What influences a bank's decision to go public?

Sermpinis, Georgios; Tsoukas, Serafeim; Zhang, Ping

doi:10.1002/ijfe.1740

Cited by 6 publications

(3 citation statements)

References 68 publications

(130 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The findings of these studies are contradictory and mixed, some suggesting a positive relationship (Ghosh et al 2000;Hadlock and James 2002;Roden and Lewellen 1995;Taub 1975) and some suggesting a negative relationship (Fama and French 1998;Gleason et al 2000) between leverage and profitability (El-Sayed Ebaid 2009). There are many studies on capital structure in the context of service sectors in Europe, USA, the Middle East and other parts of the world (Chakrabarti and Chakrabarti 2019;Choi et al 2018;Park and Jang 2018;Sardo et al 2020;Sermpinis et al 2019;Szemán 2017). Compared to other sectors, service sector capital structure research is at a nascent stage.…”

Section: Introductionmentioning

confidence: 99%

Capital Structure and Firm Performance in Australian Service Sector Firms: A Panel Data Analysis

Ahmed

Bhuyan

2020

JRFM

View full text Add to dashboard Cite

Using cross-sectional panel data over eleven years (2009–2019), or 1001 firm-year observations, this study examines the relationship between capital structure and firm performance of service sector firms from Australian stock market. Unlike other studies, in this study directional causalities of all performance measures were used to identify the cause of firm performance. The study finds that long-term debt dominates debt choices of Australian service sector companies. Although the finding is to some extent similar to trends in debt financed operations observed in companies in developed and developing countries, the finding is unexpected because the sectoral and institutional borrowing rules and regulations in Australia are different from those in other parts of the world.

show abstract

Section: Introductionmentioning

confidence: 99%

Capital Structure and Firm Performance in Australian Service Sector Firms: A Panel Data Analysis

Ahmed

Bhuyan

2020

JRFM

View full text Add to dashboard Cite

show abstract

“…There hasn't been any tangible, definitive empirical data in the literature about how liquidity influence capital structure of manufacturing firms in Nigeria up until now despite the use of many methodologies, variables, and theoretical frameworks. For instance, studies by Georgios et al (2019); Salehi et al (2019); and discovered a favorable correlation between corporate features and financial success. According to Neves et al (2020), there is a poor correlation between corporate attributes and financial performance.…”

Section: Introductionmentioning

confidence: 99%

The Evaluation of Liquidity and Capital Structure of Manufacturing Firms in Nigeria

Evinemi,

Emengini

2024

IJEFI

View full text Add to dashboard Cite

Firms' choices regarding their capital structure influence their net cost or value. Firm characteristics such as firm size, liquidity, growth opportunities, asset tangibility, non-debt tax shield and cost of equity are specific traits of firms. This study investigates the effect of firm liquidity on capital structure of manufacturing firms in Nigeria. Annual data was obtained from reports of thirty-one (35) manufacturing firms covering the period 2007-2021. The effects of liquidity on capital structure were examined using the panel Fixed/Random effect methods. The summary statistics, correlation analysis, slope heterogeneity and cross-sectional dependence were conducted as pre-estimation procedures. The study employed debt-to-equity and debt-to-asset ratios to capture capital structure, while cash conversion cycle in days was used to measure liquidity. The findings show that liquidity has negative significant relationship in explaining the debt-to-asset of manufacturing firms and no significant effect in explaining the debt-to-equity of manufacturing firms in Nigeria. The study recommends that manufacturing firms embrace innovation as a way of increasing the efficiency of the total assets. Also, manufacturing firms should formulate main policies, which support the implementation of positive cash flow.

show abstract

“…These firms possess specific characteristics, and the bond IPO brings substantial changes in terms of the agency relationships, information and monitoring environment of the firm (e.g., Booth, Cleary, & Purda, 2013; Datta et al, 2000; Halle & Santos, 2009). Research focusing on different aspects of stock IPO of firms shows that a stock IPO brings fundamental changes in the firms' internal and external environment (e.g., Aharony, Lin, & Loeb, 1993; An & Chan, 2008; Baker & Wurgler, 2000; Braun & Larrain, 2009; Gounopoulos & Pham, 2017; Serempinis, Tsoukas, & Zhang, 2019; Shi, Sun, & Zhang, 2018). Just like an equity IPO transforms a firm, so does the bond IPO.…”

Section: Introductionmentioning

confidence: 99%

Is the cost of equity a mere function of leverage? The case of bond IPOs

Al‐Khasawneh

Dion²,

Essaddam

et al. 2020

Int. J Fin Econ

View full text Add to dashboard Cite

In this paper, we investigate how undertaking a bond IPO influences a firm's cost of equity. Using a sample of nearly 600 firms that have gone through a bond IPO over the 1980-2014 period, we show that the change in the cost of equity that results is not just a function of leverage influencing the risk of residual owners. The information and monitoring environment, and agency relationships of a firm change significantly with its first public debt, and these changes can have a significant impact on the firm's cost of equity. We find that firms that have relatively high information asymmetry before they undertake the bond IPO experience less of a rise in their cost of equity than firms with relatively low information asymmetry consistent with these firms benefitting from improvements in their information environment as a result of the IPO. We also show that firms with high pre-bond IPO free cash flow see less of an increase in their cost of equity than firms with low pre-bond IPO free cash flow consistent with the disciplining mechanism of additional debt and the benefit from additional monitoring. In addition, we find that firms with poor corporate governance experience less of an increase in their cost of equity after the bond IPO than firms with better corporate governance. The evidence suggests that the change in the riskiness of equity after a firm goes through a bond IPO is much more complex than what is predicted by the leverage increase.

show abstract

What influences a bank's decision to go public?

Cited by 6 publications

References 68 publications

Capital Structure and Firm Performance in Australian Service Sector Firms: A Panel Data Analysis

Capital Structure and Firm Performance in Australian Service Sector Firms: A Panel Data Analysis

The Evaluation of Liquidity and Capital Structure of Manufacturing Firms in Nigeria

Is the cost of equity a mere function of leverage? The case of bond IPOs

Contact Info

Product

Resources

About