scholarly journals The role of financial constraints in the services sector: how different is it from manufacturing?

2016 ◽  
pp. 21-41 ◽  
Author(s):  
Filipe Silva ◽  
Carlos Carreira
Keyword(s):  
Cash Flow ◽  
Inverse Relationship ◽  
Financial Constraints ◽  
Manufacturing Sector ◽  
Services Sector ◽  
Developed Economies ◽  
Cash Flow Sensitivity ◽  
The Relationship ◽  
Two Sectors

Although the services sector has emerged as a major contributor to gross domestic product and employment in developed economies, very little attention has been paid to financial constraints faced by services firms. This paper represents a first attempt to model financial constraints in the services sector. In particular, we question the commonly accepted inverse relationship between firm size/age and financial constraints. To conduct our empirical tests, we estimate the Cash-Cash Flow Sensitivity using a large unbalanced panel of Portuguese firms. We also combine the recently developed Hovakimian-Hovakimian index of firm’s financial constraints with the sensitivity of cash stocks to cash-flow approach. Our results suggest that there are clear differences in financial constraints across the two sectors. First, firms operating in the services sector suffer from more severe financial constraints than those in manufacturing. Second, the relationship between size and financial constraints appears to be inverse in the case of the manufacturing sector, but not in services, for which we have U-shaped evidence. Finally, for the services sector we find some evidence suggesting an inverse relationship between age and financial constraints, while in manufacturing this relationship seems to be U-shaped.

scholarly journals BNDES loans and the financial constraints of Brazilian publicly traded companies

2020 ◽  
Vol 55 (4) ◽  
pp. 567-582
Author(s):  
Walter Eclache da Silva ◽  
Eduardo Kayo ◽  
Roy Martelanc
Keyword(s):  
Capital Structure ◽  
Cash Flow ◽  
Financial Constraints ◽  
Theoretical Perspective ◽  
Content Type ◽  
Flow Sensitivity ◽  
Multiplier Effect ◽  
Cash Flow Sensitivity ◽  
Development Banks

Purpose The purpose of this paper is to analyze whether companies that contracted loans from the Brazilian National Bank for Economic and Social Development (BNDES) between 2002 and 2014 were able to invest more than companies that did not. The literature on financial constraints, particularly that based on the investment-cash flow sensitivity model, is among the most studied and controversial in the area of finance, and the discussion on the role of development banks is equally controversial. Design/methodology/approach The main econometric model of this study was based on the investment-cash flow sensitivity model, with the incorporation of a binary variable that captures the role of the BNDES. This model is applied to a sample of companies listed on the B3 from 2002 to 2014. Findings This study shows that loans from the BNDES amplify the effects of cash flow on investments, generating a kind of credit multiplier. An important role of development banks is to reduce the financial constraints typical of developing countries. Research limitations/implications The use of the cash flow sensitivity model in companies that contracted loans from the BNDES is a relevant instrument to test the effect of the BNDES on companies with financial constraints. Practical implications The contracting of BNDES loans by companies can affect both capital structure and cash generation, particularly in companies or years in which there was financial constraint. Social implications Due to the nature of the BNDES as a development bank, there are ramifications in terms of the generation of employment and income inherent to the mission of this type of institution. Knowing the multiplier effect on the cash flow potential of companies has a direct impact on their preservation, enabling them to maintain and expand the supply of jobs. Originality/value This study is the first to integrate two important areas of study. From the theoretical perspective, this study provides evidence on the relationship between the BNDES and company financial constraints that open new avenues of research. From the managerial point of view, the evidence of the multiplier effect is highly important for the management of the capital structure and cash flow of companies.

scholarly journals The Indirect Impact of Busy Directors on the Relationship of Family Structure and Cash Flow Sensitivity of Cash (Empirical Research in Indonesia’s Manufacturing Sector 2013-2017)

2021 ◽  
Vol 12 (1) ◽  
pp. 111-114
Author(s):  
Wahyu Santoso ◽  
Cynthia Afriani Utama
Keyword(s):  
Family Structure ◽  
Cash Flow ◽  
Manufacturing Sector ◽  
Manufacturing Companies ◽  
Flow Sensitivity ◽  
Indirect Impact ◽  
Cash Flow Sensitivity ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

Research aims: This research aimed to determine the impact of family structure on the cash flow sensitivity of cash (CFSC) in the manufacturing sector. It also investigates the indirect impact of busy directors as a moderating effect.Design/Methodology/Approach: Based on a sample of Indonesia’s manufacturing companies from 2013 to 2017, the researcher uses GLS regression models on this panel data calculated with robustness fit test at the firm’s level.Research findings: It indicated that family structure has a impact positively on cash flow sensitivity of cash and statistically significant. Meanwhile, the indirect impact of busy directors  found to have a impact negatively and weakened on the relationship of family structure and CFSC, it also indiciated that quality of busy directors is an tool of corporate governance that is effectively to monitor of every family firm’s decisions.Theoretical contribution: This article enriches previous literature by justifying the impact of busy directors on the relation between every each of family’s firm decision and CFSC. Furthermore, it showed us a metric for agency problems that is the sensitivity of cash to corporate cash flows.Implication policy: Based on POJK regulations, the context of busy directors in this research refers to the roles and duties of the Board of Commissioners (BOC) which concurrently hold positions for other public companies.Research Limitation/Implication: The implications suggest that almost most of Indonesian family corporation are tend to expropriate minority by extracting rents through coporate cash flow sensitivity of cash behavior. 

The number of employed as a macroeconomic indicator of working time dynamics

2020 ◽  
Vol 16 (5) ◽  
pp. 935-945
Author(s):  
I.A. Zaikova
Keyword(s):  
Comparative Analysis ◽  
Manufacturing Sector ◽  
Working Hours ◽  
Working Time ◽  
Labor Costs ◽  
Factors Affecting ◽  
Time Dynamics ◽  
Developed Economies ◽  
The Relationship ◽  
Macroeconomic Indicator

Subject. The working time of workers at any stage of economic development is a value reflecting the level of labor productivity. Any progress in productivity contributes to changes in the volume of labor costs and the number of employed. Depending on the relationship between the total volume of labor costs and the number of employed, the duration of working time per one worker may change (it may increase, decrease, or remain unchanged). Objectives. The study aims to confirm the importance of such a macroeconomic indicator as the number of employed in varying working hours. Methods. The study rests on the comparative analysis of countries with developed economies based on some indicators like dynamics of the working time fund, dynamics of the number of employed, average number of hours worked during the year per employee, etc. The analyzed timespan is 25 years (from 1991 to 2016). Results. The comparative analysis revealed that in the non-production sphere and the economy as a whole the macroeconomic determinants correlate so that the length of working time per worker reduces. When considering the analysis results for the manufacturing sector, no single trend was identified. Conclusions. One of the key factors affecting the change in working hours is the number of employed. The relationship between the working time fund and the number of employed directly determines the dynamics of working time per worker.

Revisiting the relationship between art and industry in nineteenth-century Britain from the manufacturer’s perspective

2021 ◽  
Vol 30 (1) ◽  
pp. 31-52
Author(s):  
Ann Compton
Keyword(s):  
Nineteenth Century ◽  
Industrial Sector ◽  
Critical Discourse ◽  
Drawing Board ◽  
Public Exposure ◽  
Production Practices ◽  
The Aesthetic ◽  
The Relationship ◽  
Two Sectors

The mid-nineteenth century critical discourse compartmentalized art and industry by crediting each with specific powers. Manufacturing was identified with the development of technologically advanced processes, materials and products, while fine artists were given authority over the aesthetic aspects of industrial design. The idea that the two sectors had separate areas of responsibility has proved extremely enduring, and continues to influence our perceptions of Victorian manufacturing. This article contributes to the wider task of re-evaluating the relationship between art and industry in nineteenth-century Britain by examining the role of design in potteries and art metalworking firms from the manufacturer’s perspective. It shows that contrary to the picture painted by Victorian critics, design was central to the ambitions and commercial operations of manufacturing businesses. Crucially, decisions about the recruitment of design staff were shaped by the close connection between the creation of new products at the drawing board, and their fabrication in the workshop. Since each branch of manufacturing had its distinctive characteristics, there were significant practical, aesthetic and commercial advantages for manufacturers in employing experienced designers who knew the trade, and were fully conversant with production practices. Unless a professional sculptor joined a firm, they were unlikely to have this inside knowledge, which made commissioning one-off designs from artists a riskier proposition. Manufacturers found that one of the best ways to get around this was to make reductions of sculptures, and initial demand for statuettes in Parian suggested they would be profitable for all concerned. In the end, the market did not live up to its early promise, but the publicity given to Parian statuettes compensated manufacturers and sculptors. Overall, it was this increased public exposure for art manufactures that was the prime benefit of the mid-nineteenth century critical discourse for the industrial sector.

scholarly journals IMPACT OF DIVIDEND PAYOUT ON FIRM’S PERFORMANCE UNDER LOW GROWTH OPPORTUNITIES

2021 ◽  
Vol 9 (3) ◽  
pp. 1156-1165
Author(s):  
Taymoor Ali ◽  
Muhammad Kashif Khurshid ◽  
Adnan Ali Chaudhary
Keyword(s):  
Stock Exchange ◽  
Manufacturing Sector ◽  
Secondary Data ◽  
Financial Statements ◽  
Manufacturing Firms ◽  
Growth Opportunities ◽  
Dividend Payout ◽  
Relationship Of ◽  
The Relationship

Purpose of the study: The objective of the study was to investigate the relationship of the dividend payout on a firm's performance under low growth opportunities from the manufacturing sector of Pakistan. Methodology: A sample of 251 firms out of 378 manufacturing firms listed at the Pakistan Stock Exchange (PSX), have been carefully chosen for the era of ten years from 2006 to 2015. The secondary data was obtained from the firm’s web financials and analysis of financial statements, published by the statistics department of the State Bank of Pakistan. For the persistence of investigation panel data (fixed effect) analyses were employed in this study. Main Findings: The fallouts of the analysis revealed that the dividend payout ratio has an insignificant relationship with the firm's performance in the low growth perspectives of the study. Applications of this study: The findings of the study are helpful for the financial managers of the firms facing low growth opportunities. Furthermore, the investors in capital markets can use the findings of this while investing. The originality of this study: The study focussed on the role of low growth opportunities while studying the nexus of dividend pay-out and the firm’s financial performance which inherits the novelty and originality of the study.

scholarly journals Financial capital, constraints, partners, and performance: An empirical analysis of Indonesia SMEs

2021 ◽  
Vol 18 (2) ◽  
pp. 210
Author(s):  
I Wayan Widnyana ◽  
I Made Dauh Wijana ◽  
Almuntasir Almuntasir
Keyword(s):  
Financial Performance ◽  
Financial Constraints ◽  
Small And Medium Enterprises ◽  
Value Added ◽  
Financial Capital ◽  
Moderation Effect ◽  
And Performance ◽  
Medium Enterprises ◽  
The Relationship

Indonesia's small and medium enterprises (SMEs) are considered the backbone of the national economy. However, the fact that SMEs still contribute less to the national gross domestic product (GDP) in terms of value-added, need to be addressed. While previous studies mainly focused on financial (access) constraints as one of the major constraints faced by small enterprises which affect their growth and performances, this study aims to extend the relationship between capital and financial performance of Indonesia SMEs with the moderating effect of financial constraints and partners. This study is different from others as it uses a bigger panel dataset which is about 4.36 million SMEs in Indonesia and is the first to explore the role of financial partners comprehensively. Moreover, the panel regression model with geographic analysis unit uses as a data analysis method. The results of the study show that financial capital has a positive and significant effect on the financial performance of SMEs. Furthermore, while the moderation role of financial partners on the relationship between financial capital and financial performance of Indonesia SMEs was failed to prove, the negative moderation effect of financial constraints was able to prove in this study.

Sign in / Sign up

Export Citation Format

Share Document