scholarly journals How optimal cash changed by the global financial crisis? A multi-country analysis

2020 ◽  
Vol 9 (2) ◽  
pp. 114 ◽  
Author(s):  
Hasan Tekin
Keyword(s):  
Financial Crisis ◽  
Financial Constraints ◽  
Global Financial Crisis ◽  
Empirical Results ◽  
Country Analysis ◽  
Precautionary Motive ◽  
The Global Financial Crisis ◽  
The Impact

This article investigates the impact of the global financial crisis 2007-2009 (GFC) as well as financial constraints and governance on optimal cash decisions. Using 14,885 sample firms from eleven countries, empirical results show that constrained firms have a faster cash adjustment than unconstrained firms as confirmed by precautionary motive. Contrary to agency motive, firms in weak-governed countries have a slower cash adjustment than those in well-governed countries before the GFC. However, this picture changes after the GFC. Specifically, they increase their cash adjustments, whereas those in well-governed countries decrease their cash adjustments as supported by agency motive. Overall, optimal cash policy differs following the GFC across financial constraints and governance.

scholarly journals Firm Performance, Financial Constraints, and Dual-Class Share Structure

2021 ◽  
Author(s):  
◽  
Fatematuz Tamanna Ahamed
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Financial Constraints ◽  
Global Financial Crisis ◽  
Financial Constraint ◽  
The Global Financial Crisis ◽  
Dual Class ◽  
Share Structure ◽  
The Impact ◽  
The Relationship

<p><b>This thesis addresses two aspects of financial constraints focusing, firstly, on the impact of financial constraints on firm performance and, secondly, on the impact of dual-class share structure on financial constraints. The first issue has been addressed in a large number of research studies, but the results are mixed. This study, therefore, conducts a meta-analysis of those earlier studies to provide a summary view of the results which, in contrast to narrative reviews of the empirical literature, provides an objective overview. The second issue examines the impact of dual-class share structures on financial constraints. The period of the global financial crisis is used to test the impact of the state of the economy on that relationship. To examine the impact of financial constraints on firm performance, 26 empirical studies with 189 effect sizes representing listed firms have been analysed. The study finds that overall there is a positive relationship between financial constraints and firm performance. The study also shows that the set of market-based measures of firm performance has a significant negative impact on the relationship, compared with the set of accounting-based measures. In terms of the financial constraints measure, the set of external financial constraints measures have a positive and highly significant impact on the relationship. The meta-regression analysis suggests that the choice of measure, regional difference, journal quality and publication status all have a significant impact on the relationship, and explain the variation in the association.</b></p> <p>To examine the impact of dual-class share structures on financial constraints the study analyses a sample of non-financial US firms over the period 2002-2018. Share structure is measured by the existence of a dual-class structure and also by excess voting rights and the proximity of the superior class shareholders in such structures. The study also shows that if financial constraints are measured by the WW index, irrespective of how dual-class share structure is measured, it increases the level of financial constraints. Similar results are obtained where financial constraints are measured by the KZ and SA indexes, except where dual-class share structure is measured by the proximity of superior class shareholders. The study also finds that if financial constraints are measured by the WW index, dual-class had a reduced impact during the period of the global financial crisis, thus, providing support for the propping theory. However, if financial constraint is measured by the SA index, dual-class share structure appears to have an increased impact during the GFC years. </p> <p>Among the additional tests, the HM index has been used as a measure of financial constraints, and the findings show that the impact of dual-class structures on financial constraints appears to be driven by their effect on debt constraints. The study also shows that firm age moderates the impact of dual-class share structures if financial constraints are measured by the WW index. The KZ, WW, and SA indexes are based on firm characteristics and, therefore, the study also tests for an impact of dual-class structures when financial constraint is measured by a text-based index, the BLM index. However, the results do not provide evidence of an impact in that case.</p>

Carbon risk and firm performance: Evidence from a quasi-natural experiment

2017 ◽  
Vol 43 (1) ◽  
pp. 65-90 ◽  
Author(s):  
Justin Hung Nguyen
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Financial Performance ◽  
Financial Constraints ◽  
Natural Experiment ◽  
Global Financial Crisis ◽  
Negative Association ◽  
Exogenous Shock ◽  
The Global Financial Crisis ◽  
The Impact

This article examines the effect of carbon risk on firm performance, exploiting the Australia ratification of Kyoto Protocol in December 2007 as an exogenous shock. The article finds that polluters, firms in highest-emitting industries, experience a reduction in financial performance relative to controlling non-polluters subsequent to the ratification, and the effect is more pronounced among financially constrained firms. The results are robust to various definitions of polluters, measures of financial constraints, falsification tests on the timing of the Kyoto adoption and the impact of the Global Financial Crisis. The evidence suggests a negative association between carbon risk and firm performance.

scholarly journals Firm Performance, Financial Constraints, and Dual-Class Share Structure

2021 ◽  
Author(s):  
Fatematuz Tamanna Ahamed
Keyword(s):  
Firm Performance ◽  
Financial Crisis ◽  
Financial Constraints ◽  
Global Financial Crisis ◽  
Financial Constraint ◽  
The Global Financial Crisis ◽  
Dual Class ◽  
Share Structure ◽  
The Impact ◽  
The Relationship

<p><b>This thesis addresses two aspects of financial constraints focusing, firstly, on the impact of financial constraints on firm performance and, secondly, on the impact of dual-class share structure on financial constraints. The first issue has been addressed in a large number of research studies, but the results are mixed. This study, therefore, conducts a meta-analysis of those earlier studies to provide a summary view of the results which, in contrast to narrative reviews of the empirical literature, provides an objective overview. The second issue examines the impact of dual-class share structures on financial constraints. The period of the global financial crisis is used to test the impact of the state of the economy on that relationship. To examine the impact of financial constraints on firm performance, 26 empirical studies with 189 effect sizes representing listed firms have been analysed. The study finds that overall there is a positive relationship between financial constraints and firm performance. The study also shows that the set of market-based measures of firm performance has a significant negative impact on the relationship, compared with the set of accounting-based measures. In terms of the financial constraints measure, the set of external financial constraints measures have a positive and highly significant impact on the relationship. The meta-regression analysis suggests that the choice of measure, regional difference, journal quality and publication status all have a significant impact on the relationship, and explain the variation in the association.</b></p> <p>To examine the impact of dual-class share structures on financial constraints the study analyses a sample of non-financial US firms over the period 2002-2018. Share structure is measured by the existence of a dual-class structure and also by excess voting rights and the proximity of the superior class shareholders in such structures. The study also shows that if financial constraints are measured by the WW index, irrespective of how dual-class share structure is measured, it increases the level of financial constraints. Similar results are obtained where financial constraints are measured by the KZ and SA indexes, except where dual-class share structure is measured by the proximity of superior class shareholders. The study also finds that if financial constraints are measured by the WW index, dual-class had a reduced impact during the period of the global financial crisis, thus, providing support for the propping theory. However, if financial constraint is measured by the SA index, dual-class share structure appears to have an increased impact during the GFC years. </p> <p>Among the additional tests, the HM index has been used as a measure of financial constraints, and the findings show that the impact of dual-class structures on financial constraints appears to be driven by their effect on debt constraints. The study also shows that firm age moderates the impact of dual-class share structures if financial constraints are measured by the WW index. The KZ, WW, and SA indexes are based on firm characteristics and, therefore, the study also tests for an impact of dual-class structures when financial constraint is measured by a text-based index, the BLM index. However, the results do not provide evidence of an impact in that case.</p>

scholarly journals Income Distribution in Turkey during the Global Financial Crisis

2017 ◽  
Vol 9 (3) ◽  
pp. 91
Author(s):  
Sinem Sefil-Tansever
Keyword(s):  
Financial Crisis ◽  
Income Inequality ◽  
Global Financial Crisis ◽  
Income Source ◽  
Labor Earnings ◽  
Income Sources ◽  
Gini Decomposition ◽  
The Global Financial Crisis ◽  
The Impact ◽  
Earning Inequality

The aim of this study is to examine mechanism responsible for the behavior of the income and earning inequality in Turkey during the global financial crisis based on data from the 2006 to 2014 Income and Living Conditions Survey. Gini decomposition by income source is employed in order to provide an analysis of the contribution of the various income sources to the evolution of income inequality and to assess the impact of a marginal percentage change in the income from a particular source on income inequality. For examining the contributions of specific variables (education, position in occupation, economic sector) to the interpretation of labor earnings inequality in terms of their gross and marginal contribution, we use static decomposition of Theil T index.

scholarly journals Russia and the CIS in 2008: Axis of Authoritarianism??

Asian Survey ◽  
2009 ◽  
Vol 49 (1) ◽  
pp. 135-145 ◽  
Author(s):  
Charles E. Ziegler
Keyword(s):  
Financial Crisis ◽  
Economic Performance ◽  
Domestic Politics ◽  
Global Financial Crisis ◽  
Great Power ◽  
The Caucasus ◽  
Central Asian ◽  
Presidential Succession ◽  
The Global Financial Crisis ◽  
The Impact

Russia's seamless presidential succession produced no major changes in domestic politics or foreign policy. Ties with Asia remained strong, though several key relationships——with China, Japan, and the Central Asian states——frayed under the impact of Russia's military action in Georgia. Impressive economic performance in the first half of the year boosted Russian confidence as a great power, but its vulnerability to the global financial crisis together with the heavy-handed operation in the Caucasus undermined Moscow's standing with both Asia and Europe by the end of the year.

scholarly journals Global Financial Crisis and Philanthropy: Malaysian Case

2015 ◽  
Vol 7 (2) ◽  
pp. 19-31 ◽  
Author(s):  
Janice Lay Hui Nga
Keyword(s):  
Financial Crisis ◽  
Mixed Method ◽  
Qualitative Data ◽  
Global Financial Crisis ◽  
Secondary Data ◽  
Civil Society Organisations ◽  
The Global Financial Crisis ◽  
The Impact ◽  
To Receive ◽  
Method Approach

This paper investigates the issue of the global financial crisis and its impacts on philanthropy and civil society organisations (CSOs) in Malaysia. CSOs are popularly known as non-governmental organisations (NGOs) in Malaysia. Financial crisis has caused NGOs in many countries to receive less funding. This situation may threaten and discourage voluntary works. Undoubtedly, these beneficial contributions from the NGOs are needful services to the society. This paper examines the impact of financial crisis through the lens of NGOs and philanthropy activities in Malaysia. It utilises primary and secondary data, employs a mixed method approach, and uses quantitative and qualitative data. While there are many influencing factors in this development, this paper presents several significant aspects in the Malaysian context, including the style and nature of giving, culture, religion, and political pressure. This study attempts to seek potential solutions, pathways and possible approaches beneficial to NGOs and philanthropy activities for their sustainability in facing the financial crisis and its consequences. Experiences and lessons learnt in Malaysia may well be useful and applicable to some extent in other countries.

scholarly journals Islamic Banking: The Firewall Against The Global Financial Crisis

2011 ◽  
Vol 28 (1) ◽  
pp. 9 ◽  
Author(s):  
Rohana Othman ◽  
Nooraslinda Abdul Aris ◽  
Rafidah Mohd Azli ◽  
Roshayani Arshad
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Free Market ◽  
Financial System ◽  
Capitalist System ◽  
Islamic Economic ◽  
The Global Financial Crisis ◽  
Financial Transactions ◽  
The Impact ◽  
Fundamental Values

The global financial crisis that devastated many of the worlds financial systems in a manner never seen before exposed the glaring weakness in risk management and interest-driven policies. The crisis brought the collapse of several iconic financial institutions once perceived to be too strong to capitulate. The crisis engulfed one economy after another from corporations to eventually bring about the collapse of governments of countries reeling from the impact of the crisis. Asset values plummeted and the crisis clearly demonstrated the fragility of the western capitalist system and the free market economy. The Islamic economic and financial system is anchored on universal honorable values, ideals and morals - honesty, credibility, transparency, co-operation and solidarity. These fundamental values uphold stability, security and safety in any financial transactions. Of paramount consideration is that the Shariah prohibits any economic and financial transactions that involve usury, lying, gambling, cheating, unsubstantiated risk or uncertainty (gharar), monopoly, exploitation, greed, unfairness and taking other peoples money unjustly. Another key aspect to the philosophy behind the Islamic financial system is money issued must be fully asset backed. It is impermissible to allow money to be traded for money except at par. Islam is not just the prohibition of riba and zakah (alms); it is a comprehensive system to fulfill societys basic necessities (food, clothing and shelter). History has demonstrated that Islam has the capacity to deliver and has succeeded in providing a viable economic system.

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

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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