Do the Firm-level Variables and Human Capital Impact Capital Structure Decisions? A Study of Non-financial Firms in Pakistan

Jahanzeb, Agha; Bajuri, Norkhairul Hafiz; Ghori, Aisha

doi:10.19026/rjaset.8.1239

Cited by 2 publications

(3 citation statements)

References 41 publications

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“…Relatively low debt at high company liquidity has results that are in line with the pecking order theory (Chasanah & Satrio, 2017). This study has results that are in line with Cahyani & Handayani (2017), Sheikh & Wang (2011), Jahanzeb et al(2014, Tarus et al(2014), Liang et al(2014), andHardanti &Gunawan (2010) which explain the correlation between liquidity and capital structure having a significant negative direction.…”

Section: The Effect Of Liquidity On Capital Structuresupporting

confidence: 88%

“…Research on liquidity on capital structure still has inconsistent results. Cahyani & Handayani(2017), Sheikh & Wang (2011), Liang et al (2014, Jahanzeb et al (2014), Tarus et al(2014), and Hardanti & Gunawan (2010) stated that capital structure which is affected by liquidity has a significant result in a negative direction. Thereafter, Ridloah (2010) and Sabir & Malik (2012) confirmed that there is a significant positive relationship between liquidity and capital structure.…”

Section: Introductionmentioning

confidence: 99%

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The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

Dewi

Fachrurrozie

2021

aaj

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The purpose of this research is to analyze the effect of profitability, liquidity, and asset structure on capital structure with firm size as a moderating variable. The population of this study was all property and real estate companies listed on the Indonesian Stock Exchange (IDX) from 2014-2016. The number of samples used was 39 companies with the audit of analysis of 117. This study used secondary data taken from the annual financial statements. The method of data analysis was descriptive analysis and Moderated regression analysis by difference absolute value test. The data analysis used was IBM SPSS Statistics 21. The result of the study showed that profitability, liquidity, and asset structure had negative and significant effects on capital structure. Firm size was able to moderates significantly the effect of liquidity on capital structure, but it is not able to moderate the effect of profitability and asset structure on the capital structure. The study concludes that capital structure is influenced by profitability, liquidity, and liquidity that moderated by firm size. Keywords: Profitability; Liquidity; Asset Structure; Capital Structure; Firm Size

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Section: The Effect Of Liquidity On Capital Structuresupporting

confidence: 88%

Section: Introductionmentioning

confidence: 99%

The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

Dewi

Fachrurrozie

2021

aaj

View full text Add to dashboard Cite

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“…Previous research in this area indicates that auditors are more likely to issue a going concern report when the probability of failure of a company exceeds 28% as calculated by Zmijewski’s (1984) financial distress prediction model (Krishnan & Krishnan, 1996). This financial distress threshold is also used in earlier studies conducted in Pakistan such as Jahanzeb et al (2016). So, we also follow a similar financial distress prediction model in our study.…”

Section: Data and Research Designmentioning

confidence: 93%

Audit Committee Independence and Auditor Reporting for Financially Distressed Companies: Evidence From an Emerging Economy

et al. 2022

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This study examines the relationship between audit committee independence (by using stockholding as a measure to assess substantive independence) and auditor reporting for financially distressed companies. Based on hand-collected data for 86 financially distressed companies listed on Pakistan Stock Exchange (PSX) for the period 2011 to 2019, our logistic regression results show that the greater the percentage of audit committee stockholding, the less likely the auditor is to issue going concern report. Further, this relationship is exacerbated by CEO influence. The results are robust to alternative estimation techniques, different measures of audit committee independence and CEO influence, and endogeneity issue. These results suggest that alongside procedural independence, it is important to focus on substantive independence of audit committees by using stockholding as an independence measure and assessing its impacts on auditor reporting. This study has important implications for shareholders and investors.

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Do the Firm-level Variables and Human Capital Impact Capital Structure Decisions? A Study of Non-financial Firms in Pakistan

Cited by 2 publications

References 41 publications

The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

The Effect of Profitability, Liquidity, and Asset Structure on Capital Structure with Firm Size as Moderating Variable

Audit Committee Independence and Auditor Reporting for Financially Distressed Companies: Evidence From an Emerging Economy

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