Excess corporate payouts and financial distress risk

Andriosopoulos, Dimitris; Cesari, Amedeo De; Stathopoulos, Konstantinos

doi:10.1111/eufm.12291

Cited by 8 publications

(6 citation statements)

References 123 publications

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“…This research is in accordance with the research of [14] which states that the market book value has a significant positive effect on financial distress. And rejected research from [5], [12], [24].…”

Section: Discussionmentioning

confidence: 99%

“…Meanwhile, [12] rejects other research where there is no significant relationship price earnings ratio and financial distress. As for market book value, according to [12], [24] which state that market book value has a significant negative effect on financial distress. According to [14] it states that market book value has significant positive on financial distress.…”

Section: Introductionmentioning

confidence: 99%

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Determinant Financial Distress: Evidence Manufacture Company in Indonesia Stock Exchange 2018 – 2022

Fatmayuni,

Sri Dwi Ari Ambarwati,

Hendro Widjanarko

2024

AFS

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This study aims to examines six financial ratios on the manufacture companies. The six financial ratios are profitability (ROA and ROE), liquidity ratio (CR and QR), solvency ratio (DAR and DER), activity ratio (TATO), sales growth (SG) and market value (EPS and MBV). Variable Y are used binary. To determine the binary variable, the researcher uses a proxy where the company is experiencing financial distress if 1) the company has negative equity for two consecutive years, 2) the company experienced negative net income for two consecutive years (Luu Thu, 2023). The sample selection is based on the purposive sampling method, in order to obtain a sample of 147 companies. The analytical method used in this research is logistic analysis. The software in this study uses STATA17. The 33% of manufacturing companies studied were companies that experienced financial distress. This result of this study concludes that: 1) ROA_X1, ROE_X2, QR_X4, and TATO_X7 variables have a significant negative effect on financial distress. 2) The variables DAR_X5, and MBV_X10 have a significant positive effect on financial distress. 3) CR_X3, DER_X6, SG_X8 and EPS_X9 have no significant relationship with financial distress.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Determinant Financial Distress: Evidence Manufacture Company in Indonesia Stock Exchange 2018 – 2022

Fatmayuni,

Sri Dwi Ari Ambarwati,

Hendro Widjanarko

2024

AFS

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“…This effect is also stronger for companies with low cash-flows. Additionally, several scholars observe a propensity of overconfident managers to hold high cash deposits and their reluctance to pay dividends (Andriosopoulos et al 2020;Chen et al 2020;Deshmukh et al 2013;Huang-Meier et al 2016;Kim and Kim 2019). Bukalska's (2020) results also indicate less financial constraints in companies led by overconfident managers.…”

Section: Financing Preferences and Dividend Paymentsmentioning

confidence: 99%

Managerial overconfidence: promoter of or obstacle to organizational resilience?

Kunz

Sonnenholzner

2022

Rev Manag Sci

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Organizational resilience provides firms with the capability to face adverse circumstances successfully. Therefore, it constitutes an indispensable capability for each company. As indicated by Upper Echelon Theory, particularly executives and their personal traits exert a major impact on organizational capabilities, decision-making as well as action taking. Thus, they also should play an important role in promoting organizational resilience. However, so far literature lacks a comprehensive understanding regarding these relations. Accordingly, the present paper strives to add to such a comprehensive understanding with a particular focus on managerial overconfidence, one of the most widely and controversially discussed personality trait of executives. To pursue this goal, we develop a model comprising the relevant components of organizational resilience in terms of important resources, conduct a systematic literature review to identify the major corporate areas that are affected by managerial overconfidence and draw conclusions for the identified findings on the relation between organizational resilience and overconfidence. The analysis indicates a positive impact on social resources, a rather negative impact on procedural resources and a mixed impact on financial resources, where e.g. the effect on takeover activities is negative while the impact on financing preferences is at least partly positive. Moreover, the identified literature in large parts provides evidence regarding material resources, while social and procedural resources are covered to a lesser extent, indicating a need for further research.

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“…Others have also investigated how financial constraints and governance interact to decide payout policy (e.g., see Chae et al, 2009). I do not believe that this is risk-shifting (Andriosopoulos et al, 2019), given the higher future operating income.…”

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confidence: 99%

Productivity and payout policy

Kulchania

2022

Euro Fin Management

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I investigate how a firm's total factor productivity (TFP) is related to its payout policy. I find that firms with higher TFP are more likely to pay dividends and repurchase shares. Such firms also pay higher dividends and repurchase more shares, even after controlling for income and other factors known to affect payout policy. Results are robust to propensity score matching and other analyses, including adoption of productivity-enhancing technology. I find that firms with higher TFP earn higher future operating income; productive firms with higher agency concerns pay back more, thus draining resources that could potentially be misused.

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Excess corporate payouts and financial distress risk

Cited by 8 publications

References 123 publications

Determinant Financial Distress: Evidence Manufacture Company in Indonesia Stock Exchange 2018 – 2022

Determinant Financial Distress: Evidence Manufacture Company in Indonesia Stock Exchange 2018 – 2022

Managerial overconfidence: promoter of or obstacle to organizational resilience?

Productivity and payout policy

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