The Joint Determinants of Capital Structure and Stock Rate of Return: A LISREL Model Approach

2019 ◽  
Vol 22 (02) ◽  
pp. 1950013
Author(s):  
Hong-Yi Chen ◽  
Cheng Few Lee ◽  
Tzu Tai
Keyword(s):  
Capital Structure ◽  
Stock Returns ◽  
Structural Equation ◽  
Equation Modeling ◽  
Financial Policy ◽  
Macroeconomic Factors ◽  
Managerial Entrenchment ◽  
Pricing Factors ◽  
Major Factors ◽  
The Capital Structure

We develop a simultaneous determination model of capital structure and stock returns. Specifically, we incorporate the managerial investment autonomy theory into the structural equation modeling with confirmatory factor analysis to jointly determine the capital structure and stock return. Besides attributes introduced in previous studies, we introduce indicators affecting a firm’s financing decision, such as managerial entrenchment, macroeconomic factors, government financial policy, and pricing factors. Empirical results show that stock returns, asset structure, growth, industry classification, uniqueness, volatility, financial rating, profitability, government financial policy, and managerial entrenchment are major factors of the capital structure.

scholarly journals MY BUSINESS AND I: ENTREPRENEUR PERSONALITY TRAITS AND CAPITAL STRUCTURE CHOICE

2020 ◽  
Vol 21 (6) ◽  
Author(s):  
KELMARA M. VIEIRA ◽  
VANESSA M. VALCANOVER ◽  
ANI C. G. POTRICH ◽  
EVERTON A. CAVALHEIRO
Keyword(s):  
Locus Of Control ◽  
Capital Structure ◽  
Personality Traits ◽  
Structural Equation ◽  
Risk Tolerance ◽  
Equation Modeling ◽  
Internal Locus ◽  
Internal Locus Of Control ◽  
The Government ◽  
The Capital Structure

ABSTRACT Purpose: This research seeks to identify how entrepreneurs’ personality traits can influence the capital structure of micro and small private businesses in Brazil, which are important for the economic growth and the subsistence of their owners. Originality/value: The study of the behavioral dimension of business decisions can help financial agents to better understand client behavior, including the adoption of mechanisms that identify possible risky or inefficient decisions made by managers based on their personality traits. It can also assist the government and institutions supporting micro and small private businesses in developing strategies to reduce the mortality of such companies. Design/methodology/approach: The proposed model involves 19 expected relationships that evaluate the relationships between the optimism, risk tolerance, sense of control (external and internal), attitude towards debt, and entrepreneur gender constructs. The sample includes 625 micro and small entrepreneurs in the state of Rio Grande do Sul, Brazil. Confirmatory factor analysis and structural equation modeling were performed. Findings: Results showed that attitude towards debt and gender were the most significant constructs and had a direct influence on the capital structure, while optimism and internal locus of control exerted a negative indirect influence, while risk tolerance had a positive indirect effect. Female managers demonstrated higher optimism and internal locus of control than male managers, but they had a worse attitude towards debt.

scholarly journals CORPORATE GOVERNANCE, CAPITAL STRUCTURE, AND CORPORATE INVESTMENT: AN EMPIRICAL STUDY ON PROPER MANUFACTURING INDUSTRY IN INDONESIA

2021 ◽  
Vol 19 (1) ◽  
pp. 130-140
Author(s):  
Gilda Maulina ◽  
◽  
Nila Firdausi Nuzula ◽  
Cacik Rut Damayanti ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Structural Equation ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Corporate Investment ◽  
Equation Modeling ◽  
Environmental Programs ◽  
Units Of Analysis ◽  
The Capital Structure

Investment is one of the most crucial decisions that a company must create to achieve higher financial performance and to maintain long-term sustainability. This study predicts that two significant factors determine corporate investment, i.e., the firms’ corporate governance and capital structure. The article also assumes that companies that are aware and engage in environmental programs would find it much easier to gain investors’. This study used 39 units of analysis of 13 manufacturers listed on the Indonesia Stock Exchange that received a good ranking in PROPER during the 2016-2018 period and analyzed with structural equation modeling (SEM). This study finds that corporate governance is negatively related to the capital structure but positively related to corporate investment. However, the capital structure does not affect corporate investment implying environmental performance’s significance in leading corporate governance and enhancing corporate investment. Further research can extend the observation period, use other sectors as the sample, use the different indicators in each variable, and develop the relationship between variables on a broader framework.

Do leverage decisions mediate the relationship between board structure and insolvency risk? A comparative mediating role of capital structure and debt maturity

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rana Yassir Hussain ◽  
Xuezhou Wen ◽  
Haroon Hussain ◽  
Muhammad Saad ◽  
Zuhaib Zafar
Keyword(s):  
Capital Structure ◽  
Structural Equation ◽  
Debt Maturity ◽  
Equation Modeling ◽  
Content Type ◽  
Insolvency Risk ◽  
Mediating Role ◽  
The Relationship ◽  
The Capital Structure

PurposeCorporate boards monitor managerial decisions as concluded by the monitoring hypothesis. In this scenario, the present study stresses that leverage decisions can be used as a tool to control insolvency risk.Design/methodology/approachThis study aims at investigating the intervention of capital structure and debt maturity on the relationship between corporate board composition and insolvency risk by employing Preacher and Hayes’s (2008) approach. The study sample comprises 284 firms from 2013 to 2017. Structural equation modeling is used to study the direct and indirect relationships among study variables.FindingsResults show that debt maturity is a significant mediator between CEO duality and insolvency risk and between board size and insolvency risk relationships. However, the capital structure did not mediate any of the proposed links.Research limitations/implicationsThis study suggests using more long-term debt to tackle insolvency risk in listed non-financial firms of Pakistan. It is also inferred that decisions regarding debt maturity are more crucial than capital structure decisions because insolvency risk is concerned.Originality/valueThis study evaluates the comparative mediating role of the debt maturity and the capital structure. Such role is uncommon in the literature addressing the relationship between governance variables and insolvency risk.

scholarly journals Capital structure of small, medium and micro enterprises: major factors for a developing economy

2019 ◽  
Vol 17 (2) ◽  
pp. 124-133
Author(s):  
Sharon Zunckel ◽  
Celani John Nyide
Keyword(s):  
Capital Structure ◽  
Structural Equation ◽  
Empirical Studies ◽  
Research Approach ◽  
Developing Economy ◽  
Firm Level ◽  
Cross Sectional ◽  
Major Factors ◽  
Micro Enterprises ◽  
The Capital Structure

Managing capital structure is an imperative decision made by all firms. The manner in which financing is organized is a strategic financial decision and managers must settle on the amount of debt in relation to equity that it requires to maintain. Despite many empirical studies investigating the choice of capital structure for large corporates, minimal research has been conducted on capital structure decisions in small, medium, and micro enterprises (SMMEs). This study identifies major factors influencing the capital structure of SMMEs in a developing economy and enlightens owners/managers on the importance thereof. This investigation used a quantitative research approach, which was cross-sectional. A convenience sampling method was adopted, and data were collected from 136 respondents, only confined to the retail and whole sector, which is the second largest sector in KwaZulu-Natal, South Africa. The partial least squares structural equation modelling was utilized to determine the statistical results. It was discovered that managerial factors such as individual goals and financing preference of the owner/manager, network ties, attitude to debt, maintaining control and asymmetric information; and firm-level factors such as size of the firm, profitability and firm age are major factors that influence the capital structure of SMMEs. Therefore, capital structure decisions are made motivated by the attitudes of the owners/managers.

scholarly journals Komparasi Faktor Fundamental Mikro dan Makro Ekonomi in Jakarta Islamic Index dan Lq-45

2021 ◽  
Vol 7 (1) ◽  
pp. 484
Author(s):  
Zelivieska Bintang Maharani
Keyword(s):  
Stock Returns ◽  
Capital Market ◽  
Stock Prices ◽  
Stock Price ◽  
Structural Equation ◽  
Stock Exchange ◽  
Equation Modeling ◽  
Macroeconomic Factors ◽  
Analysis Technique ◽  
Significant Difference

The capital market in Indonesia has developed rapidly in line with the entry of the Islamic capital market. On the Indonesia Stock Exchange, there are Islamic and conventional stocks. In this study, the object of research is the Jakarta Islamic Index and LQ-45 stocks in 2015-2017. The purpose of this research is to compare the fundamental micro and macroeconomic factors and their effects on stock prices and stock returns. In selecting the sample, this study used a purposive sampling method, where the number of samples in this study were 15 companies Jakarta Islamic index and 13 companies LQ-45. The test uses the analysis technique of Structural Equation Modeling (SEM) to see how much influence the variables have and the comparison test with the Mann Whitney test. The results of this study indicate that only microeconomic factors have a significant effect on stock prices in the Jakarta Islamic index and LQ-45. The results also show that there is a significant difference between the micro-fundamental factors in the Jakarta Islamic index and LQ-45. Meanwhile, there is no significant difference in macro factors. Keywords: Micro Economy, Macro Economy, Stock Price, Stock Return

scholarly journals EFEK INTERVENING STRUKTUR MODAL PADA PENGARUH UKURAN PERUSAHAAN TERHADAP PROFITABILITAS

2020 ◽  
Vol 11 (2) ◽  
pp. 137-147
Author(s):  
I Made Purba Astakoni ◽  
Ni Putu Nursiani
Keyword(s):  
Capital Structure ◽  
Firm Size ◽  
Structural Equation ◽  
Partial Least Square ◽  
Least Square ◽  
Equation Modeling ◽  
Significant Positive Effect ◽  
Manufacturing Companies ◽  
Positive Effect ◽  
The Capital Structure

Abstract The objectives of this study are (1). (2) Analyzing the influence of firm size on profitability, (3) Analyzing the effect of capital structure on profitability, (4) Analyzing the role of capital structure variables in influencing the influence of firm size on profitability. The population in this study were all manufacturing companies in the Cosmetics and Household Purposes Sector listed on the Indonesia Stock Exchange (IDX). The total population in this study is 6 manufacturing companies in the cosmetics sector and household needs. Based on predetermined criteria, the number of samples is 3 companies, so the data analyzed is panel data with a total of 18 observations. Data analysis techniques use the Partial Least Square (PLS) approach. PLS is a model of Structural Equation Modeling (SEM) based on components or variants. PLS is a powerful analytical method because it is not based on many assumptions. The results of analysis and hypothesis testing indicate; The first hypothesis states that there is a significant positive effect on firm size on capital structure. The results of the analysis found that the size of the company had no significant positive effect on the capital structure so that the first hypothesis was not acceptable. The second hypothesis states that there is a significant positive effect on firm size on profitability. The results of the analysis found that the size of the company had no significant positive effect on profitability so that the second hypothesis was not acceptable. The third hypothesis which states there is a significant positive effect of capital structure on profitability. The results of the analysis found that the capital structure had a significant positive effect on profitability so that the third hypothesis could be accepted. In testing with the Sobel test it was found that the capital structure has not been tested as an intervening variable on the effect of firm size on profitability in the Cosmetics and Household Utilities manufacturing companies listed on the Indonesia Stock Exchange (IDX). Keywords: Company size; capital structure; profitability Abstrak Tujuan dari penelitian ini adalah (1). Menganalisis pengaruh ukuran perusahaan terhadap struktur modal, (2)Menganalisis pengaruh ukuran perusahaan terhadap profitabilitas, (3) Menganalisis pengaruh struktur modal terhadap profitabilitas,(4)Menganalisis peran variabel struktur modal dalam mengintervening pengaruh ukuran perusahaan terhadap profitabilitas. Populasi dalam penelitian ini adalah seluruh perusahaan manufaktur Sektor Kosmetik dan Keperluan Rumah Tangga yang terdaftar di Bursa Efek Indonesia (BEI). Adapun jumlah populasi dalam penelitian ini sebanyak 6 perusahaan manufaktur sektor kosmetik dan keperluan rumah tangga. Berdasarkan kriteria yang telah ditetapkan maka jumlah sampel sebanyak 3 perusahaan, sehingga data yang dianalisis merupakan data panel dengan jumlah observasi sebanyak 18. Teknik analisis data menggunakan pendekatan Partial Least Square (PLS). PLS adalah model persamaan Structural Equation Modeling (SEM) yang berbasis komponen atau varian. PLS merupakan metode analisis yang powerfull karena tidak didasarkan pada banyak asumsi.Hasil analisis dan pengujian hipotesis menunjukkan; Hipotesis pertama yang menyatakan terdapat pengaruh signifikan positif ukuran perusahaan terhadap struktur modal . Hasil analisis menemukan ukuran perusahaan berpengaruh tidak signifikan positif terhadap struktur modal sehingga hipotesis pertama tidak dapat diterima. Hipotesis kedua yang menyatakan terdapat pengaruh signifikan positif ukuran perusahaan terhadap profitabilitas . Hasil analisis menemukan ukuran perusahaan berpengaruh tidak signifikan positif terhadap profitabilitas sehingga hipotesis kedua tidak dapat diterima. Hipotesis ketiga yang menyatakan terdapat pengaruh signifikan positif struktur modal terhadap profitabilitas . Hasil analisis menemukan struktur modal berpengaruh signifikan positif terhadap profitabilitas sehingga hipotesis ketiga dapat diterima. Pada pengujian dengan uji Sobel didapat bahwa struktur modal belum teruji sebagai sebagai variabel intervening pada pengaruh ukuran perusahaan terhadap profitabilitas pada perusahaan manufaktur Sektor Kosmetik dan Keperluan Rumah Tangga yang terdaftar di Bursa Efek Indonesia (BEI). Kata Kunci: Ukuran perusahaan; struktur modal; profitabilitas

From physical to virtual store: factors that spur Bangladeshi manufacturers/retailers to introduce multi-channel retailing

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Thohidul Karim ◽  
Xu Qi
Keyword(s):  
Developing Countries ◽  
Technology Acceptance ◽  
Consumer Satisfaction ◽  
Structural Equation ◽  
Developed Countries ◽  
Point Of View ◽  
Equation Modeling ◽  
Content Type ◽  
Business Innovation ◽  
Major Factors

Purpose Multi-channel business operations are standard practice in most business contexts today. The popularity of multi-channel adoption among developing countries is growing fast. In Bangladesh, the retailers who adopted multi-channel retailing have been getting a very good response from the consumers. This study aims to understand the factors that influence manufacturers’ decisions to adopt multiple channels in Bangladesh. The authors applied an extended technology acceptance model with three variables: business innovation, business competition and consumer satisfaction. Design/methodology/approach Partial least squares-structural equation modeling was applied to test the data collected from 157 companies and relevant hypotheses. Findings The study findings show that Bangladeshi manufacturers are positive about, and expect benefits from, applying the new channel. The study also revealed that customer satisfaction considerably affects multi-channel adoption in Bangladesh. Similarly, business innovation and business competition play a significant role in introducing multiple business channels. Research limitations/implications This research was conducted in Bangladesh, and data are collected from Dhaka and Chittagong that may limit the generalizability of findings. Practical implications The research goal was to understand a manufacturer’s perception to adopt multi-channel in business. The proposed research model was able to address the major factors that drive a manufacturer to introduce multiple business channels, especially in Bangladesh. Originality/value Many research and case studies have been done the past couple of decades, but most of them are consumer oriented. Little research has been done to investigate a manufacturer’s point of view adapting innovation in business. Though some research articles are available online, most of them from developed countries. So, the study’s goal was to study developing countries scenario; thus, the authors choose Bangladesh.

scholarly journals Analisis Struktur Kepemilikan, Faktor Eksternal, Internal Terhadap Struktur Modal, Dividen, Nilai Perusahaan Manufaktur

2020 ◽  
Vol 30 (6) ◽  
pp. 1484
Author(s):  
Nurianah Nurianah ◽  
Muslich Anshori
Keyword(s):  
Capital Structure ◽  
Ownership Structure ◽  
Firm Value ◽  
Structural Equation ◽  
Dividend Policy ◽  
Stock Exchange ◽  
External Factors ◽  
Equation Modeling ◽  
Internal Factors ◽  
Company Value

This study discusses and analyzes the Ownership Structure, External Factors, Internal Against Capital Structure, Dividends and Company Value. The population used in this study is companies listed on the Indonesia Stock Exchange using 37 companies. The data used are from 2010 to 2019, this study uses descriptive statistical analysis and inference with Structural Equation Modeling (SEM). The analysis shows: ownership structure does not oppose capital structure, dividend policy, and firm value, external factors affect internal factors, external factors do not oppose capital structure, external factors do not significantly influence firm value, internal factors related to capital structure, factors internal does not oppose dividend policy, internal factors oppose company value, capital structure opposes dividend policy, dividend policy has no effect on capital structure, capital structure is related to company value, and dividend policy is related to company value. Keywords: Ownership Structure; External and Internal Factors; Dividend Policy; Manufacture.

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