scholarly journals Debt maturity structure and firms’ performance: Evidence from Vietnam

2020 ◽  
Vol 6 (03) ◽  
Author(s):  
Hoang duc LE
Keyword(s):  
Positive Impact ◽  
Stock Exchange ◽  
Debt Maturity ◽  
Financial Firms ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
The Impact

This paper investigates the impact of debt maturity structure on firms’ performance for all non-financial firms listed on Ho Chi Minh City Stock Exchange and Hanoi Stock Exchange between 2010 and 2017. We find that an increase in the ratio of long-term debt over total debt is associated with a decrease in firms’ performance. We also show that long-term debt financing can lead to a reduction in firms’ performance because it dampens the positive impact of the investment on firms’ performance. Our results are robust when we employ a System Generalized Methods of Moments to deal with endogeneity problems.

Analyzing the impact of board vigilance on financial distress through the intervention of leverage structure and interaction of asset tangibility in the non-financial sector of Pakistan

2021 ◽  
pp. 2150004
Author(s):  
Wen Xuezhou ◽  
Rana Yassir Hussain ◽  
Haroon Hussain ◽  
Muhammad Saad ◽  
Sikander Ali Qalati
Keyword(s):  
Capital Structure ◽  
Financial Distress ◽  
Ordinary Least Squares ◽  
Debt Maturity ◽  
Financial Firms ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
The Impact ◽  
The Relationship

This study focuses on the relationship between board vigilance and financial distress in non-financial firms listed on the Pakistan Stock Exchange (PSX). The mediating role of leverage structure and moderating role of asset tangibility is also studied following Baron and Kenney’s approach. The study analyzed the data of 284 firms ranging from 2013 to 2017 by using ordinary least squares (OLS) and panel corrected standard errors (PCSE) regressions. The study revealed that the debt maturity structure mediates the relationship between board independence and financial distress and between CEO non-duality and financial distress but the capital structure did not mediate any of the stated relationships. Similarly, asset tangibility negatively moderated the relationship between debt maturity and financial distress. However, there was no such moderation detected between the relationship of capital structure and financial distress. The results remained consistent throughout the analysis with both regression techniques. These results suggest using more long-term debt in debt maturity structure to have control over financial distress and also to reduce the reliance on non-productive tangible assets in the asset structure of non-financial firms of Pakistan.

scholarly journals The long-term horizon of family firms in M&A: The impact on research investments and debt maturity structure

2017 ◽  
Vol 15 (1) ◽  
pp. 108-122 ◽  
Author(s):  
Fabio Quarato
Keyword(s):  
Family Firms ◽  
Debt Maturity ◽  
Bank Debt ◽  
Growth Strategies ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
Research Investments ◽  
The Impact ◽  
External Growth

Despite family business is the most widespread ownership structure worldwide, there is a lack of evidence on the impact of external growth strategies on their capital structure. Although most researches showed that the risk of losing control leads family firms to a lower level of debt, this article sheds new light on debt maturity structure and innovation investments when family firms embrace an acquisition path. In particular, I argue that family firms will use bank debt to a lower extent than nonfamily firms when they embrace an external growth strategy and, as a consequence, they are more likely to avoid cuts in research investments and focus more on long term debt. These hypotheses are consistent with agency theory arguments, as family principals exercise a more effective monitoring due to the larger ownership stake and the desire to pass the company on the offspring in profitable conditions. By having access to a panel data, I analyse acquisitions carried out in the period 2000-2013 by all Italian companies with turnover exceeding 50 million Euros, and the results support the long term perspective of family firms. In particular, family firms will use less bank debt to finance acquisitions, avoiding cutting research investments and relying on a more balanced debt maturity structure.

scholarly journals Debt maturity structure, institutional ownership and accounting conservatism

2019 ◽  
Vol 4 (1) ◽  
pp. 35-51 ◽  
Author(s):  
Mahdi Salehi ◽  
Mohsen Sehat
Keyword(s):  
Significant Relationship ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Institutional Ownership ◽  
Debt Maturity ◽  
Accounting Conservatism ◽  
Content Type ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of debt maturity structure and types of institutional ownership on accounting conservatism by using different financial variables and proxies. Design/methodology/approach Employing panel data analysis in the R programming language, the authors test their hypotheses on a sample of 143 (858 firm-year observations) companies listed on the Tehran Stock Exchange during 2011–2016. Findings Using Basu (1997) and Beaver and Ryan (2000) models as proxies for accounting conservatism, the findings suggest a non-significant relationship between accounting conservatism and debt maturity structure. Contrary to the primary expectation, the results indicate that short-maturity debts are also non-significantly and negatively associated with accounting conservatism in financially distressed firms. Finally, using both conservatism measures, the authors document that there is no significant relationship between both active and passive institutional ownership and accounting conservatism as well as debt maturity structure. Originality/value The current study is the first study conducted in a developing country like Iran, and the outcomes of the study may be helpful to other developing nations.

The impact of cash flow volatility on firm leverage and debt maturity structure: evidence from China

2018 ◽  
Vol 8 (1) ◽  
pp. 69-91 ◽  
Author(s):  
Zulfiqar Ali Memon ◽  
Yan Chen ◽  
Muhammad Zubair Tauni ◽  
Hashmat Ali
Keyword(s):  
Standard Deviation ◽  
Cash Flow ◽  
Cash Flows ◽  
Debt Maturity ◽  
Percent Reduction ◽  
Content Type ◽  
Debt Maturity Structure ◽  
Maturity Structure ◽  
Cash Flow Volatility

Purpose The purpose of this paper is to investigate the influence of cash flow volatility on firm’s leverage levels. It also analyzes how cash flow volatility influences the debt maturity structure for the Chinese listed firms. Design/methodology/approach The authors construct the measure for cash flow variability as five-year rolling standard deviation of the cash flow from operations. The authors use generalized linear model approach to determine the effect of volatility on leverage. In addition, the authors design a categorical debt maturity variable and assign categories depending upon firm’s usage of debt at various maturity levels. The authors apply Ordered Probit regression to analyze how volatility affects firm’s debt maturity structure. The authors lag volatility and other independent variables in the estimation models so as to eliminate any possible endogeneity problems. Finally, the authors execute various techniques for verifying the robustness of the main findings. Findings The authors provide evidence that higher volatility of cash flows results in lower leverage levels, while the sub-sampling analysis reveals that there is no such inverse association in the case of Chinese state-owned enterprises. The authors also provide novel findings that irrespective of the ownership structure, firms facing high volatility choose debt of relatively shorter maturities and vice versa. Overall, a rise of one standard deviation in volatility causes 8.89 percent reduction in long-term market leverage ratio and 26.62 percent reduction in the likelihood of issuing debentures or long-term notes. Research limitations/implications This study advocates that cash flow volatility is an essential factor for determining both the debt levels and firm’s term-to-maturity structure. The findings of this study can be helpful for the financial managers in maintaining optimal leverage and debt maturity structure, for lenders in reducing their risk of non-performing loans and for investors in their decision-making process. Originality/value Existing empirical literature regarding the influence of variability of cash flows on leverage and debt maturity structure is inconclusive. Moreover, prior research studies mainly focus only on the developed countries. No previous comprehensive study exists so far for Chinese firms in this regard. This paper endeavors to fulfill this research gap by furnishing novel findings in the context of atypical and distinctive institutional setup of Chinese firms.

scholarly journals Capital Structure and Firms’ Performance: Evidence from Vietnam’s Stock Exchange

2015 ◽  
Vol 7 (12) ◽  
pp. 1 ◽  
Author(s):  
Tristan Nguyen ◽  
Huy-Cuong Nguyen
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Debt Maturity ◽  
Management Process ◽  
Short Term ◽  
Fixed Assets ◽  
Two Factors ◽  
The Impact ◽  
Very High

<p>Our paper examines what impact capital structure has on firms’ performance in selected firms listed on HCMC Stock Exchange. The data is collected from 147 listed companies during the period from 2006 to 2014. The study not only checks the impact the level of leverage has on firms’ performance, which is found to be negative in this study, but it also uses the short-term and long-term debt ratios to see the effect of debt maturity. However, there is no difference whether it is short-term or long-term. Tangibility is found to be negative with a very high proportion on average. With the suggestion that companies might invest too much in fixed assets and there is a lack of efficiency, this could be the alert for firms to improve their management process. Size and growth are found to be positive, since larger firms have lower costs of bankruptcy and higher growth rates associate with higher performance. Moreover, the study also adds the effects of industry and macroeconomics, and the result shows a correlation between the two factors and firms’ performance.</p>

Debt Maturity Structure and Credit Quality

2014 ◽  
Vol 49 (4) ◽  
pp. 817-842 ◽  
Author(s):  
Radhakrishnan Gopalan ◽  
Fenghua Song ◽  
Vijay Yerramilli
Keyword(s):  
Bond Market ◽  
Debt Maturity ◽  
Yield Spreads ◽  
Credit Quality ◽  
Debt Maturity Structure ◽  
Rollover Risk ◽  
Maturity Structure

AbstractWe examine whether a firm’s debt maturity structure affects its credit quality. Consistent with theory, we find that firms with greater exposure to rollover risk (measured by the amount of long-term debt payable within a year relative to assets) have lower credit quality; long-term bonds issued by those firms trade at higher yield spreads, indicating that bond market investors are cognizant of rollover risk arising from a firm’s debt maturity structure. These effects are stronger among firms with a speculative-grade rating and declining profitability, and during recessions.

Does Stock Liquidity Affect Corporate Debt Maturity Structure?

2020 ◽  
pp. 2150005
Author(s):  
Joseph M. Marks ◽  
Chenguang Shang
Keyword(s):  
Stock Market ◽  
Debt Maturity ◽  
Market Liquidity ◽  
Stock Liquidity ◽  
Yield Spreads ◽  
Debt Maturity Structure ◽  
Bond Yield ◽  
Maturity Structure ◽  
Stock Market Liquidity ◽  
The Impact

We show an inverse relation between the use of short-term debt and stock market liquidity. This finding is robust to a battery of control variables, alternative measures of the key variables, and various identification strategies. A difference-in-difference (DiD) approach suggests that the relation between debt maturity structure and stock liquidity may be causal. The impact of stock liquidity on debt maturity is stronger in the presence of large institutional holdings and when borrowers are subject to greater refinancing risk. We also provide evidence that firms with liquid stock tend to issue longer-term bonds and enjoy lower bond yield spreads. Overall, our results support the view that the governance function of stock market liquidity reduces the necessity of debt market monitoring, which allows firms to shift toward longer-term debt to avoid the costs and risk of frequent refinancing.

scholarly journals Capital Structure and Bank Performance: Empirical Evidence from Bangladesh

2020 ◽  
Vol 12 (1) ◽  
pp. 161
Author(s):  
Md. Ibrahim Molla
Keyword(s):  
Capital Structure ◽  
Positive Impact ◽  
Stock Exchange ◽  
Positive Influence ◽  
Bank Performance ◽  
Total Debt ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

The paper empirically investigates the relationship between capital structure and the performance of listed banks in Bangladesh using panel data over the period of five years from 2014-2018. To estimate the association between leverage level and bank performance the Panel Corrected Standard Error (PCSE) model is used in this study and the findings indicate that long term debt has a positive influence on the performance of banks which is measured in terms of ROA and ROE. This implies that long term debts are associated with the higher performance of banks listed in Bangladesh. The regression results also reveal that the capital structure component of total debt has no statistically significant impact on ROA, ROE and EPS but it has a significant positive impact on the performance of banks measured by price earning ratio. Furthermore, this analysis finds no relationship of long term debt and total debt with the EPS. These findings lead to conclude that capital structure has a weak to no influence on the performance of listed banks in Bangladesh. This paper is the first research attempt that investigates the impact of capital structure on the performance of all banks listed on the Dhaka Stock Exchange in Bangladesh.

Market differences and adjustment speed of debt, equity, and debt maturity

2020 ◽  
pp. 031289622096826
Author(s):  
Hasan Tekin
Keyword(s):  
Global Financial Crisis ◽  
Jel Classification ◽  
Debt Maturity ◽  
The United Kingdom ◽  
Adjustment Speed ◽  
Generalized Methods Of Moments ◽  
Trade Credits ◽  
The Global Financial Crisis ◽  
Methods Of Moments

This article investigates the role of market differences and the global financial crisis 2007–2009 (GFC) on the adjustment speed of debt issuance, equity issuance, and debt maturity. The sample of 9731 firm-years from highly regulated Main Market (MAIN) and slightly unregulated Alternative Investment Market (AIM) in the United Kingdom was used. Employing system generalized methods of moments, the findings show that AIM firms have a faster adjustment speed of debt and equity before the GFC than MAIN firms. However, it is vice versa after the GFC because AIM firms face greater problems in accessing finance due to the shrinkage of bank credits during the recession. Besides, MAIN firms have faster adjustments on long-term debt over the time, whereas AIM firms have faster adjustment speed of trade credits. Overall, investors should consider market differences and recessions to take accurate decisions on debt-equity and debt maturity to invest where and when. JEL Classification: C26, G01, G32

Sign in / Sign up

Export Citation Format

Share Document