The cultural dimension in companies' leverage. New evidence using panel data for a European macroeconomic context

Neves, Maria Elisabete Duarte; Almeida, Daniela; Vieira, Elisabete

doi:10.1108/ccsm-10-2021-0180

Cited by 3 publications

(3 citation statements)

References 111 publications

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“…The mean leverage of banks is 3.35%, reflecting the proportion of Indonesian banks' assets funded by non-deposit and deposit liabilities. The average leverage in Indonesian banks is higher than in previous studies on non-financial companies in other countries, such as Neves et al (2022); Al-Ahdal et al (2020). However, it is lower than the average for banks in other countries like Pakistan (Sheikh & Qureshi, 2017).…”

Section: Descriptive Statisticscontrasting

confidence: 63%

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Cultural determinants of capital structure in Indonesian banking

Saleh,

Isnurhadi,

Malinda

et al. 2024

irjmis

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Capital structure decisions play a crucial role in shaping the financial landscape of companies, especially in developing countries. This study examines the cultural determinants of capital structure in Indonesian banking within the macroeconomic context from 2013 to 2022. The capital structure represents the mix of various company funding methods, impacting its value and influencing stakeholders. The debate on how the interplay of debt and assets affects a company's value continues, with the determining factors of capital structure still being explored in financial studies. Using STATA V.17, this research analyzes 30 banking companies listed on the Indonesia Stock Exchange, with leverage as the dependent variable. Financial ratios, including liquidity ratio, profit volatility, growth opportunities, bank size, and external macroeconomic variables such as inflation and Gross Domestic Product (GDP), are examined as potential influencers on the capital structure. The results reveal high leverage in Indonesian banks, with variations in financial approaches. Return on assets, growth opportunities, and inflation exhibit a positive and significant relationship with leverage, while profit volatility, tangibility, bank size, and GDP show a negative and significant relationship. The research suggests limitations in scope, recommending including all Indonesian banking companies and additional external macroeconomic variables like exchange and interest rates.

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Section: Descriptive Statisticscontrasting

confidence: 63%

“…The capital structure signifies the amalgamation of various funding sources a company manages (Neves et al, 2022). The financing decisions directly impact the company's value, making it relevant for investors, directors, and other stakeholders (Puspitasari, 2022).…”

Section: Introductionmentioning

confidence: 99%

Cultural determinants of capital structure in Indonesian banking

Saleh,

Isnurhadi,

Malinda

et al. 2024

irjmis

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“…The literature grants different signs and significance between size and debt levels (L opez-Gracia and Sogorb-Mira, 2008;Neves et al, 2022bNeves et al, , 2023. Since Kraus and Litzenberger (1973), with their trade-off theory, several authors showed a positive relationship between company size and debt, given that larger companies have less information asymmetry and, consequently, incur lower risks of bankruptcy (Serrasqueiro, 2008).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

What factors impact debt levels in the health sector? Evidence for a bank system-oriented country

Neves,

Proença,

Cancela

et al. 2024

MRJIAM

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Purpose The purpose of this study is to examine the determinants of the level of indebtedness in the health sector in Portugal, taking into account the effects of the COVID-19 pandemic. At the same time, an attempt is made to understand whether the effect of a pandemic crisis is similar to that of a financial crisis. Design/methodology/approach To achieve this aim, two subperiods were analyzed: a global period between 2011 and 2020 that includes the pandemic crisis and the period between 2011 and 2014, designated as the financial assistance period by the “Troika” in Portugal. For a sample of 514 companies belonging to the NACE code: 86100 – activities of the health sector with hospitalization, the panel data methodology was applied, specifically, the generalized method of moments system proposed by Arellano and Bover (1995) and Blundell and Bond (1998). Findings The results of the study are in line with the Pecking-order explanatory theory, demonstrating that companies in this sector follow a financing hierarchy, preferentially resorting to internally generated funds and external debt. Additionally, the results reveal that the capital structure of companies has changed due to the COVID-19 pandemic. As for the period of financial assistance, there are no major differences in evidence when the total debt ratio is considered. The results suggest different impacts when it comes to a bear market period caused by a health crisis or a period of growing economic slowdowns. Originality/value As far as we know, this is the first study that analyses the debt levels in the context of the health sector in a country with a financial system based on the bank sector, using short- and long-term debt ratios, taking into account the particularities of two different moments considered to be bear market that may eventually be useful for comparison with other bear market moments in other macroeconomic environments.

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Differences in capital structure between public and private hospitals: new evidence from a small country banking system using panel data

Neves,

Ferreira,

Serrasqueiro

et al. 2024

JHOM

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Purpose The objective of this article is to study the factors influencing the leverage and debt maturity of 48 Public Entities and 297 Private Entities, in the health sector in Portugal, in the period between 2015 and 2021, including the pandemic crisis, coronavirus disease 2019.Design/methodology/approach To test the proposed hypotheses, the panel data methodology was used, considering the GMM (Generalized Method of Moments) system estimation method.Findings Our findings suggest that in times of crisis, both public and private entities resort to long-term loans to finance additional expenses and guarantee the continuity of health services. Also, there is a strong dependence on short-term debt (short leverage [SLEV]), especially in the public sector, suggesting some financial imbalance in current management, with no margin of financial security. In private hospitals, a more considered strategic definition is demonstrated, without current management risks.Originality/value As far as the authors are aware, this article is original and covers an important gap in the literature when considering the determinants of debt maturity in public and private hospitals in Portugal, a country where the debate about the essence of the National Health System, it’s in the news every day.

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The cultural dimension in companies' leverage. New evidence using panel data for a European macroeconomic context

Cited by 3 publications

References 111 publications

Cultural determinants of capital structure in Indonesian banking

Cultural determinants of capital structure in Indonesian banking

What factors impact debt levels in the health sector? Evidence for a bank system-oriented country

Differences in capital structure between public and private hospitals: new evidence from a small country banking system using panel data

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