scholarly journals The impact of political instability on risk‐taking in the banking sector: International evidence using a dynamic panel data model (System‐GMM)

2019 ◽  
Vol 40 (8) ◽  
pp. 891-906 ◽  
Author(s):  
Hamed Rezgallah ◽  
Nesrin Özataç ◽  
Salih Katircioğlu
Keyword(s):  
Risk Taking ◽  
Data Model ◽  
Banking Sector ◽  
Model System ◽  
Dynamic Panel Data ◽  
Panel Data Model ◽  
Dynamic Panel ◽  
Dynamic Panel Data Model ◽  
International Evidence ◽  
The Impact

The impact of leverage on discretionary investment: African evidence

2018 ◽  
Vol 9 (1) ◽  
pp. 108-125 ◽  
Author(s):  
Edson Vengesai ◽  
Farai Kwenda
Keyword(s):  
Panel Data ◽  
Data Model ◽  
Cash Flows ◽  
Dynamic Panel Data ◽  
Investment Policy ◽  
Panel Data Model ◽  
Dynamic Panel ◽  
Content Type ◽  
Dynamic Panel Data Model ◽  
The Impact

Purpose The purpose of this paper is to explore the impact of leverage on firms’ discretionary investment in Africa. Design/methodology/approach The authors employ a dynamic panel data model estimated with generalised method of moments (GMM) estimation techniques on the panel data of listed African non-financial firms. A dynamic model and the generalised methods of moments estimations are handy in controlling for unobserved heterogeneity, endogeneity, autocorrelation, heteroscedasticity, etc. Findings In spite of different settings, markets, leverage levels and methodologies, the authors found evidence that leverage constrains investment in African firms. The negative impact is more pronounced in firms with low-growth opportunities than in firms with high-growth opportunities. The results are inclined to the theory that leverage plays a disciplinary role to avoid overinvestment. Research limitations/implications African firms’ investment policy does not solely depend on the neoclassical fundamentals determinants of profitability, net worth and cash flows. Financing strategy also has a considerable bearing on the investment policy. The results provide evidence that leverage is a negative externality to the firm’s discretional investment policy for both lowly levered and highly leveraged firms. African firms’ should consider maintaining their low debt levels and rely more on internally generated funds so as not to suppress any available cash flows to interest payments and loan covenants from debt holders. Originality/value The study contributes to the literature on investment and financial leverage by the authors providing evidence from Africa, a developing continent, that has not been explored. It shows how conservative leverage levels of African firms, which have been reported to be rising, are impacting on investments. Pertaining to empirical methodology, the authors employ a dynamic panel data model, the GMM estimation technique, which is robust in controlling endogeneity, and a possible bi-directional causality between leverage and investment which have not been used in literature. The study also enables a comparison of the effect of high leverage and low leverage on firm’s discretional investment.

Estimation of a Censored Dynamic Panel Data Model

Econometrica ◽  
2002 ◽  
Vol 70 (6) ◽  
pp. 2499-2517 ◽  
Author(s):  
Luojia Hu
Keyword(s):  
Panel Data ◽  
Data Model ◽  
Dynamic Panel Data ◽  
Panel Data Model ◽  
Dynamic Panel ◽  
Dynamic Panel Data Model

scholarly journals Dynamic Panel Data Model for Investment, Real Value and Capital Stock Data

2007 ◽  
Vol 3 (1) ◽  
pp. 13
Author(s):  
G. R. Pasha ◽  
Muhammad Aslam ◽  
Muhammad Abdullah
Keyword(s):  
Panel Data ◽  
Data Model ◽  
Capital Stock ◽  
Dynamic Panel Data ◽  
Panel Data Model ◽  
Dynamic Panel ◽  
Dynamic Panel Data Model ◽  
Real Value
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