Corporate diversification, debt maturity structures and firm value: The role of geographic segment data

Olibe, Kingsley O.; Rezaee, Zabihollah; Flagg, James C.; Ott, Richard L.

doi:10.1016/j.qref.2019.01.011

Cited by 6 publications

(11 citation statements)

References 41 publications

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“…MBR analysis of firm's current market value comparative to its book value. In prior research MBR use as control variable and also evidenced by (Dyreng, Hanlon, & Maydew, 2008;Rego & Wilson, 2012;Kang, 2013;Huseynov & Klamm, 2012;Masripah, Diyant, & Fitriasari, 2017;Chircop et al, 2018;Olibe et al, 2019). Researchers also examined market to book ratio with debt financing cost, those firm have high market to book ratio that firms borrow more and lower debt-financing cost (Chen, & Zhao, 2006).…”

Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

“…Researchers also examined market to book ratio with debt financing cost, those firm have high market to book ratio that firms borrow more and lower debt-financing cost (Chen, & Zhao, 2006). Olibe et al, (2019) claimed that MBR use to measure the firm growth. Olibe et al, (2019) examined firm growth with long term debt as those firms that have high growth opportunities not need to corrective role of debt and create restrict problems linked with high free cash flows and consequently these firms less long term debt.…”

Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

“…Olibe et al, (2019) claimed that MBR use to measure the firm growth. Olibe et al, (2019) examined firm growth with long term debt as those firms that have high growth opportunities not need to corrective role of debt and create restrict problems linked with high free cash flows and consequently these firms less long term debt. In past research market to book ratio use as proxy for agency problem (Deng, Elyasiani, & Mao, 2007).…”

Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

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The Relationship Between Corporate Diversification and Tax Avoidance: Empirical Evidence from the Emerging Economy of Pakistan

Khan

Anwar²,

Husnain³

2021

JAFEE

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Tax avoidance are the strategies that firms use to avoid their tax payments and rise their after-tax income. Recently, tax avoidance increase consideration in the modern research literature. In developing countries like Pakistan, taxes are a most important element to support the country’s budget and revenues. Therefore, this study tries to find the impact of corporate diversification on tax avoidance of listed firms in Pakistan stock exchange. For sample selection study use the 22 different sectors and select 129 companies based on availability of data. The time horizon of this study is 13 years started from 2006 to 2018 on annual basis. Study uses GAAPETR (tax expense / pre-tax income) to measure the tax avoidance besides entropy-index use for corporate diversification. To identify the long-term relationship between corporate diversification and tax avoidance study apply Johnson and Julius (1990) multivariate co-integration analysis. The results of Johnson and Julius (1990) approach shows that co-integration exist between corporate diversification and tax avoidance. Besides study use firm characteristics as control variables like leverage, firm profitability, ratio of capital expenditure and market to book ratio. Finally, study has policy implication for government, policy makers, regularity bodies, tax authority’s, investors and other stakeholders in Pakistan.

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Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

Section: Capital Expenditure and Tax Avoidancementioning

confidence: 99%

See 1 more Smart Citation

The Relationship Between Corporate Diversification and Tax Avoidance: Empirical Evidence from the Emerging Economy of Pakistan

Khan

Anwar²,

Husnain³

2021

JAFEE

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“…Previous studies examine the factors that affect debt maturity include systematic risk (H. Chen et al, 2021), cost stickiness (Habib and Costa, 2021), financial statement's comparability (Do, 2020), green credit policy (Xu and Li, 2020), earnings management (Maurice et al, 2020;Habib and Costa, 2021;Rey et al, 2020), earnings quality (VanKhanh and Hung, 2020;De Meyere et al, 2018), corporate social responsibility (Nguyen et al, 2020), corporate investment (Jungherr and Schott, 2020; Adachi-Sato and Vithessonthi, 2019), policy uncertainty (Datta et al, 2019;Pan et al, 2019), accounting conservatism (Salehi and Sehat, 2019), asset quality (Olibe et al, 2019;Gong and Wei, 2019), and fair value accounting (Ghanbari et al, 2018;Wang and Zhang, 2017). (Casino-Martínez et al 2019), (Manuelli, 2019), and(Kashefi Pour andLasfer, 2019) investigate the effect of country characteristics and macroeconomic factors on debt maturity.…”

Section: Introductionmentioning

confidence: 99%

The Role of Integrated Reporting in Emerging Market: Earnings Quality and Debt Maturity

Pamungkas

2021

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The maturity structure of debt can have financial and operational consequences for a firm as debt maturity is a key aspect of financial flexibility. Moreover, debt maturity can impact a firm’s ability to undertake long-term productive investments and, as a result, affect economic activity. This study aims to examine the effect of earnings quality on debt maturity and the role of Integrated Reporting (IR) in moderating these effects. This study's methodology is a quantitative approach with multiple linear regression models and panel data. The sample employed in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX). The type of data employed in this study is secondary data sourced from financial statements and annual reports from 2016 to 2020. The sample selection using a purposive sampling method with the number of samples amounted to 595 firm-year observations. The results of this study suggest that earnings quality does not affect debt maturity. Additional tests show that income maximization companies tend to have shorter debt maturity. However, IR failed to moderate the effect of earnings quality on debt maturity. This study indicates that the Financial Services Authority (OJK) needs to conduct better monitoring and regulation to increase creditor protection through optimal debt policy disclosure from the companies.

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“…From the agency theory point of view, this trend is suggestive of a likely increase in the potential for agency problem among non-financial firms in Nigeria. The empirical works reviewed on debt maturity structure are largely concentrated on foreign economies such as France, Germany, Spain, Italy, United Kingdom (Casino-Martinez, Lopez-Garcia, Mestre-Barber & Peiro-Gimenez, 2018), United States (Custodio, Ferreira & Laureano, 2013;Olibe, Rezaee, Flagg & Ott, 2019), India (Kalsie & Nagpal, 2018), China (Cai, Fairchild & Guney, 2008), Asia-Pacific region (Deesomsak, Paudyal & Pescetto, 2009), Turkey (Orman & Koskal, 2016), Ukraine (Stephan, Talavera & Tsapin, 2011), Indonesia (Soekirman, 2015), Europe (Correia, Brito & Brandao, 2014), Jordan (Taleb & Al-Shubiri, 2011), Pakistan (Shah & Khan, 2009) and Latin America (Terra, 2010) amongst others. This paper builds on these studies by proposing and investigating the influence of diversification as well as investor confidence on the debt maturity structure.…”

Section: Introductionmentioning

confidence: 99%

Firm-Specific Determinants of Debt Maturity Structure of Listed Non-Financial Firms in Nigeria

Mohammed

Mubi

2020

Malaysian Management Journal

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The importance of debt financing to firms as a basis for decision-making cannot be over-emphasised. This implies that the maturity structure of debts becomes important for understanding the outcomes of firms’ decisions. There is a dearth of evidence from the Nigerian context in the current body of literature on factors that determine debt maturity structure of listed firms. We observed a persistent and steady decline in the average ratio of length of maturity period among non-financial firms among listed non-financial firms in Nigeria. This study examined the extent to which non-debt tax-shield, liquidity, assets intensity, diversification, investors’ confidence, growth opportunity, firm size, profitability and dividend policy determines the debt maturity structure of non-financial firms in Nigeria. The secondary data collected from the annual reports of a sample of 92 listed non-financial firms were analysed using the Two-stage Generalised Method of Moments (GMM) regression model for the period between 2010 and 2015. The results indicate that the non-debt tax-shield, liquidity, assets intensity, diversification, growth opportunity, firm size and the dividend policy significantly determine the debt maturity structure among the listed non-financial firms in Nigeria. However, the evidence is not enough to conclude that profitability and investors’ confidence determine the debt maturity structure among the non-financial firms in Nigeria. Firm diversification and liquidity appeared to have the most profound negative effect on the debt maturity structure in line with predictions of special use of debt hypothesis and the pecking order theory. Overall, it is concluded that the firm-specific factors determine the choice of debt maturity structure among Nigerian listed non-financial firms. Although the findings of the study are robust, future studies in the areas can extend the literature by identifying and investigating institutional and macroeconomic factors that drive debt maturity structure in Nigeria.

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Corporate diversification, debt maturity structures and firm value: The role of geographic segment data

Cited by 6 publications

References 41 publications

The Relationship Between Corporate Diversification and Tax Avoidance: Empirical Evidence from the Emerging Economy of Pakistan

The Relationship Between Corporate Diversification and Tax Avoidance: Empirical Evidence from the Emerging Economy of Pakistan

The Role of Integrated Reporting in Emerging Market: Earnings Quality and Debt Maturity

Firm-Specific Determinants of Debt Maturity Structure of Listed Non-Financial Firms in Nigeria

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