Investigating the Effects of Capital Structure and Corporate Governance on Firm Performance: An Analysis of the Sugar Industry

Shahzad, Akmal; Zulfiqar, Bushra; Hassan, Mehmood Ul; Mathkur, Naif Mansour; Ahmed, Irfan

doi:10.3389/fpsyg.2022.905808

Cited by 8 publications

(14 citation statements)

References 80 publications

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“…2.2.4 Relationships between corporate governance, capital structure and firm performance. Numerous studies (Nawaz and Nawaz, 2019;PeiZhi and Ramzan, 2020;Shahzad et al, 2022) The effects of corporate governance have examined the direct relationships between CG, CS and FP by considering only two of these variables at a time, ignoring the interaction that can exist between them. However, very few studies (Kassim et al, 2013;Budiman, 2015;Shahid and Akash, 2015;Iqbal and Javed, 2017;Detthamrong et al, 2017;Bashir and Asad, 2018) study the mediating or moderating effect of (1) CS on the relationship between CG and FP and (2) CG on the relationship between CS and FP.…”

Section: 23mentioning

confidence: 99%

“…Since POT predicts that corporations use their resources rather than borrow them, it expects a negative relationship. The validity of the POT has been proved in numerous empirical research (Pham and Nguyen, 2020; Shahzad et al. , 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Numerous studies (Nawaz and Nawaz, 2019; PeiZhi and Ramzan, 2020; Shahzad et al. , 2022) have examined the direct relationships between CG, CS and FP by considering only two of these variables at a time, ignoring the interaction that can exist between them.…”

Section: Literature Reviewmentioning

confidence: 99%

“…, 2018; Doorasamy, 2021). Additionally, existing literature (Nawaz and Nawaz, 2019; Shahzad et al. , 2022) about the relationships of CG and CS on FP is rare and inconclusive as it assumes, implicitly, that this relationship is direct and does not explore the combined impact of CS and CG on FP (Bashir et al.…”

Section: Introductionmentioning

confidence: 99%

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The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

Ronoowah¹,

Seetanah²

2023

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PurposeThis study aims to focus on the direct, mediating and moderating effects of corporate governance (CG) and capital structure (CS) in their relationships with firm performance (FP).Design/methodology/approachMultivariate panel data regression techniques are employed to analyse the direct, mediating and moderating impacts of the CG and CS on FP of 38 listed Mauritian non-financial companies from 2009 to 2019.FindingsThis study shows that CG has a positive but insignificant influence on return on equity (ROE) and Tobin's Q. CS has a significant negative impact on both ROE and Tobin's Q and supports the pecking order theory (POT). The interaction of CG and CS influences FP, but the strength of the moderating effects depends on the performance measure being used. Both CS and CG have no mediation effects in their relationship with FP measured by ROE and Tobin's Q.Practical implicationsThe results indicate that the combination of the high leverage ratio and good governance practices of companies can improve FP and increases investor confidence resulting in a positive reaction on their market share prices.Originality/valueThis paper contributes to the CG and CS literature by introducing a more precise and comprehensive research approach and is the first to attempt to extend CG and CS in their associations with FP by incorporating both CG and CS as profound moderator and mediator variables simultaneously in the same study.

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Section: 23mentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

Ronoowah¹,

Seetanah²

2023

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“…Previous research has investigated the relationships between CG, CS and FP but such research (Roy and Pal 2017 ; Nawaz K. and Nawaz A. 2019 ; Shahzad et al 2022 ) has analysed each association separately, in one direction, and using various mechanisms of CG.…”

Section: Literature Reviewmentioning

confidence: 99%

Corporate governance, capital structure, and firm performance: a panel VAR approach

Ronoowah

Seetanah

2022

SN Bus Econ

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This study aims to examine the interrelationships and interdependencies between corporate governance (CG), capital structure (CS), and firm performance (FP) of companies listed on the Stock Exchange of Mauritius from 2009 to 2019 along with a comparison between financial and non-financial firms. A panel vector autoregression (PVAR) approach is used in this study to determine the relationship dynamics between CG, CS and FP. The findings reveal a positive and significant bidirectional association between CS and FP, supporting the trade-off theory. The results also show that CG and FP jointly help to increase CS while CG and CS jointly boost the profitability of firms. A strong bidirectional relationship with varied signs between CG and CS is found only for financial firms. The results of the forecast error variance decomposition analysis support the selection of FP as the most endogenous variable. Robustness tests also support the findings. This study is the first to examine the dynamic and interdependent relationships using a PVAR model between CG, CS and FP that presents new contributions to the existing CG and CS literature with insights from an emerging economy.

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The Effect of Capital Structure on Corporate Performance: Panel Empirical Evidence of an Emerging Capital Market

Essel

2023

Journal of African Business

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Investigating the Effects of Capital Structure and Corporate Governance on Firm Performance: An Analysis of the Sugar Industry

Cited by 8 publications

References 80 publications

The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

The moderating and mediating effects of corporate governance and capital structure on firm performance: empirical evidence from an emerging market

Corporate governance, capital structure, and firm performance: a panel VAR approach

The Effect of Capital Structure on Corporate Performance: Panel Empirical Evidence of an Emerging Capital Market

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