Morale and Debt Dynamics

2021 ◽  
Author(s):  
Daniel Barron ◽  
Jin Li ◽  
Michał Zator
Keyword(s):  
Dynamic Model ◽  
Business Strategy ◽  
Financial Resources ◽  
Employee Morale ◽  
Financial Leverage ◽  
Debt Dynamics ◽  
Profit Maximizing

This paper shows that debt undermines relational incentives and harms worker morale. We build a dynamic model of a manager who uses limited financial resources to simultaneously repay a creditor and motivate a worker. If the manager can divert or misuse revenue, then debt makes the manager less willing to follow through on promised rewards, leading to low worker effort. In profit-maximizing equilibria, the firm prioritizes repaying its debts, leading to gradual increases in effort and wages. These dynamics can persist even after debts have been fully repaid. Consistent with this analysis, we document that a firm’s financial leverage is negatively related to measures of employee morale, wages, and productivity. This paper was accepted by Joshua Gans, business strategy.

scholarly journals LINKING BALANCED SCORECARD MEASURES TO SMES’ BUSINESS STRATEGY: ADDRESSING THE MODERATING ROLE OF FINANCIAL RESOURCES

2015 ◽  
Vol 3 (12) ◽  
pp. 92-99
Author(s):  
Mahshid Lonbani ◽  
Saudah Sofian ◽  
Mas BambangBaroto
Keyword(s):  
Performance Measures ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Business Processes ◽  
Small And Medium Enterprises ◽  
Financial Resources ◽  
Financial Measures ◽  
Medium Enterprises ◽  
Moderating Role

Using financial and non-financial measures, the Balanced Scorecard (BSC) approach evaluates different aspects of firms’ performance: financial, customer, learning and growth, and internal business processes. Resource flexibility and availability of financial resources are basically highlighted as separate antecedents of company’s performance. Grounded on resource based view, the role of financial resources on business strategy has been addressed numerously in previous studies.  However, there is limited study to evaluate the role of financial resources on relationship between business strategy and BSC performance measures. Especially there is no study addressing this issue according to the moderating role of financial resources among small and medium enterprises (SMEs). It is worth mentioning that such relationships and models can be more highlighted in a developing countries since financial resources has been debated to be weak in theses context. Grounded in contingency theory, an evaluation of the moderating role that financial resources plays in the relationship between SMEs’ business strategy and balanced scorecard performance measures in SMEs points to the value of providing enough resources for SMEs. External fund providers such as banks and loan providers can help SMEs in this regard since firms could pass the way from business strategy to superior BSC performance measures more successfully.

scholarly journals Pengaruh Strategi Bisnis, Financial Leverage Terhadap Manajemen Laba Dengan Corporate Governance Sebagai Variabel Moderasi

2021 ◽  
Vol 3 (1) ◽  
pp. 203-217
Author(s):  
Husnaini Dwi Wanri ◽  
Erinos NR
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Business Strategy ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Financial Leverage ◽  
Strategy Variables

This study aims to examine the effect of business strategy and financial leverage as moderated by corporate governance in predicting real earnings management. This type of research is a causal association with a quantitative approach. The population used in this study are all manufacturing companies listed in Bursa Efek Indonesia 2016-2019. The sampling technique in this study using the purposive sampling technique, there are 80 manufacturing companies used as research samples. The business strategy variables are measured by the cost leadership strategy model for the current year. Earnings management variables are calculated by aggregating the triggering factors for earnings management, namely sales manipulation, overproduction, and discretionary spending. The leverage variable is calculated by the ratio of debt to assets and the moderating variable is measured by the proportion of share ownership by the managerial party. The data used in this study is secondary data obtained from the company's financial statements obtained from the official website of the Indonesia Stock Exchange and the official website of each company. The analytical method used is the multiple regression method which is processed using the SPSS 16 application. The results show that business strategy, financial leverage has a significant positive effect on real earnings management, CG can increase or weaken the relationship between business strategy, leverage on real earnings management but not significantly

E-Business Adoption by Jordanian Banks

2011 ◽  
pp. 1055-1070
Author(s):  
Ali Alawneh ◽  
Hasan Al-Refai ◽  
Khaldoun Batiha
Keyword(s):  
Business Strategy ◽  
Banking Sector ◽  
Financial Resources ◽  
Technology Readiness ◽  
Extended Model ◽  
It Professionals ◽  
Competition Intensity ◽  
Strategy Alignment ◽  
Toe Framework ◽  
Internal Operations

Grounded in the technology–organization–environment (TOE) framework, we have developed an extended model to examine factors, particularly technological, organizational and environmental factors, which influence e-business adoption in Jordanian banks. For the purposes of our research some constructs were added to (TOE) framework such as IT/Business strategy alignment, adequacy of IT professionals, and availability of online revenues. Other factors were excluded such as the global scope since our research is at the national level in Jordanian banking sector. The independent variables are the (technology readiness or competence, bank size, financial resources commitment, IT/Business strategy alignment, adequacy of IT professionals, availability of online revenues, competition intensity or pressure, and regulatory support environment) while e-business adoption and usage constitutes the dependent variable. Survey data from (140) employees in seven pioneered banks in the Jordanian banking sector were collected and used to test the theoretical model. Based on simple and multiple linear regressions, our empirical analysis demonstrates several key findings: (1) technology readiness is found to be the key determinant of e-business adoption among the banks. (2) Bank size, IT/Business strategy alignment, and availability of online revenues were found to have significant influence on the e-business adoption within banks, while financial resources commitment and adequacy of IT professionals do not contribute significantly to e-business adoption. (3) Both of the competition intensity and regulatory support environment contribute significantly to e-business adoption in banks. By providing insight into these important factors, this paper can help further understanding of their role in the adoption and usage of e-business and examines the impacts of e-business usage on banks’ performance in terms of sales-services-marketing, internal operations and coordination & communication. The theoretical and practical implications of these results are discussed. By extension, this could enable greater e-business usage in banks, which could improve the Jordanian overall economy.

E-Banking Diffusion in the Jordanian Banking Services Sector

2010 ◽  
pp. 1010-1026
Author(s):  
Ali Alawneh ◽  
Ezz Hattab
Keyword(s):  
Business Strategy ◽  
Financial Resources ◽  
Technology Readiness ◽  
Extended Model ◽  
Environmental Aspects ◽  
Banking Services ◽  
Services Sector ◽  
Strategy Alignment ◽  
Toe Framework ◽  
Internal Operations

Grounded in the technology–organization–environment (TOE) framework, we have developed an extended model to examine factors, particularly technological, organizational and environmental factors, which influence e-banking adoption in Jordanian banks. This article added some constructs to (TOE) framework, other factors were excluded. The independent variables are the (technology readiness or competence, bank size, financial resources commitment, IT/Business strategy alignment, adequacy of IT professionals, availability of online revenues, competition intensity or pressure, and regulatory support environment) while e-banking usage constitutes the dependent variable. Our empirical analysis demonstrates several key findings related to the technological, organizational, and environmental aspects of the banks. This article can help further understanding of their role in the adoption of e-banking and examines the impacts of e-banking usage on banks’ performance in terms of sales-services-marketing, internal operations and coordination & communication. This could enable greater e-banking usage that could improve the overall economy.

scholarly journals Company Value, Real Options and Financial Leverage

10.14311/798 ◽  
2006 ◽  
Vol 46 (1) ◽  
Author(s):  
O. Drahovzal
Keyword(s):  
Czech Republic ◽  
Financial Resources ◽  
Debt Ratio ◽  
Financial Leverage ◽  
The Czech Republic ◽  
Company Value ◽  
Total Debt ◽  
Points Of View ◽  
A Company

This paper deals with determining of the value of companies and financial leverage. The author tries to find the optimum debt ratio for selected companies in the Czech Republic. The method of yield option extension is used for evaluating a company. The DCFC method was selected as the yield method, due to its simplicity. The dynamic model used allows us to make changes in the debt ratio with recalculations of all parameters that depend on it. The assessment is made from two points of view: Firstly, the maximum of the total amount of financial resources, and, secondly, the maximum of the inverse sums of the ROE index and the ratio of equity to the value of the company. The values of the total debt ratio and the long-term debt ratio are shown as results. 

scholarly journals Título de pago diferido

LIBRE EMPRESA ◽  
2017 ◽  
Vol 14 (2) ◽  
pp. 105-129
Author(s):  
Luz Helena Carvajal Herrera ◽  
Isabel C. Barragán Arias ◽  
Camilo Quiñónez Avendaño
Keyword(s):  
Stock Market ◽  
Credit Risk ◽  
Financial System ◽  
Financial Structure ◽  
Profit Margin ◽  
Financial Resources ◽  
Working Capital ◽  
Financial Leverage ◽  
Short Term ◽  
Public Credit

The SMEs in Colombia are an economic engine and provide the 76% of employment (Supersociedades, Abril 2012). For to achieve growth and continuity they come to the financial system looking financial resources, with limited policies of credit risk for this target, with restrictive in amount and term; further the providers go on presents like a financial leverage working capital, with an implicit financial that impact on the profit margin and financial structure. The Colombian Ministry of Treasury and public credit, with the decrees 2555/2010 and 1019/2014 promotes the second market, an alternative in the inclusion of issuers to stock market and the opportunity to propose the “ Title Deferred Payment - TDP”, an instrument of leverage short term.

scholarly journals Assessing the financial performance of airlines in the Asia-Pacific region

2021 ◽  
Vol 18 (2) ◽  
pp. 234-244
Author(s):  
Carol C. Huang
Keyword(s):  
Financial Performance ◽  
Technical Change ◽  
Superior Performance ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Asia Pacific ◽  
Financial Resources ◽  
Pacific Region ◽  
Financial Leverage ◽  
Asia Pacific Region

In recent years, the aviation industry in the Asia-Pacific region has experienced rapid growth. Despite facing thin and volatile profit margins, the region’s airlines continue to expand their capacity by using high financial leverage, raising concerns of whether they are utilizing such financial leverage effectively and how it affects their stock performance. Using the global Malmquist productivity index and the conditional value-at-risk measure, this study investigates the financial performance of 22 Asia-Pacific-based airlines during 2016–2019. The empirical results reveal that only three full-service airlines were able to maintain continued improvement in financial efficiency during the sample period. The excessive use of financial leverage among low-cost carriers is documented. To assess the sources of financial inefficiency, this study decomposed the global Malmquist productivity index into two components: efficiency change and technical change. The results show that while there was a trend toward efficiency catch-up among the carriers, the number of airlines that demonstrated sufficient technical change declined significantly, indicating the need to implement technological innovation to deliver better financial outcomes. Regarding the airline’s stock return performance, airlines that achieved continuously superior performance in deploying financial resources also saw the lowest downside risk in their stock returns, reinforcing the importance of devoting more attention to indebtedness and the effectiveness with which financial resources are used. The findings of this study offer suggestions to airlines in managing their capital structure and enhancing their financial stability.

Sign in / Sign up

Export Citation Format

Share Document