Dynamics of capital structure: evidence from Indian manufacturing firms

Bajaj, Yukti; Kashiramka, Smita; Singh, Shveta

doi:10.1504/jgba.2018.097774

Cited by 20 publications

(16 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The role of moderating firm size increases the effect of leverage on firm value which the larger the size the higher the space to increase debt for business expansion. The finding shows that the coefficient on the interaction term between firm size and profitability is very large and positively moderated (+1.8364) and significant at the 5% level (Bajaj, Kashiramka, & Singh, 2018;Vătavu, 2015). This result can be explained, among other things, by the finding that consistency between leverage (debt ratio) and Islamic firm value permits managers to engage to add debt financing proportionally.…”

Section: The Effect Of Moderating Variable Firm Size On the Relationsmentioning

confidence: 86%

The Moderating Role of Firm Size on Financial Characteristics and Islamic Firm Value at Indonesian Equity Market

Santosa

2020

Business: Theory and Practice

View full text Add to dashboard Cite

This study aims to understand the moderating role of firm size on financial characteristics and Islamic firm value. Then study how the influence of firm size moderation on the relationship of financial characteristics and corporate governance with firm value. This study uses secondary data from financial statements and analyzed by the panel data method for six years. The sample selection is arranged by the purposive sampling method with Islamic index constituent population. Conclusion: leverage, profitability, and efficiency have a significant positive effect on Islamic firm value, but the liquidity and audit committee do not affect. Firm size moderators provide a reinforcing effect for all independent variables so that liquidity and audit committees have a positive effect on firm value. Implications: Islamic firm investors in the equity market should consider the crucial variable, namely firm size, in addition to firm and corporate governance characteristics. These conclusions provide important implications for managers and relevant authorities to enhance financial market information related to firm value and further attention to corporate governance mechanisms.

show abstract

Section: The Effect Of Moderating Variable Firm Size On the Relationsmentioning

confidence: 86%

The Moderating Role of Firm Size on Financial Characteristics and Islamic Firm Value at Indonesian Equity Market

Santosa

2020

Business: Theory and Practice

View full text Add to dashboard Cite

show abstract

“…These findings provide an opportunity for the researchers to check whether similar results can be observed in the developed market after disaggregating the phenomenon of IPO underpricing. Moreover, different industries face different financial issues (Bajaj et al, 2018); therefore, IPOs focusing on specific industry can be analyzed in the same manner for an in-depth analysis in future.…”

Section: Discussionmentioning

confidence: 99%

Impact of anchor investors on IPO returns during pre-market and aftermarket: evidence from India

Gupta

Singh

Yadav

2019

JAMR

Self Cite

View full text Add to dashboard Cite

Purpose The unique regulatory design of India provides us with the opportunity to disaggregate traditional initial public offering (IPO) underpricing into three categories: voluntary, pre-market and post-market. The presence of anchor investors in India makes it a compelling case to study. These individuals were introduced to bring transparency in the book building process, but their impact on pre-market and post-market underpricing was not foreseen. Therefore, the purpose of this paper is to evaluate the impact of anchor investors on the IPO underpricing after disaggregation and on the long-run performance of an IPO. Design/methodology/approach A sample covering 232 IPOs from a period of 2009–2018 is included. The empirical analysis explores the impact of various firm-specific as well as market-specific variables on IPO underpricing. The financial data for the empirical analysis are extracted from Prime database and websites of National Stock Exchange and Bombay Stock Exchange. To deal with the outliers effectively, this paper deploys “robust-regression.” Findings The study finds that investor’s subscription rate and voluntary underpricing impacts the pre-market but do not have any impact on the post-market while the age of the firm has a different impact on both the markets and the number of anchor investors have the same impact in both markets. Anchor investors’ participation increases the pre-market as well as post-market underpricing. Lastly, the long-term performance of IPOs backed by the anchor investors is high relative to the IPOs not subscribed to by the anchor investors. Originality/value This paper is believed to be the first attempt to study the impact of anchor investors on the disaggregated IPO underpricing. The findings of this study will have a great insight for the investors.

show abstract

“…As a result, the dynamic model poses the problem of autocorrelation and endogeneity. The endogeneity concerns also arise from simultaneity bias, omitted variable bias and measurement error (Arellano and Bond, 1991;Blundell and Blond, 2000;Bajaj et al, 2018). For instance, firms with high R&D investments may usually have larger boards or more independent directors.…”

Section: Empirical Models and Estimation Methodsmentioning

confidence: 99%

Corporate governance mechanisms and corporate investments: evidence from India

Suman

Singh

2020

IJPPM

Self Cite

View full text Add to dashboard Cite

PurposeThe purpose of this paper is to empirically investigate the influence of corporate governance variables relating to the board of directors, audit and ownership on the agency problems that inflict a firm's investments in capital and research and development (R&D) expenditures. This study posits that the R&D investments are inflicted by the agency problem of “quiet life” whereas “empire-building” agency problem affects capital expenditure decisions.Design/methodology/ approachThis study analyses the investment behaviour of non-financial and non-utility firms listed on NIFTY 200 from FY 2009 to FY 2018 using a static and dynamic model.FindingsThe results from the static model suggest that ownership concentration mitigates the agency problem of the “quiet life” that affects R&D expenditures. However, no corporate governance attribute has a significant impact on R&D investments under the assumption of the dynamic model. In respect of capital expenditures, the analysis of static model yields that audits by large auditor firms and usage of non-audit services ameliorate the agency problem of “empire-building”. The results from the dynamic model show that independent boards worsen it. They also continue to provide empirical evidence in favour of large auditors.Originality/valueThis paper contributes to the literature on the corporate governance-investment association by simultaneously examining the impact of multiple corporate governance attributes on the agency problems of “quiet life” and “empire-building” that affect R&D and capital expenditures, respectively, in a static and dynamic context for a sample of Indian firms.

show abstract

Dynamics of capital structure: evidence from Indian manufacturing firms

Cited by 20 publications

References 0 publications

The Moderating Role of Firm Size on Financial Characteristics and Islamic Firm Value at Indonesian Equity Market

The Moderating Role of Firm Size on Financial Characteristics and Islamic Firm Value at Indonesian Equity Market

Impact of anchor investors on IPO returns during pre-market and aftermarket: evidence from India

Corporate governance mechanisms and corporate investments: evidence from India

Contact Info

Product

Resources

About