an empirical investigation of antecedents of debt regarding G-7 countries with up-to-date data. Various regression inquires have been made to design the models using different measures of debt and measure of firm performance indicators. These works will assist G-7 countries firms to know the effects of identified factors on time raising debt level.Originality/valueThe current work has been finalized using genuine data of yearly reports and database. This study incorporated antecedents of debt, which have limited discourse in prior literature. Furthermore, this study explores the connection between debt level and firm performance of G-7 countries.

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Section: Introductionmentioning

confidence: 99%

Antecedents of capital structure and firm performance: evidence from G-7 countries

Riaz

Shu

Akhtar

2022

JMB

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Effect of Determinants on Financial Leverage in FMCG Industry: An Empirical Study of Capital Structure Prior to COVID-19

Sisodia

Maheshwari

2023

Asia-Pacific Journal of Management Research and Innovation

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FMCG stands for fast-moving consumer goods industry, also known as consumer packaged goods, which refers to an industry engaged in the production of packaged food, cosmetics, household goods and other readily consumable items. This industry’s main characteristics reveal frequent purchases by consumers, high inventory turnover and a short shelf life. The FMCG industry is the fourth-largest sector in the Indian economy. This study is aimed at understanding the capital structure financing and investigating the relationship between the capital structure determinants and financial leverage of NIFTY FMCG companies from the year 2000 to 2018, prior to the COVID-19 breakdown health emergency. It has been stated in the World Bank report for 2019 that India is the seventh largest consumer market in the world, which includes elements like private consumption, investments and exports, thus encouraging the study of the capital structure of FMCG companies to be conducted. It is postulated that the capital structure determinants are profitability, growth opportunity, size, risk, non-debt tax shield, liquidity and asset structure. It is believed that liquidity is expected to play an important role as a capital structure determinant. Thus, an approach is developed to investigate the impact of capital structure determinants on the debt ratio of FMCG firms in the light of capital structure theories.

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Capital Structure Analysis – Theories and Determinants Validation Based on Evidence From the Czech Republic

Heckenbergerová¹,

Honková²

2023

E+M

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The optimal capital structure is a key precondition for business, even though the task of defining the optimal capital structure can be difficult. Previous studies present many different and mutually contradictory factors that should be considered with respect to managerial strategic financial decisions. The first part of the presented contribution summarises the effects of the most frequent capital structure determinants and reviews the world’s most important theories about the behaviour of enterprises when deciding on capital structure. The aim of our contribution is the analysis of capital structure behaviour in the Czech environment. Fundamental capital structure theory is revealed by statistical hypotheses testing. Moreover, we are mainly targeting significant determinants of capital structure. The results help us to create general recommendations for the financial management of Czech companies. In the scope of our study, there are approximately a thousand national financial statements of Czech companies from the most important sectors of economic activity for the period 2016–2019. The correlation analysis with partial correlation coefficient and multiple linear regression analysis was utilised to determine the effects and significance of the individual determinants. Data show that Czech companies do not prefer debt financing recommended by some capital structure theories. Their financial management behaviour corresponds to pecking order theory with insufficient utilisation of tax shield. Sectorwise analyses prove only one exception; motor vehicles wholesale, retail trade, repair and maintenance sector generally prefers financing by debt. Based on the literature review, we selected six significant determinants of capital structure: size, return on assets (ROA), return on equity (ROE), tangibility, asset growth and duration. Advanced statistical analyses show the power and influence of each determinant on capital structure and their mutual relations. Autocorrelations can negatively affect the results of regression analyses. We can conclude that the capital structure of Czech companies is mainly influenced by tangibility and ROA.

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Capital structure and monitoring by local owners

Cited by 3 publications

References 38 publications

Antecedents of capital structure and firm performance: evidence from G-7 countries

Antecedents of capital structure and firm performance: evidence from G-7 countries

Effect of Determinants on Financial Leverage in FMCG Industry: An Empirical Study of Capital Structure Prior to COVID-19

Capital Structure Analysis – Theories and Determinants Validation Based on Evidence From the Czech Republic

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