Impact of Executive Remuneration and Firm Leverage on Firm Stability: Lessons from European Firms

The aim of this study is to examine the impact of executive remuneration and firms’ leverage on firms’ stability as measured by winsorized Zscore (wZscore). The wZscore measure corresponds to the Altman Zscore, which increases as default risk decreases. To test the study’s hypotheses, a linear regression model is applied to a 6-year panel dataset of 180 listed firms categorized in 10 economic sectors operating in 22 countries from the years 2013 to 2018. The results show that executive remuneration has a significant negative impact on firm stability as measured by wZscore. Additionally, firm leverage has a significant positive impact on firm stability. Beyond the theoretical implications, the findings of this study have some practical implications that are particularly relevant to boards of directors, shareholders, managers, and policymakers. The findings suggest that executives should be offered a proper remuneration package to maintain their firms’ stability along with the capacity of firms’ equity and assets to cope up with unprecedented circumstances and the firms’ long-term debts. Finally, this study offers specific recommendations for how firms can balance their pay and performance in terms of executive remuneration and ensure better leverage to optimize their own and society's sustainable development.

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The Impact of the Business Environment on the Formalization of Informal Firms. The Case of Kosovo

Südosteuropa ◽

10.1515/soeu-2020-0035 ◽

2020 ◽

Vol 68 (4) ◽

pp. 505-529

Author(s):

Kujtim Zylfijaj ◽

Dimitar Nikoloski ◽

Nadine Tournois

Keyword(s):

Negative Impact ◽

Positive Impact ◽

Business Environment ◽

Positive Influence ◽

Policy Implications ◽

Tax Reforms ◽

Firm Level ◽

Characteristics Analysis ◽

Significant Negative Impact ◽

The Impact

AbstractThe research presented here investigates the impact of the business environment on the formalization of informal firms, using firm-level data for 243 informal firms in Kosovo. The findings indicate that business-environment variables such as limited access to financing, the cost of financing, the unavailability of subsidies, tax rates, and corruption have a significant negative impact on the formalization of informal firms. In addition, firm-level characteristics analysis suggests that the age of the firm also exercises a significant negative impact, whereas sales volume exerts a significant positive impact on the formalization of informal firms. These findings have important policy implications and suggest that the abolition of barriers preventing access to financing, as well as tax reforms and a consistent struggle against corruption may have a positive influence on the formalization of informal firms. On the other hand, firm owners should consider formalization to be a means to help them have greater opportunities for survival and growth.

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What Drives Bank Profitability? A Panel Data Analysis of Commercial Banks in Bangladesh

International Journal of Finance & Banking Studies (2147-4486) ◽

10.20525/ijfbs.v10i2.1236 ◽

2021 ◽

Vol 10 (2) ◽

pp. 96-110

Author(s):

Rana-Al-Mosharrafa ◽

Md. Shahidul Islam

Keyword(s):

Negative Impact ◽

Positive Impact ◽

Panel Data Analysis ◽

Mediation Effect ◽

Industry Concentration ◽

Equation Modeling ◽

Bank Profitability ◽

Macroeconomic Variables ◽

Significant Negative Impact ◽

The Impact

Bank profitability plays a significant role in the growth and development of an emerging economy. The purpose of the study was to examine the impact of bank characteristics, industry concentration and macroeconomics variables on commercial bank profitability in Bangladesh from 2007-2017. Bank profitability is proxied by return on assets (ROA), return on equity (ROE) and net interest margin (NIM). The study is based on secondary data and Hausman test has been performed using STATA software in favor of fixed effect modeling. Panel regressions shows that cost efficiency has significant negative impact on ROA and NIM. The positive impact of loan to deposit ratio with ROA suggests that efficient fund management including investment and assessed expenditure should be emphasized. Bank size has significant negative impact on all the measures of profitability, which indicates that monopolistic competition will reduce banking profit. Credit risk has significant positive impacts on ROE. Industry concentration measured by CR3 is positively related with ROE and has significant negative relation with bank profitability (ROA). Among macroeconomic variables inflation has significant positive and bank spread has significant negative impact on ROE. The coefficients of all the macroeconomic variables have been found to be significantly related to bank profitability while measured by NIM. Our study recommends further research with other explanatory variables such as, corporate governance, corporate social responsibility (CSR) and deposit insurance to accelerate the model and construct the econometric model by using structural equation modeling, mediation effect modeling etc.

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Scoring Models and Credit Risk: The Case of Cooperative Banks in Poland

Risks ◽

10.3390/risks9070132 ◽

2021 ◽

Vol 9 (7) ◽

pp. 132

Author(s):

Krzysztof Kil ◽

Radosław Ciukaj ◽

Justyna Chrzanowska

Keyword(s):

Statistical Data ◽

Negative Impact ◽

Positive Impact ◽

Review Of The Literature ◽

Management Board ◽

Panel Model ◽

Significant Negative Impact ◽

Cooperative Banks ◽

Lending Activity ◽

The Impact

The aim of the research presented in the article was to analyse the legitimacy of the use of scoring models in banking activities, together with the assessment of the effectiveness of this tool in reducing the high value of the NPL ratio in Polish cooperative banks on the example of banks belonging to the BPS S.A. association in the period between 2004 and 2020. We used a variety of research methods for this purpose including a depth review of the literature, analysis of statistical data regarding the sector of Polish cooperative banks, analysis of financial data of cooperative banks, construction of an econometric panel model, and the designing a questionnaire (which was later sent to the management board of selected cooperative banks). Our research confirmed the significant impact of the use of scoring models in lending activities on the value of the NPL ratio in cooperative banks. The analysed cooperative banks, which used the scoring models proposed by BIK in their lending activity, showed significantly lower values of the NPL ratio in each analysed year than banks that used other scoring models. Our study also confirmed the different direction of the impact of the models offered by BIK and individual scoring models on the value of the NPL ratio. We have also shown that the scoring models proposed by BIK have a statistically significant negative impact on the level of the NPL ratio, and the banks’ own scoring models have a statistically significant positive impact on the level of the NPL ratio.

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Model Kinerja Finansial Pemerintah Daerah Melalui Aset dan Pendapatan Asli Daerah

BALANCE: Economic, Business, Management and Accounting Journal ◽

10.30651/blc.v18i1.6797 ◽

2021 ◽

Vol 18 (1) ◽

pp. 36

Author(s):

Kun Ismawati

Keyword(s):

Financial Performance ◽

Negative Impact ◽

Positive Impact ◽

Capital Expenditure ◽

Linear Regression Analysis ◽

Financial Statements ◽

Multiple Linear Regression Analysis ◽

Regional Government ◽

Significant Negative Impact ◽

The Impact

ABSTRACT The research aimed to explore financial performance’s model of the Karanganyar Regency Regional Government. This research tested the impact of size, richness, leverage, and capital expenditure on the financial performance of the Karanganyar Regency Regional Government. Research data were 8 (eight) periods of financial statements. Hypotheses analyzed with multiple linear regression. Analysis results showed that size and richness have a significant positive impact on the financial performance of Karanganyar Regency Regional Government; while leverage and capital expenditure have a significant negative impact on the financial performance of the Karanganyar Regional Government. Those results illustrates that greater size and richness will increase the financial performance; on the contrary, the greater leverage and capital expenditure will decrease the financial performance. The model explored is Y = -75.79 + 109.039X1 + 3.754X2 – 0.582X3 – 0.231X4. Keywords : size; richness; leverage; capital expenditure; regional government financial performanceCorrespondence to : [email protected] ABSTRAK Penelitian ini bertujuan menggali model kinerja finansial Pemerintah Daerah Kabupaten Karanganyar. Penelitian ini menguji pengaruh ukuran, kekayaan, leverage, dan belanja modal pada kinerja finansial Pemerintah Daerah Kabupaten Karanganyar. Data penelitian ini adalah 8 (delapan) periode laporan keuangan. Hipotesis dianalisis dengan regresi linear berganda. Hasil analisis menunjukkan bahwa ukuran dan kekayaan memiliki dampak positif signifikan pada kinerja finansial Pemerintah Daerah Kabupaten Karanganyar; sedangkan leverage dan belanja modal memiliki dampak negatif signifikan terhadap kinerja finansial pada Pemerintah Daerah Kabupaten Karanganyar. Hasil-hasil tersebut menggambarkan bahwa makin besar ukuran dan kekayaan akan meningkatkan kinerja finansial; sebaliknya, makin besar leverage dan belanja modal akan menurunkan kinerja finansial. Model yang tergali adalah: Y = -75.79 + 109.039X1 + 3.754X2 – 0.582X3 – 0.231X4. Kata kunci : ukuran; kekayaan; leverage; belanja modal; kinerja finansial pemerintah daerah

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Impacts of Capital Structure and Dividend Policy on the Financial Performance of Listed Companies on Vietnamese Stocks Market

10.31219/osf.io/u8pd9 ◽

2021 ◽

Author(s):

Loan T. Vu ◽

Anh T. H. Vu ◽

Thao T. P. Nguyen

Keyword(s):

Dividend Policy ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Generalized Least Squares ◽

Listed Companies ◽

Dividend Yield ◽

And Performance ◽

The Impact ◽

The Relationship

This study is taken to describe the relationship between the levels of debt, dividend policy and the performance of firms listed in Vietnamese stock market. The dividend policy is proxied by the dividend yield while firm’s performance is measured by ROE, ROA, and P/E. The total number of observations is 552, collecting from 92 listed companies on Hochiminh Stock Exchange during 2012 and 2019. The analysis results from generalized least squares (GLS) models report that the choice of firm’s performance proxy affects the relationship between firm’s performance and leverage as well as dividend policy. While leverage has positive impact on ROE and ROA, it has negative impact on P/E. In contrast, dividend yield ratio is negatively correlated with ROA and P/E but positively correlated with ROE. However, the impact of debt levels on firm’s performance is independent with the choice of leverage proxy. The findings of this research are expected to provide better understanding about the connection between debt, dividend and performance of the firm that can support the managers to make relevant decisions.

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Pengaruh Dimensi Kualitas Pelayanan Terhadap Loyalitas Penumpang Trans Padang

Jurnal Ecogen ◽

10.24036/jmpe.v3i4.10501 ◽

2020 ◽

Vol 3 (4) ◽

pp. 562

Author(s):

Aris Agung Wicaksono ◽

Okki Trinanda

Keyword(s):

Data Analysis ◽

Sample Size ◽

Negative Impact ◽

Positive Impact ◽

Secondary Data ◽

Total Sample ◽

Analysis Method ◽

Significant Negative Impact ◽

In Trans ◽

The Impact

The aim of this study was to determine the impact of service quality in passenger retention in Trans Padang. These researchs were descriptive and quantitative. The study consist of residents in Padang, who frequently use the Trans Padang Pasar Raya – Lubuk Buaya route. The data used were primary and secondary data. We used questionnaires and documents. The sample of this technique was a targeted sample with a total sample size of 100 respondents. This analysis method had been use repeatedly with SPSS version 23 regrression analysis. The hypothesis study uses in this data analysis such as validation, reliability, normality, multicollinearity, heterogeneity, F-test, and T-statistic test at a = 0.05. the result of this study show that 1)Reliability had a significant negative impact on passenger loyality in Trans Padang. 2)Responsibility had a significant positive impact on the loyality of Trans Padang. 3)assurance had a significant positive impact on the loyality of Trans Padang. 4) Empathy had a significant positive impact on the loyality of Trans Padang. 5)Tangible had a significant negative impact on the loyality of Trans Padang passengers.Keywords : reliability, responsiveness, assurance, empathy, tangible and loyalty

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The Impact of Innovation Activities, Foreign Direct Investment on Improved Green Productivity: Evidence From Developing Countries

Frontiers in Environmental Science ◽

10.3389/fenvs.2021.635261 ◽

2021 ◽

Vol 9 ◽

Author(s):

Sa Xu ◽

Zejun Li

Keyword(s):

Developing Countries ◽

Foreign Direct Investment ◽

Direct Investment ◽

Negative Impact ◽

Positive Impact ◽

Productivity Index ◽

Innovation Activities ◽

Green Productivity ◽

Significant Negative Impact ◽

The Impact

This paper from the perspective of productivity changes examines the impact of innovation activities and foreign direct investment (FDI) on improved green productivity (IGP) in developing countries. We divide the sample into two sub-groups; the BRICS and the other developing countries so as to account for underlying country heterogeneity. The analysis follows a panel data approach over the period 1991 to 2014, and used the global Malmquist-Luenberger productivity index to measure IGP. The results indicate that IGP in developing countries has declined. Innovation activities have a positive impact on IGP. FDI has a significant negative impact on IGP. Further study finds that there are threshold effects between FDI and IGP based on innovation activities, when the developing countries with a low-level of innovation, FDI has a negative impact on IGP; when the developing countries innovation activities above the threshold, innovation activities and FDI both can promote IGP.

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Macroeconomic factors and stock returns: Evidence from the emerging market of Asia

Journal of Economic Info ◽

10.31580/jei.v5i3.99 ◽

2018 ◽

Vol 5 (3) ◽

pp. 16-20

Author(s):

Muhammad Asad Saleem Malik ◽

Saher Touqeer ◽

Shumaila Zeb

Keyword(s):

Exchange Rate ◽

Stock Returns ◽

Negative Impact ◽

Positive Impact ◽

Emerging Market ◽

Consumer Price Index ◽

Macroeconomic Factors ◽

Macroeconomic Variables ◽

Significant Negative Impact ◽

The Impact

This study examines the impact of macroeconomic variables on stock returns of Pakistan, India and Sri Lanka for the period of 1997-2014. GMM approach is used to analyze the impact of macroeconomic variables on stock returns. Variables of the study were T-Bills, Exchange Rate, Consumer Price Index (CPI) and the Industrial Production Index (IPI). The results of study show that T-bills rate has significant negative impact while Exchange rate has a significant positive impact on the Stock Returns of the study period.

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Trade Liberalization and Employment Performance of Textile and Clothing Industry in Tanzania

International Business Research ◽

10.5539/ibr.v3n3p47 ◽

2010 ◽

Vol 3 (3) ◽

pp. 47 ◽

Cited By ~ 3

Author(s):

Wumi K. Olayiwola ◽

Johansein Ladislaus Rutaihwa

Keyword(s):

Trade Liberalization ◽

Textile Industry ◽

Negative Impact ◽

Positive Impact ◽

Effective Rate ◽

Import Penetration ◽

African Countries ◽

Export Intensity ◽

Significant Negative Impact ◽

The Impact

The objective of this study is to investigate the effect of trade liberalization on employment performance of textile industry in Tanzania. The basic issue of concern is that the implementation of trade liberalization has differential impact on employment and wage in many African countries. In addressing this issue as well as achieving the objective, econometric models of employment and wage are estimated using co-integration method of analysis. The analysis shows that effective rate of protection and export intensity have an insignificant positive impact on demand for labour, but import penetration has a significant negative impact on employment. Also, only import penetration has a significant negative impact on wage. The impact of import penetration is larger than that of export orientation, as the increase in import competition leads to a decline in labour demand. These findings point to the fact that to make trade liberalization to be effectual in Tanzania, the process of trade reform needs to be gradual and also need to be strengthened with appropriate institutional support.

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Capital Structure as Driving Force of Financial Performance: Case of Energy and Fuel Sector of Pakistan

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v7i1.7722 ◽

2017 ◽

Vol 7 (1) ◽

Cited By ~ 1

Author(s):

Idrees Liaqat ◽

Shamila Saddique ◽

Tanveer Bagh ◽

Muhammad Atif Khan ◽

Mirza Muhammad Naseer ◽

...

Keyword(s):

Capital Structure ◽

Financial Performance ◽

Default Risk ◽

Negative Impact ◽

Secondary Data ◽

Energy Sector ◽

Equity Financing ◽

Significant Negative Impact ◽

Research Findings ◽

The Impact

Choosing the appropriate mix of various short and long term sources of funds, stands among the acute decisions to be taken by management of the firms, to form elementary suitability for investment and other decisions. Literature lacking consensus pertinent to impact of capital structure on financial performance of the firms. This study intends to investigate the impact of capital structure on financial performance of fuel and energy sector of Pakistan taking into account secondary data from 2006-14. Empirical results of renowned econometric model multiple regression revealed that there is a significant negative impact of capital structure on ROA and ROE of firms in fuel & energy sector of Pakistan, while EPS is least driven by capital structure parameters, only the size has significant positive bearing on EPS. The research findings suggest provide policy makers and administrators to rely on equity financing rather debt ethos in order to mitigate the default risk exposure.

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