Countries Lending Infrastructure and Capital Structure Determination: The case of European SMEs

McNamara, Andrea; Murro, Pierluigi; O’Donohoe, Sheila

doi:10.2139/ssrn.2745148

Cited by 14 publications

(19 citation statements)

References 39 publications

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“…To control for possible heteroscedasticity and autocorrelation within firms, standard errors of our regression coefficients are adjusted using Huber‐White approach and clustering at the firm level. Finally, following the extant literature (e.g., Bonaimé, Öztekin, & Warr, 2014; Danso & Adomako, 2014; Elmagrhi et al, 2018; Mc Namara, Murro, & O'Donohoe, 2017; Zou & Xiao, 2006), we lag the explanatory variables by one period to isolate the analysis from the potential reverse causality between our independent and dependent variables. The next section presents our estimated results.…”

Section: Data and Empirical Methodologymentioning

confidence: 99%

Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

et al. 2020

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We investigate firm‐level determinants of capital structure using a large sample of 4,284 Japanese firms over a 19‐year period (i.e., over 61,000 firm‐year observations), a hitherto less examined sample for this purpose. We conduct our analysis and interpret our findings predominantly within the pecking order, the trade‐off and the agency theoretical frameworks. We uncover three new findings. First, our evidence indicates that insights derived from the extant literature on capital structure are cross‐national and are applicable in the context of Japan, despite the unique characteristics of Japanese firms. Second, financial crisis significantly impacts the relationship between leverage and firm‐level determinants, particularly accentuating the effect of asset tangibility and growth. Third, product market competition significantly impacts the observed relationship between firm‐level determinants and leverage. Our results are robust, controlling for the joint effects of competition and crisis.

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Section: Data and Empirical Methodologymentioning

confidence: 99%

Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

et al. 2020

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“…Globalization has brought a threatening competition among organizations either business or non-business, towards the new product development. To build the new products that result in sustainable competitive performance, some managers rely on tangible resources such as adopting a new technology [2,3] accessing sufficient financial capital [3,4]), and infrastructure [5,6], etc. However, others have faith in intangible resources such as intellectual capital [7,8], networking [9,10], market knowledge [11,12], and reputation [13,14]), etc.…”

Section: Introductionmentioning

confidence: 99%

Unpacking the importance of intangible skills in new product development and sustainable business performance; strategies for marketing managers

Ali¹,

Li²,

Yang³

et al. 2020

PLoS ONE

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Firms need sufficient resources (tangible and intangible) and capabilities to build unique products due to customers' demands and choices, market competition and globalization. Despite sufficient resources, many firms cannot build new products according to the customers' preferences and market trends due to lack of marketing capabilities, lack of skilled marketing staff and lack of experienced managers. However, studies have not yet examined what types of intangible skills of marketing managers are prominent for building new products. This study examines the importance of the intangible skills; intellectual captial, financial literacy and business experience in new product development that results in sustainable competitive performance. We used a mixed-method approach; questionnaire (283) and interviews (16) for data collection and then applied structural equation modelling for testing the hypotheses. The results revealed that all the three intangible skills; intellectual captial, financial literacy and business experience significant influence new product development and sustainable competitive performance. However, considering the relative importance, financial literacy and intellectual capital are the most significant predictors of sustainable competitive performance and new product development respectively. Moreover, new product development fully mediates the path between intellectual capital and sustainable competitive performance while it partially mediates the link between financial literacy, business experience and sustainable competitive performance. Considering the importance of tangible resources, our study scrutinized that financial resources have a significant influence on new product development and sustainable competitive performance while technological resources do not play a significant role. This research recommends firms to emphasize on the improvement of intangible skills of the managers in order to build new products that result in sustainable competitive position. This study also recommends marketing managers to improve their financial skills and experience by participating in various seminars and workshops that can spur their new idea generation and new product development capabilities.

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“…This is particularly relevant for bank-based financial systems, like Europe, where private debt remains the major source of external financing for firms (de Haan et al, 2012;Gomes and Phillips, 2012) 3 and where different legal traditions and institutional characteristics co-exist. I contribute to the "law & finance" literature dealing with the relationship between the legal and institutional environment, firms capital structure, and the design of financial contracts (Mc Namara et al, 2017;Shah et al, 2017;Cho et al, 2014;Bae and Goyal, 2009;Qian and Strahan, 2007). My contributions complement several studies on private debt renegotiation outside of distress, mostly on the US credit market (Nikolaev, 2018;Roberts, 2015; Roberts and Sufi, 2009) and a growing literature on the role of contractual features in financial contracting and debt renegotiation (Asquith et al, 2005;Denis and Wang, 2014;Dichev and Skinner, 2002;Saavedra, 2018).…”

Section: Introductionmentioning

confidence: 95%

“…Creditors rights also shape firms' capital structures, as stronger creditors rights are associated with low long-term leverage and lower long-term debt issuance (Cho et al, 2014). Efficient judicial systems also reduce corporate leverage (Shah et al, 2017) while more efficient bankruptcy regimes favor long term debt growth (Mc Namara et al, 2017). Moreover, Haselman et al (2010 and Haselman and Wachtel (2010) show that legal environment affects bank behavior.…”

Section: Literature Reviewmentioning

confidence: 99%

“…According to the "law & finance" literature, capital structure, financial contracts and bank behavior respond to the legal and institutional environment (Mc Namara et al, 2017;Haselman et al, 2010;Qian and Strahan, 2007). Differences in legal protection, such as creditor rights (Cho et al, 2014), affect the terms of a loan agreement (Bae and Goyal, 2009).…”

Section: Introductionmentioning

confidence: 99%

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How legal and institutional environments shape the private debt renegotiation process?

Godlewski

2020

Journal of Corporate Finance

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I investigate how legal and institutional conditions around loan origination influence a private debt renegotiation process. Using a large sample of 15,000 loans on the European credit market, I apply a sequential logit model to consider the renegotiation likelihood, the conditional probability of multiple renegotiation rounds or multiple amended terms, and the renegotiation outcomes conditional on specific loan amendments. I find that legal systems with stronger protection of creditors control rights have a positive influence on renegotiation likelihood and favorable outcomes on amendments to amount or maturity. Stronger legal protection reduces renegotiation likelihood when creditors face potential strategic default by shareholders. The legal and institutional environment has a significant effect on how the initial design of the financial contract impacts the renegotiation process.

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Countries Lending Infrastructure and Capital Structure Determination: The case of European SMEs

Cited by 14 publications

References 39 publications

Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

Capital structure revisited. Do crisis and competition matter in a Keiretsu corporate structure?

Unpacking the importance of intangible skills in new product development and sustainable business performance; strategies for marketing managers

How legal and institutional environments shape the private debt renegotiation process?

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