Co-determination of capital structure and stock returns—A LISREL approach

Yang, Chau-Chen; Lee, Cheng-Few; Gu, Yan-Xiang; Lee, Yen-Wen

doi:10.1016/j.qref.2009.12.001

Cited by 78 publications

(76 citation statements)

References 22 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The results of our investigation have confirmed the relationship between capital structure and stock return and this relationship was also validated by Pearson as well as Spearman correlation tests. The results of this study are consistent with the findings reported by Yang et al (2010). As a future study, we recommend the proposed model of this paper for insurance firms as well as other financial firms.…”

Section: Resultssupporting

confidence: 91%

“…The proposed study has adopted the framework proposed earlier by Yang et al (2010) and using LISREL software package, we have examined different hypotheses. The results of our investigation have confirmed the relationship between capital structure and stock return and this relationship was also validated by Pearson as well as Spearman correlation tests.…”

Section: Resultsmentioning

confidence: 99%

“…The study uses structural equation modelling and adopts the recently published work by Yang et al (2010). Fig.…”

Section: The Proposed Studymentioning

confidence: 99%

“…Chang et al (2009) implemented a Multiple Indicators and Multiple Causes (MIMIC) model to re-examine the same problem as Titman and Wessels specified but reported more promising results. Yang et al (2010) extended Titman and Wessels' investigation by using a single-equation technique to a multiequations method. They considered stock return in addition to the determinants of firms' capital structure in their investigations.…”

Section: Introductionmentioning

confidence: 96%

“…Therefore, a firm's determinants of its capital structure and those of its stock returns need to be considered, simultaneously. Yang et al (2010) solved the simultaneous equations and investigated the empirical relationship between the two endogenous variables including capital structure and stock returns and reported some common determinants. Their results demonstrated that stock returns, expected growth, uniqueness, asset structure, profitability, and industry classification were the important factors of capital structure, while the primary determinants of stock returns are leverage, expected growth, profitability, value and liquidity.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Co-determination of capital structure and stock returns in banking industry using structural equation modeling

Taghavi¹,

Valahzaghard²,

Alishahi³

2013

10.5267/j.msl

View full text Add to dashboard Cite

Capital structure plays essential role on financial strength of business units and there are literally many studies to confirm the relationship between capital structure and return growth. In this paper, we re-examine this relationship by investigating on 12 Iranian private banks using structural equation modelling over the period 2005-2011. The proposed study of this paper designs a questionnaire and distributes it among experts and analyse it use LISREL software package. The result indicates that there is a positive and meaningful relationship, when the level of significance is five percent between capital structure and stock return in private banking industry in Iran. The implementation of Pearson and Spearman correlation tests also validate the findings.

show abstract

Section: Resultssupporting

confidence: 91%

Section: Resultsmentioning

confidence: 99%

“…The study uses structural equation modelling and adopts the recently published work by Yang et al (2010). Fig.…”

Section: The Proposed Studymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 96%

Section: Introductionmentioning

confidence: 99%