scholarly journals Capital structure, firm value and managerial ownership: Evidence from East African countries

2021 ◽  
Vol 18 (1) ◽  
pp. 346-356
Author(s):  
Mishelle Doorasamy
Keyword(s):  
Capital Structure ◽  
East Africa ◽  
Firm Value ◽  
Negative Impact ◽  
Equity Capital ◽  
Managerial Ownership ◽  
East African ◽  
African Countries ◽  
Listed Firms ◽  
The Relationship

East African firms are experiencing economic growth and are attracting foreign investment in the form of equity capital and loans. However, there are concerns about whether the structure of the capital and managerial ownership of these firms can influence their growth. The study examined the relationship between capital structure and firm value in East African countries and how managerial ownership influences this relationship. Sixty-five (65) listed firms in East Africa were selected for the study. The study employed a GMM estimation technique. The evidence showed that leverage has a significantly negative impact on the value of firms in East Africa, suggesting that higher debt would result in a decrease of firm value. The implication of this result is that firms can increase their value by reducing their leverage level. Moreover, the study found that managerial ownership had an inverse and significant impact on the relationship between leverage and firm value. The conclusion is that leverage decreases the value of firms in East Africa. Another conclusion is that owner-managers can use debt capital more effectively to increase firm value than non-owner managers. The implication of this result is that firms managed by owners can borrow more for their operations because it would increase the value of the firms. This study is the first to examine how managerial ownership moderates the relationship between capital structure and the value of firms in East Africa, which has a unique political, social, cultural and economic environment.

scholarly journals PENGARUH PERENCANAAN PAJAK, STRUKTUR MODAL DAN KEPEMILIKAN MANAJERIAL TERHADAP NILAI PERUSAHAAN DENGAN TRANSPARANSI PERUSAHAAN SEBAGAI VARIABEL MODERASI

2022 ◽  
Vol 6 (1) ◽  
pp. 1-12
Author(s):  
Deaelma Sari ◽  
Wiwit Irawati
Keyword(s):  
Data Analysis ◽  
Capital Structure ◽  
Firm Value ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Tax Planning ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Corporate Transparency ◽  
The Relationship

This study aims to identify and prove empirically the effect of Tax Planning, Capital Structure and Managerial Ownership on Firm Value with Corporate Transparency as a moderating variable. This type of research is quantitative approach research with explanatory research and associative methods. Samples were taken using the purposive sampling technique using Eviews 9 software for data analysis. The sample consists of 60 data from 12 property and real estate subsector manufacturing companies listed on the Indonesia Stock Exchange in 2016-2020. The results show that Tax Planning, Capital Structure and Managerial Ownership simultaneously affect the value of the company which is moderated by corporate transparency, tax planning has no effect on firm value, the capital structure does not affect firm value, managerial ownership does not affect firm value, and corporate transparency does not. effect on firm value, corporate transparency is unable to moderate the relationship between tax planning and firm value, corporate transparency is unable to moderate the relationship between capital structure and firm value, and corporate transparency is unable to moderate the relationship between managerial ownership and firm value.  

scholarly journals The Relationship Between Profitability and Firm Value: Evidence From Manufacturing Industry in Indonesia

2021 ◽  
Vol 12 (3) ◽  
pp. 466
Author(s):  
Bambang Sudiyatno ◽  
Elen Puspitasari ◽  
Ida Nurhayati ◽  
Tristiana Rijanti
Keyword(s):  
Capital Structure ◽  
Firm Value ◽  
Manufacturing Industry ◽  
Time Series Data ◽  
Negative Impact ◽  
Stock Exchange ◽  
Series Data ◽  
Industrial Companies ◽  
Company Growth ◽  
The Relationship

This study aims to test whether profitability acts as a moderating variable that is able to moderate the influence of the company growth and capital structure on the firm value. The independent variables used in this study are company growth and capital structure, while profitability is the moderating variable.The research sample was taken from manufacturing industrial companies listed on the Indonesia Stock Exchange (IDX) during the period 2016 - 2018. The study used panel data which is a combination of cross section and time series data, with data analysis using multiple regression.The results showed that company growth and profitability had a positive effect on the firm value, while capital structure had does not effect. The results of the analysis show that profitability does not moderate the effect of company growth and capital structure on the firm value, the interaction of company growth and capital structure with profitability has a negative impact on the firm value.

scholarly journals THE IMPACTS OF POLITICAL REGIME AND GOVERNANCE ON GROWTH OF EAST AFRICAN ECONOMIES

2019 ◽  
pp. 231-239
Author(s):  
Issa Moh'd Hemed
Keyword(s):  
Economic Growth ◽  
East Africa ◽  
Fixed Effect Model ◽  
Political Regime ◽  
East African ◽  
African Countries ◽  
Effect Model ◽  
Democratic System ◽  
The Government ◽  
The Relationship

This paper examine which type of political regime is an appropriate to improve the economic growth in East Africa by investigate the relationship among governance, political regime and economic performance. The Fixed Effect Model (FEM) is estimated using panel data cover the period from 1996 to 2017. The findings of this study show that all indicators of governance have positive and significant impact on economic growth in East Africa. This result also reveals that under the democratic system, the effectiveness of government has strong effect on economic growth more than anocracy and autocracy. The coefficient of autocratic regime is negative and statistical significant which indicates that the efforts undertaken by the government in this region cannot be helpful to enhance economic growth if the country is extremely relies on autocracy as this system weaken the proper allocation of the country's resources. This study suggest that in order to have stable economic growth, the government should maintains peace and order, obeys the rule of law and observe the human rights so as to minimize the authoritarian system, revive the democratic regime, and improve the effectiveness of government towards remarkable economic growth and development in East Africa. KEYWORDS: Political regime, governance, economic growth, East African countries.

scholarly journals Are Growth Led Financing Decisions Causing Insolvency in Listed Firms of Pakistan?

2020 ◽  
Vol 23 (2) ◽  
pp. 89-115
Author(s):  
Rana Yassir Hussain ◽  
Xuezhou Wen ◽  
Rehan Sohail Butt ◽  
Haroon Hussain ◽  
Sikandar Ali Qalati ◽  
...  
Keyword(s):  
Capital Structure ◽  
Negative Impact ◽  
Negative Relationship ◽  
Debt Maturity ◽  
Growth Opportunities ◽  
Listed Firms ◽  
Insolvency Risk ◽  
Financing Decisions ◽  
The Relationship ◽  
The Capital Structure

AbstractWe examine the relationship between growth opportunities and insolvency risk in a mediating framework through financing decisions for 330 listed firms on the Pakistan Stock Exchange (PSX) This study covers a data period of five years ranging from 2013 to 2017. Financing decisions used in this study involve capital structure decision and debt maturity decision. We applied robust clustered panel OLS regression to the data and found a negative relationship between growth opportunities and insolvency risk in all samples consisting of overall, large and small firms. Growth opportunities have a negative impact on the capital structure, but debt maturity was influenced positively. Financing decisions influenced the insolvency risk positively. We used Baron and Kenny’s (1986) approach to detect the intervening effects of financing decisions. Further, Sobel’s test used to check the significance of mediation. Partial mediation was found for the debt maturity ratio in the large and overall sample of firms. However, the capital structure did not mediate the relationship between growth opportunities and insolvency risk in this study.

scholarly journals The Effects of Financial Restatement and Corporate Governance Mechanisms on Firm Value

2019 ◽  
Vol 8 (6S3) ◽  
pp. 513-523
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Negative Impact ◽  
Governance Mechanisms ◽  
Moderating Variables ◽  
Listed Firms ◽  
Financial Restatement ◽  
Corporate Governance Mechanisms ◽  
Financial Restatements ◽  
The Relationship

This study examines the relationship between financial restatement and firm value in Malaysian public listed firms. In addition, it assesses the moderating effects provided by corporate governance mechanisms on the relationship of financial restatements and firm value. The study covers the period 2009-2015 and involves 142 public listed companies in Bursa Malaysia with financial restatements. The findings reveal that financial restatements do adversely impact firm value and that financial restatements negatively and significantly affect firm value. In terms of moderating variables, we find that the interaction between financial restatement and family ownership is negatively associated with firm value. In addition, this study also finds that the interaction between financial restatement and institutional ownership is positively and significantly associated with firm value. In conclusion, in the Malaysian context, this study establishes that financial restatement has a negative impact on firm value

scholarly journals The Effects of Financial Restatement and Corporate Governance Mechanisms on Firm Value

2019 ◽  
Vol 8 (6S3) ◽  
pp. 683-692
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Negative Impact ◽  
Governance Mechanisms ◽  
Moderating Variables ◽  
Listed Firms ◽  
Financial Restatement ◽  
Corporate Governance Mechanisms ◽  
Financial Restatements ◽  
The Relationship

This study examines the relationship between financial restatement and firm value in Malaysian public listed firms. In addition, it assesses the moderating effects provided by corporate governance mechanisms on the relationship of financial restatements and firm value. The study covers the period 2009-2015 and involves 142 public listed companies in Bursa Malaysia with financial restatements. The findings reveal that financial restatements do adversely impact firm value and that financial restatements negatively and significantly affect firm value. In terms of moderating variables, we find that the interaction between financial restatement and family ownership is negatively associated with firm value. In addition, this study also finds that the interaction between financial restatement and institutional ownership is positively and significantly associated with firm value. In conclusion, in the Malaysian context, this study establishes that financial restatement has a negative impact on firm value.

Financial and social efficiency analysis of Islamic microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marwa Fersi ◽  
Mouna Bougelbène
Keyword(s):  
Capital Structure ◽  
Credit Risk ◽  
Risk Taking ◽  
Negative Impact ◽  
Microfinance Institutions ◽  
Social Efficiency ◽  
Content Type ◽  
Islamic Microfinance ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.Design/methodology/approachThe stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.FindingsThe overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.Originality/valueThis paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

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