Capital Structure and Debt Choices for Corporate Diversification Into New Foreign Markets

2007 ◽  
Author(s):  
Robert Joliet
Keyword(s):  
Capital Structure ◽  
Corporate Diversification ◽  
Foreign Markets

Do corporate diversification and earnings management practices affect capital structure?

2015 ◽  
Vol 7 (4) ◽  
pp. 360-378 ◽  
Author(s):  
Ranjitha Ajay ◽  
R Madhumathi
Keyword(s):  
Capital Structure ◽  
Earnings Management ◽  
Management Practices ◽  
Negative Relationship ◽  
Corporate Diversification ◽  
Content Type ◽  
Diversification Strategies ◽  
Market Product ◽  
Diversified Firms ◽  
The Impact

Purpose – The purpose of this paper is to empirically examine the impact of earnings management on capital structure across firm diversification strategies. Design/methodology/approach – The study focuses on firms operating in the manufacturing sector (diversified and focused). Panel data methodology compares diversification strategies and identifies the impact of diversification strategy with earnings management practices on capital structure decision. Findings – International and product diversified firms have lower levels of leverage than focused firms in their capital structure. Asset-based earnings management is positive for diversified (market/product) firms. Earnings management using discretionary expenditure (project based) is found to be higher for market diversified but product-focused firms. Earning smoothing method is found to be significant for focused firms and shows a negative relationship with capital structure. Originality/value – This study offers an insight into the relationship between corporate diversification, earnings management and capital structure decisions of manufacturing firms. The results provide an important contribution to accounting and strategy literature. A distinction is made between market- and product-diversified firms and influence of earnings management practices (asset-based, project-based and earnings smoothing (ESM)) on capital structure decisions. Diversified firms (market/product) tend to have lower levels of leverage than focused firms and earnings management practices within firm groups significantly influence the capital structure decisions.

Corporate diversification strategies and capital structure

2003 ◽  
Vol 43 (1) ◽  
pp. 147-167 ◽  
Author(s):  
Manohar Singh ◽  
Wallace N Davidson ◽  
Jo-Ann Suchard
Keyword(s):  
Capital Structure ◽  
Corporate Diversification ◽  
Diversification Strategies

scholarly journals Effect of Ownership Structure on Corporate Diversification of Listed Firms in Kenya

2019 ◽  
Vol 2 (5) ◽  
pp. 29-46
Author(s):  
Peninah Jepkogei Tanui ◽  
Josephat Cheboi Yegon ◽  
Ronald Bonuke
Keyword(s):  
Capital Structure ◽  
Institutional Ownership ◽  
Target Population ◽  
Foreign Ownership ◽  
Moderating Effect ◽  
Corporate Diversification ◽  
Listed Firms ◽  
Low Levels ◽  
The Relationship

Purpose - This paper aimed to examine the moderating role of capital structure in the relationship between institutional and foreign ownerships on corporate diversification of listed firms at the Nairobi Securities Exchange, Kenya. Design/Methodology - The target population comprised of all the 65 listed firms at Nairobi Securities Exchange in Kenya. However, the inclusion criteria were based on all firms listed at the NSE from 2003 to 2017. Findings - Capital structure significantly moderated the relationship between institutional ownership and corporate diversification. However, there was a statistically insignificant moderating effect of capital structure in the relationship between foreign ownership and corporate diversification. Practical Implications - As to increase diversification, listed firms are suggested to have low levels of capital structure and institutional ownership. Furthermore, low levels of foreign ownership and high capital structure is vital in attaining high diversification levels. Originality - The study contribution is the moderating effect of capital structure in institutional ownership - corporate diversification linkage.

scholarly journals Effect of Institutional Ownership on Financial Performance in Kenya: Moderated Mediation Role of Capital Structure and Corporate Diversification

2021 ◽  
Vol 2 (4) ◽  
pp. 23-39
Author(s):  
PENINAH TANUI
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Interaction Effect ◽  
Market Timing ◽  
Institutional Ownership ◽  
Equity Capital ◽  
Corporate Diversification ◽  
Significant Interaction Effect ◽  
Listed Firms ◽  
Indirect Relationship

Purpose: The study aimed at examining the moderating effect of capital structure in the indirect relationship between institutional ownership and financial performance through corporate diversification of listed firms at the Nairobi securities in Kenya. Approach/Methodology/Design: Post positivist research paradigm and explanatory research design guided the study in which 35 listed firms from 2003 to 2017 were included. Findings: There was a significant interaction effect between capital structure and institutional ownership on financial performance through corporate diversification. The study extended market power theory by examining institutional ownership structure given that corporate diversification is not only a source of power to drive a firm’s performance. Practical Implications: Institutional investors provide equity capital that is collaborated with the firm’s capital structure. As a result, there exist sufficient resources to take on diversification strategy despite this translating to a smaller amount in terms of financial performance. The study had implications on Market timing theory which opines that market timing is a ‘first order determinant’ to aid in selecting a suitable form of financing given debt and equity. Ideally, the preferences of different owners in the firm would affect the choice between debt and equity financing. Originality/value: Investigation of the interaction effect between capital structure and institutional ownership on financial performance through corporate diversification.

A literature review on firms' internationalisation through e-commerce

2019 ◽  
pp. 121-143
Author(s):  
Riccardo Resciniti ◽  
Federica De Vanna
Keyword(s):  
Systematic Review ◽  
Literature Review ◽  
International Business ◽  
Decision Process ◽  
Foreign Markets ◽  
New Markets ◽  
Integrative Framework ◽  
The Past ◽  
The Relationship

The rise of e-commerce has brought considerable changes to the relationship between firms and consumers, especially within international business. Hence, understanding the use of such means for entering foreign markets has become critical for companies. However, the research on this issue is new and so it is important to evaluate what has been studied in the past. In this study, we conduct a systematic review of e-commerce and internationalisation studies to explicate how firms use e-commerce to enter new markets and to export. The studies are classified by theories and methods used in the literature. Moreover, we draw upon the internationalisation decision process (antecedents-modalities-consequences) to propose an integrative framework for understanding the role of e-commerce in internationalisation

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