What are the reliably important determinants of capital structure in china?

Chang, Chun; Chen, Xin; Liao, Guanmin

doi:10.1016/j.pacfin.2014.06.001

Cited by 109 publications

(89 citation statements)

References 31 publications

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“…Regarding corporate performance, we control for the scale of business ( SIZE it ), as the bigger scale of the business may reduce business risk due to its diversified operations. We also control for financial leverage ( LEV it ) and profitability ( ROA it ) as higher financial leverage may increase business risk and higher profitability may decrease business risk (Chang, Chen, & Liao, ; S. G. H. Huang & Song, ). Regarding corporate governance, we control the ownership concentration ( TOP it ), board size ( BOARD it ), and board structure ( OUTDIR it ), because these governance features can affect the corporate strategy (Bentley et al, ).…”

Section: Methodsmentioning

confidence: 99%

Corporates' strategic responses to economic policy uncertainty in China

Mirza¹,

Ahsan

2019

Bus Strat Env

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Using a novel news-based index of economic policy uncertainty, this paper studies the impact of economic policy uncertainty on corporate strategic positioning and corporate risk in China from 2009 to 2015. The study also investigates the impact of corporate strategic positioning on corporate risk. The results show that corporate strategic positioning and economic policy uncertainty have a significant positive impact on corporate risk. The results also explain that economic policy uncertainty increases the market risk of the firms irrespective of their corporate strategy. However, it increases the business risk of prospector firms and decreases the business risk of defensive firms. The study may help the firms to formulate and improve their strategic positioning while considering economic policy uncertainty. Our results are robust to alternate proxies of economic policy uncertainty and corporate risk.

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Section: Methodsmentioning

confidence: 99%

Corporates' strategic responses to economic policy uncertainty in China

Mirza¹,

Ahsan

2019

Bus Strat Env

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“…Furthermore, they do not provide any survey evidence to bridge the gap between theories and practice. 5 For example, empirical capital structure papers published in the leading Asia Pacific journals between 2011 and 2015 include Tan, Lee and Faff (2015); Gao and Zhu (2015); Alcock and Steiner (2015); Mohamed, Masih and Bacha (2015); Huang (2014); Arqawi, Bertin, and Prather (2014) ;Chang, Chen, and Liao (2014) ;Smith, Chen and Anderson, (2015); Alcock, Steiner and Tan (2014) ;Lam, Zhang, and Lee (2013);Zhu (2013); O'Connor and Flavin (2013);Zhang (2012);Zhu (2012) ;Goyal, Nova, and Zanetti (2011);and Pindado and De La Torre (2011). Second, the surveys that have been conducted in the field to date focus mainly on the financial behaviour of U.S. firms, with only limited investigation of other countries, and very little consideration of the Australian practice, especially after the most recent Global Financial Crisis (GFC). 6 So far, international surveys do not always find consistency across responses by Chief Financial Officers (CFOs) to capital structure decisions across countries.…”

Section: Introductionmentioning

confidence: 99%

A Contemporary View of Corporate Finance Theory, Empirical Evidence and Practice

2015

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This paper uses a survey of Australian Corporate Treasurers to shed light on the gap between the theory and practice of corporate finance in Australia. Seven areas are examined: capital structure, payout policy, cash holdings, initial public offerings, seasoned equity offering, mergers and acquisitions, and corporate governance. We also exploit the Global Financial Crisis to examine the effect of liquidity shocks on a firm's capital structure choices. We then compare our Australian survey results with results from a comprehensive U.S. survey conducted by Graham and Harvey (2001). Our survey shows that the board of directors play the most important role in determining capital structure decisions and that corporate treasurers play the most important role in cash holding decisions. This contrasts with the academic literature that has typically focused on the role of CEO in both capital structure and cash holdings decisions. In addition, our respondents do not view the tax advantage of interest deductibility to be of first order of importance for debt issuance choices, which contrasts with most of the U.S. empirical studies. Finally, we juxtapose the theory-practice perspective, with a review of the most recent five years (2011)(2012)(2013)(2014)(2015) of corporate finance research published in the leading Asia Pacific Basin finance journals. Abstract This paper uses a survey of Australian Corporate Treasurers to shed light on the gap between the theory and practice of corporate finance in Australia. Seven areas are examined: capital structure, payout policy, cash holdings, initial public offerings, seasoned equity offering, mergers and acquisitions, and corporate governance. We also exploit the Global Financial Crisis to examine the effect of liquidity shocks on a firm's capital structure choices. We then compare our Australian survey results with results from a comprehensive U.S. survey conducted by Graham and Harvey (2001). Our survey shows that the board of directors play the most important role in determining capital structure decisions and that corporate treasurers play the most important role in cash holding decisions. This contrasts with the academic literature that has typically focused on the role of CEO in both capital structure and cash holdings decisions. In addition, our respondents do not view the tax advantage of interest deductibility to be of first order of importance for debt issuance choices, which contrasts with most of the U.S. empirical studies. Finally, we juxtapose the theory-practice perspective, with a review of the most recent five years (2011)(2012)(2013)(2014)(2015) of corporate finance research published in the leading Asia Pacific Basin finance journals.

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“…To approximate the influence of the variables on firm debt policy, we manipulate the following models (Laura and Viorela, 2014;Chun, Xin and Guanmin, 2014). ).…”

Section: The Modelsmentioning

confidence: 99%

Factors Explaining Debt Firm Policy: A Comparison between Five Intercontinental Countries

Hatem

2017

BER

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We test the factors explaining the debt policy of firms across five continents. To this end, we examine samples from South Africa, Australia, Brazil, India and Spain over a period of 8 years from 2003 to 2010. The results manipulate differences in debt policy for all countries (except for the variable Return on Assets, ROA). As for the effect of activity sectors on firm debt policy, higher performance led to lower firm debt ratios. Furthermore, we concluded some differences in other variables. Higher tangibility ratios for firms from South Africa, India and Spain led to higher capital structure ratios. Larger firms from Brazil led to lower short term debt ratio. We could not find evidence on the effect of firm growth opportunities in Brazil and India. Furthermore, we concluded to a positive and a statistically significant effect of liquidity ratio for Australia and India, and a positive and a statistically significant effect of firm age for firms from Spain.

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What are the reliably important determinants of capital structure in china?

Cited by 109 publications

References 31 publications

Corporates' strategic responses to economic policy uncertainty in China

Corporates' strategic responses to economic policy uncertainty in China

A Contemporary View of Corporate Finance Theory, Empirical Evidence and Practice

Factors Explaining Debt Firm Policy: A Comparison between Five Intercontinental Countries

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