The Impact of the Capital Structure on the Performance of Companies – Evidence from Albania

This paper aims to examine the impact of external credit ratings on the financial decisions of the firms in Pakistan. This study uses the annual data of 70 non-financial firms for the period 2012-2018. It uses ordinary least square (OLS) to estimate the impact of credit rating on capital structure. The results show that rated firm has a high level of leverage. Moreover, Profitability and tanagability are also found to be a significantly negative determinant of the capital structure, whereas, size of the firm has a significant positive relationship with the capital structure of the firm. Besides, there exists a non-linear relationship between the credit rating and the capital structure. The rated firms have higher leverage as compared to the non-rated firms. The high and low rated firms have a low level of leverage, while mid rated firms have a higher leverage ratio. The finding of the study have practical implications for the manager; they can have easier access to the financial market by just having a credit rating no matter high or low. Policymakers must stress upon the rating agencies to keep improving themselves as their rating severs as the measure to judge the creditworthiness of the firm by both the investors and management as well.

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The Impact of CSR on the Capital Structure of High-Tech Companies in Poland

Sustainability ◽

10.3390/su13105467 ◽

2021 ◽

Vol 13 (10) ◽

pp. 5467

Author(s):

Barbara Grabinska ◽

Dorota Kedzior ◽

Marcin Kedzior ◽

Konrad Grabinski

Keyword(s):

Capital Structure ◽

Financial Reporting ◽

Academic Research ◽

Debt Financing ◽

High Tech ◽

High Tech Industry ◽

Reporting Practices ◽

Csr Reporting ◽

The Impact ◽

The Capital Structure

So far, CSR’s role in the high-tech industry is not fully explained by academic research, especially concerning the most burdensome obstacle to firms’ growth: acquiring debt financing. The paper aims to solve this puzzle and investigate whether young high-tech companies can attract more debt by engaging in CSR activity. To address the high-tech industry specificity, we divided CSR-reporting practice into three broad categories: employee, social, and environmental and analyzed their impact on the capital structure. Our sample consists of 92 firm-year observations covering the period 2014–2018. Using a regression method, we found out that only employee CSR plays a statistically significant role in shaping capital structure. We did not find evidence for the influence of the other types of CSR-reporting practices. The results suggest that employees are the key resource of high-tech companies, and, for this reason, they are at the management’s focus. This fact is visible at the financial reporting level and, as we interpret results, is also considered by credit providers. In a more general way, our results suggest that firms tend to choose CSR based on the importance of crucial resources.

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Determinants of Capital Structure within the Context of Corporate Governance in Egypt

International Journal of Business and Management ◽

10.5539/ijbm.v13n8p26 ◽

2018 ◽

Vol 13 (8) ◽

pp. 26 ◽

Cited By ~ 1

Author(s):

Hanaa A. El-Habashy

Keyword(s):

Corporate Governance ◽

Capital Structure ◽

Emerging Economy ◽

Managerial Ownership ◽

Listed Firms ◽

Western Countries ◽

Specific Factors ◽

The Impact ◽

The Capital Structure

This study aims to investigate the characteristics of corporate governance that impact the capital structure decisions in listed firms in Egypt, to test the efficiency of the research results conducted in the developed Western countries in an emerging economy. A sample of 240 observations from the most active non-financial companies collected in the period 2009-2014 was used for hypothesis testing. Multiple regression models (OLS) were used for data analysis. Seven variables are used in measuring the attributes of corporate governance; they are the managerial ownership, institutional shareholding, shares owned by a large block, board size, board composition, separation of CEO/Chair positions and audit type. Four ratios were calculated for measuring the capital structure, they are long-term and short-term debt to assets, total debt to assets and debt to equity. The results suggest that corporate governance attributes have a significant impact on the capital structure decisions of listed Egyptian companies. In addition, firm-specific factors such as profitability, tangibility, growth opportunities, corporate tax, firm size and non-debt tax shields influence the choice of capital structure in Egypt. The results showed the same relationship with what was obtained in developed Western countries. The paper offers some contribution in the literature and helps to understand the impact of corporate governance on Egypt's capital structure as an emerging economy.

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The Impact of Flexibility on the Capital Structure

E-conom ◽

10.17836/ec.2013.2.128 ◽

2013 ◽

Vol 2 (2) ◽

pp. 128-140

Author(s):

Ádám Czelleng

Keyword(s):

Capital Structure ◽

The Impact ◽

The Capital Structure

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The impact of operating leverage on the capital structure of Johannesburg Stock Exchange-listed firms before and after the 2008 global financial crisis

Journal of Economic and Financial Sciences ◽

10.4102/jef.v11i1.164 ◽

2018 ◽

Vol 11 (1) ◽

Author(s):

Matabane T. Mohohlo ◽

Johan H. Hall

Keyword(s):

Financial Crisis ◽

Capital Structure ◽

South African ◽

Global Financial Crisis ◽

Stock Exchange ◽

Johannesburg Stock Exchange ◽

The Global Financial Crisis ◽

Operating Leverage ◽

The Impact ◽

The Capital Structure

The financial leverage-operating leverage trade-off hypothesis states that as financial leverage increases, management of firms will seek to reduce the exposure to operating leverage in an attempt to balance the overall risk profile of a firm. It is the objective of this study to test this hypothesis and ascertain whether operating leverage can indeed be added to the list of factors that determine the capital structure of South African firms. Forty-six firms listed on the Johannesburg Stock Exchange between 1994 and 2015 are analysed and the impact of operating leverage is determined. The results are split into two periods, that is, the period before the global financial crisis (1994–2007) and after the global financial crisis (2008–2015). The impact of operating leverage during these two periods is then compared to determine whether a change in the impact of operating leverage on the capital structure can be observed especially following the crisis. The results show that the conservative nature of South African firms leading up to 2008 persisted even after the global financial crisis. At an industry level, the results reveal that operating leverage does not have a noticeable impact on capital structure with the exception of firms in the industrials sector of the South African economy.

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The Impact Of Dividend Policy, Managerial Ownership, Institutional Ownership To Capital Structure On Manufacturing Company In Indonesia Stock Exchange (Idx) Period 2012-2016

Journal of Business and Behavioural Entrepreneurship ◽

10.21009/jobbe.002.1.04 ◽

2018 ◽

Vol 2 (1) ◽

pp. 28-39

Author(s):

Ratna Putri Indah Puspita ◽

Suherman Suherman

Keyword(s):

Capital Structure ◽

Dividend Policy ◽

Random Effect Model ◽

Institutional Ownership ◽

Managerial Ownership ◽

Manufacturing Companies ◽

Significant Negative Effect ◽

Negative Effect ◽

The Impact ◽

The Capital Structure

This study aims to determine the effect of dividend policy, managerial ownership and institutional ownership on the capital structure of manufacturing companies listed on the IDX for the 2012-2016 period. The data used in this study is an annual report of the Manufacturing Sector listed on the IDX for the period 2012-2016. By using purposive sampling method, 56 companies were obtained and consisted of 280 observations. The model used in this research is panel data analysis using the Random Effect Model approach. The results of this study indicate that the dividend policy has a positive but not significant effect on DER, but has a significant positive effect on DAR. While managerial ownership is influential but not significantly negative on the capital structure (DER and DAR). Institutional ownership has a significant negative effect on DER, but has a negative but not significant effect on DAR. Profitability has a significant negative effect on the capital structure (DER and DAR), while the structure of assets and company size does not have a significant effect on the capital structure. (DER and DAR).

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Capital structure decisions in a period of economic intervention

International Journal of Accounting and Information Management ◽

10.1108/ijaim-08-2019-0094 ◽

2020 ◽

Vol 28 (3) ◽

pp. 465-495 ◽

Cited By ~ 2

Author(s):

Maria Elisabete Neves ◽

Zélia Serrasqueiro ◽

António Dias ◽

Cristina Hermano

Keyword(s):

Capital Structure ◽

Debt Crisis ◽

Dynamic Panel Data ◽

Debt Maturity ◽

Economic Adjustment ◽

Adjustment Programme ◽

Content Type ◽

Two Samples ◽

The Impact ◽

The Capital Structure

Purpose This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large enterprises and from 4,233 non-financial small and medium enterprises for the period 2010-2016. Additionally, the authors selected a sub-period from 2010 to 2014 for a deeper understanding of the impact of the sovereign debt crisis and the Economic Adjustment Programme of Troika on the capital structure of those companies. Design/methodology/approach Three dependent variables were tested according to debt maturity, and a dynamic panel data model, namely, the generalised method of moments system estimator, was used to test the formulated research hypotheses following Arellano and Bover (1995) and Blundell and Bond (1998) to capture the dynamic nature of the firm’s capital structure decisions. Findings In general, the results point out that the capital structure decisions depend on a set of firm-specific factors, and that the effects of the determinants of the debt maturity ratios differ according to the type of firm, i.e. large/small firms, and the economic cycle. Originality/value To the best of the authors’ knowledge, this is the first study that has been carried out in Portugal by using two samples of large and small companies for analysing the effects of the Economic Adjustment Programme of Troika on the capital structure of companies. The authors seek to understand which type of companies suffered more because of the effects of the Economic Adjustment Programme of Troika during this period, and which are the capital structure determinants that present greater change. Contrary to what might be expected, large companies are the firms that suffer most from the Economic Adjustment Programme. Probably, because these companies are the most immediate, most scrutinised and those that must show abroad that the bank did not fund them in the long term, because of the imposition and limits to grant credit faced by the banks themselves.

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The Impact of Liquidity on the Capital Structure: Evidence from Malaysia

International Journal of Economics and Finance ◽

10.5539/ijef.v8n10p130 ◽

2016 ◽

Vol 8 (10) ◽

pp. 130 ◽

Cited By ~ 4

Author(s):

Maziar Ghasemi ◽

Nazrul Hisyam Ab Razak

Keyword(s):

Capital Structure ◽

Short Term ◽

Current Ratio ◽

Debt Level ◽

Asset Liquidity ◽

Independent Variable ◽

The Impact ◽

A Company ◽

The Capital Structure

<p class="Content">For many years, liquidity of a company’s asset and its effect on the optimal debt level has been a controversial issue among scholars in finance studies. Prior studies have demonstrated that in some countries, asset liquidity increased debt level while in other countries liquid companies were less leveraged and more regularly financed by their own capital. This study investigates the effect of liquidity on the capital structure among the 300 listed companies in the Main market of Bursa Malaysia from 2005 to 2013 fiscal years. Pooled OLS is applied to investigate the impact of liquidity ratios on different Debt ratios. Liquidity of a company, which is the independent variable of this study, is measured by two common ratios which are: quick ratio and current ratio. Additionally, the Debt/Equity and Debt/Asset ratios represent the capital structures based on the short-term, long-term and total debt. The results show that all the measures of liquidity have significant impacts on all the proxies of leverage. According to the results, Quick ratio has a positive effect on leverage; although, Current ratio is negatively related to leverage. Moreover, short-term debt is more influenced by liquidity compared to long-term debt.</p>

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Analisis Dampak Struktur Modal Terhadap Profitabilitas

ASSET: Jurnal Manajemen dan Bisnis ◽

10.24269/asset.v1i1.2561 ◽

2018 ◽

Vol 1 (1) ◽

Author(s):

Dwi Setiarini ◽

Sujiono Sujiono ◽

Hadi Sumarsono

Keyword(s):

Capital Structure ◽

Negative Impact ◽

Secondary Data ◽

T Test ◽

Return On Assets ◽

Credit Cooperatives ◽

Equity Ratio ◽

Data Source ◽

The Impact ◽

The Capital Structure

Funding is an important issue that is taken into account by the company, both for the establishment and expansion of the business. Capital structure has an impact on profitability, with the improvement in capital structure, the company gives profits. The purpose of this study was to determine the impact of the capital structure measured by Debt to Equity Ratio (DER) on profitability as measured by Return on Assets (ROA) partially in Sharia Savings and Credit Cooperatives Cooperatives or KSK Komment Year 2016 - 2019. This researcher uses regression analysis simple linear and t test. The data source used in this study is secondary data. The results of the study concluded that the capital structure measured by Debt to Equity Ratio (DER) partially had a negative impact on Return on Assets (ROA). While the t test on the variable Debt to Equity Ratio (DER) partially proved to have no significant impact on Return on Assets (ROA).

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CAPITAL STRUCTURE AS DETERMINANT OF FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN ETHIOPIA (A CASE STUDY ON PRIVATE BANKS IN ETHIOPIA)

International Journal of Advanced Research ◽

10.21474/ijar01/12576 ◽

2021 ◽

Vol 9 (03) ◽

pp. 216-231

Author(s):

Taddesse Shiferaw Deneke ◽

◽

Tripti Gujral ◽

Keyword(s):

Capital Structure ◽

Financial Performance ◽

Commercial Banks ◽

Empirical Relationship ◽

Asset Return ◽

Return On Equity ◽

Net Profit ◽

Return On Capital ◽

The Impact ◽

The Capital Structure

A lot of studies have actually been done by numerous researchers both in developed and developing countries such as Ethiopia to ascertain the empirical relationship existing between capital structure and firm performance with varying samples and period as well as application of several and divergent statistical estimation. This study is based on the identification of the impact that capital structure have on the financial performance of commercial banks in Ethiopia. In this regard, secondary data is collected from varied sources especially annual reports of the private commercial banks in Ethiopia. The literature review is done in the report, and it is identified operating, and the capital structure heavily affects net profit. Apart from this, return on equity, asset and capitals employed also affected by the capital structure of the banks. Regression analysis and descriptive analysis tools are used to analyse the data that is related to the sixteenprivate commercial banks in Ethiopia. On analysis of data, it is identified that operating and net profit is heavily affected by the capital structure. However, in the case of return on asset, return on equity, and return on capital employed, such kind of relationship is not observed. Thus, it is concluded on the basis of entire work that capital structure have the huge impact on the operating and net profit, but it does not put any large impact on the return on asset, return on equity and return on capital employed. The study recommended that banks follow a specific policy, in order to maintain a balance in the capital structure. It is also recommended that managers must keep a keen eye on the changes that are taking place in the capital structure.

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