Corporate governance and the dynamics of capital structure: New evidence

Chang, Ya‐Kai; Chou, Robin K.; Huang, Tai–Hsin

doi:10.1016/j.jbankfin.2014.04.026

Cited by 142 publications

(114 citation statements)

References 48 publications

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“…While these studies help clarify the dynamics of firms' financing decisions, the range is quite large, suggesting that some omitted factors are responsible for this high variance. Recent studies helped fill this gap by identifying some factors that influence firms' capital structure adjustment speed, such as corporate governance features (Chang, Chou, & Huang, 2014), high bankruptcy costs (Elsas & Florysiak, 2011), evidence that companies with poor governance structures adjust faster when product market competition is more intense (Chang, Chen, Chou, & Huang, 2015), and a positive relationship with cash flow realization (Faulkender et al, 2012). …”

Section: Capital Structure Adjustmentsmentioning

confidence: 99%

Capital Structure Adjustment in Brazilian Family Firms

2018

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ResumoAnalisamos em que medida as companhias familiares são diferentes das companhias não familiares em termos de endividamento e ajuste da estrutura de capital. Aplicando um modelo de trade-off dinâmico a uma amostra de companhias brasileiras de 2003 a 2013, foi mostrado que companhias familiares apresentam maior nível de endividamento e menor velocidade de ajuste em comparação às companhias não familiares. Argumenta-se que companhias familiares tendem a ter maior endividamento porque seus gestores são mais confiantes e otimistas que gestores de empresas não familiares. Restrições financeiras derivadas desse alto nível de endividamento previnem empresas familiares sobre alavancadas de ajustar-se rapidamente para uma estrutura de capital alvo.Palavras-chave: estrutura de capital; firmas familiares; velocidade de ajuste; maior acionista último. AbstractWe examine the extent to which family companies are different from non-family companies in their leverage ratios and their capital structure adjustment. By applying a dynamic trade-off model to a sample of Brazilian companies for 2003-2013, we show that family companies have higher leverage and slower adjustment speeds in comparison to non-family companies. We argue that family companies' managers tend toward higher leverage because they are more confident and optimistic than managers of non-family firms. Financial constraints stemming from this high leverage prevent over-leveraged family firms from rapidly adjusting their target capital structure.

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Section: Capital Structure Adjustmentsmentioning

confidence: 99%

Capital Structure Adjustment in Brazilian Family Firms

2018

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“…In selecting the population, this study excludes Banking & Finance and investment trusts; information technology; land and property sector companies as their unique financial attributes, intensity of regulation (Deloof, 2003;Chang, Chou, & Huang, 2014& Abed, Al-Attar & Suwaidan, 2012 and/or intensive use of leverage (Anderson and Reebet, 2003;Claessens, 2006;Andres, 2008;Estrin, Hanousek, Kocenda & Svejnar, 2009;Jiraporn, Singh &Lee, 2009 andAl-Fayoumi, Abuzayed &Alexander, 2010) are likely to confound the outcomes being studied. Also, the risk of missing data was minimized by precluding companies that were not listed throughout the review period.…”

Section: Sample Selectionmentioning

confidence: 99%

Corporate Governance and Cash Holdings: Empirical Evidence from an Emerging Country, Sri Lanka

Ajanthan¹,

Kumara²

2017

ijafr

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This study examines the influence of corporate governance practices on cash holdings of Sri Lankan listed companies. It develops hypotheses about the relationship between cash holding and corporate governance practices such as size, frequency of meetings, independence, independent chair and gender diversity. Using multiple regression analysis on data collected from the corporate annual reports of 90 listed companies, the study finds that corporate governance practices such as board size and gender diversity have a significant negative influence on cash holdings as well as independent chair has a significant positive influence on cash holdings. However, there is no evidence that board meetings affect cash holding in Sri Lankan companies. The study contributes to the literature on the factors that make variation in the amount of cash holding of the listed company and it may be useful for financial managers, business analyst, financial controller, operations managers, investors, financial management consultants and other stakeholders.

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“…The population of interest in this study is (initially) the 289 public companies which are listed on the CSE, as at (Deloof, 2003;Abed et al, 2012;Chang et al, 2014) and/or intensive use of leverage Claessens, 2006;Andres, 2008;Estrin et al, 2009;Jiraporn et al, 2009;Al-Fayoumi et al, 2010) are likely to confound the outcomes being studied. Also, the risk of missing data was minimized by precluding companies that were not listed throughout the review period.…”

Section: Sample Selectionmentioning

confidence: 99%

Corporate Governance and Cash Conversion Cycle: Evidence from Listed Companies in Sri Lanka

Ajanthan

Kumara

2017

Asian Economic and Financial Review

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The purpose of this study is to examine the impact of corporate governance on cash conversion cycle of Sri Lankan listed companies. This study adopted a co-relational research design. A sample of 90 Sri Lankan companies listed on the Colombo Stock Exchange for a period of five years (from 2011/12-2015/16) was used. The findings show that large number of directors and independent directors on the board and more number of meetings in a year shorten the cash conversion cycle (CCC) of Sri Lankan listed companies. The study adds to the literature on the factors that shorten the CCC of the listed company and it may be useful for financial managers, business analyst, financial controller, operations managers, investors, financial management consultants and other stakeholders.Contribution/ Originality: This study contributes in the existing literature of how the corporate governance mechanisms influence the efficiency of working capital management in developing economies like Sri Lanka. And also beneficial to the financial managers, investors, financial management consultant and other stakeholders to make different types of decisions.

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Corporate governance and the dynamics of capital structure: New evidence

Cited by 142 publications

References 48 publications

Capital Structure Adjustment in Brazilian Family Firms

Capital Structure Adjustment in Brazilian Family Firms

Corporate Governance and Cash Holdings: Empirical Evidence from an Emerging Country, Sri Lanka

Corporate Governance and Cash Conversion Cycle: Evidence from Listed Companies in Sri Lanka

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