scholarly journals Financial Leverage And Firms’ Investment Decisions: Evidence from Banking Sector of Pakistan

2020 ◽  
Vol 18 (2) ◽  
pp. 163-174
Author(s):  
Vijay Kumar ◽  
◽  
Abdur Rahman Aleemi
Keyword(s):  
Panel Data ◽  
Interest Rates ◽  
Random Effects ◽  
Cash Flow ◽  
Fixed Effects ◽  
Banking Sector ◽  
Investment Decision ◽  
Investment Decisions ◽  
Future Research ◽  
Financial Leverage

This paper aims to find out the effects of financial leverage on firms’ investment decisions in the Banking Sector of Pakistan. Utilizing panel data techniques along with common effects, fixed effects, and random effects for listed banks from 2006 to 2013, the results indicate that leverage is having no significant effect on the investment decision of banks in Pakistan and hence we support Modigliani and Miller (1958) proposition of Irrelevance theory. To current study is going to provide useful insights to banks and investors that investment decision is irrelevant to the way company is financed, rather banks must focus on other factors such as interest rates, available cash flow, profitability which are found to be relevant to the investment decision. It will also serve as basic literature for future research.

Investment decisions and the role of debt, liquid assets and cash flow: evidence from Italian panel data

1994 ◽  
Vol 4 (2) ◽  
pp. 121-132 ◽  
Author(s):  
Marzio Galeotti ◽  
Fabio Schiantarelli ◽  
Fidel Jaramillo
Keyword(s):  
Panel Data ◽  
Cash Flow ◽  
Investment Decisions

Insider Trading Laws and Corporate Governance Impact on Investment Decision

2021 ◽  
Vol 3 (2) ◽  
pp. 126-137
Author(s):  
Sadaf Khan ◽  
Ubaid Ur Rehman
Keyword(s):  
Corporate Governance ◽  
Insider Trading ◽  
Positive Impact ◽  
Investment Decision ◽  
Investment Decisions ◽  
Future Research ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Government ◽  
The Impact

This research aims to analyze the impact of insider trading laws and corporate governance on investment decisions. For this purpose, the data of 400 potential and actual investors employed who provided their feedback on a structured questionnaire. When the data is collected, it was cleaned. The normality of data and reliability of items were also checked and within limits. Simple Regression was applied to test hypotheses. It was concluded that the perception of insider trading laws and corporate governance have a positive impact on investment decisions. The study has wide implications and the government and corporation both can be beneficial from its insight and findings, and exercise good corporate governance practices and follow stringent insider trading laws. The study also paves the way for future research.

scholarly journals Investment Decision In Micro, Small And Medium Enterprises In Indonesia*

2013 ◽  
Vol 14 (1) ◽  
pp. 1
Author(s):  
Siti Aisyah Tri Rahayu
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Cash Flow ◽  
Investment Decision ◽  
Inflation Expectations ◽  
Real Sector ◽  
Debt Ratio ◽  
The Real ◽  
Internal Capital ◽  
The Impact

The purpose of this study are: First, to analyze is there any significant influence among debt ratio, internal capital, cash flow, inflation expectations and the expectations of rupiah exchange rate against the decisions of businessmen in the real sector to invest or not to invest; Second, to analyze the impact of the variables perception mortgage interest rates, perceptions of bank regulation, internal capital and cash flow on debt ratio of the real sector (leverage). Investment decision model is estimated using logit models. The results of regression estimates the overall good for business and risk analysis for financial risk shows that almost all explanatory variables in the equation are statistically significant. There are three variables have a positive influence on the investment decisions taken by the businesses i.e. the debt ratio, cash flow and exchange rate expectations.

Assessing the effects of flight delays, distance, number of passengers and seasonality on revenue

Kybernetes ◽  
2019 ◽  
Vol 48 (9) ◽  
pp. 2138-2149
Author(s):  
Murat Guven ◽  
Eyup Calik ◽  
Basak Cetinguc ◽  
Bulent Guloglu ◽  
Fethi Calisir
Keyword(s):  
Panel Data ◽  
Fixed Effects ◽  
Future Research ◽  
Negative Effects ◽  
Flight Delays ◽  
Content Type ◽  
Positive Effects ◽  
Common Correlated Effects ◽  
Flight Delay ◽  
Airline Company

Purpose This study aims to investigate the effects of flight delays, distance, number of passengers and seasonality on revenue in the Turkish air transport industry. Design/methodology/approach The domestic return routes of a Turkish airline company were examined to address this issue. Among five cities and six airports, 14 major domestic return routes were selected. The augmented mean group (AMG) estimator and common correlated effects mean group (CCEMG) estimator were conducted with a two-way fixed effects (FE) robustness test in this study. Findings The results show that arrival flight delay and departure flight delay had negative effects on revenue, whereas the distance between airports, the number of air passengers and seasonality had positive effects on revenue. Research limitations/implications The data used in this study were retrieved from a Turkish airline company; for future research, other airline companies operating in Turkey may be included. Practical implications These findings could be evaluated by air transportation leaders to provide a guide to make strategic decisions to achieve greater performance in this competitive environment. Originality/value The originality of the paper comes from the facts that besides distance and number of passengers, the authors control for the seasonality when assessing the effects of flight delay on revenue; they use panel data techniques, which permit them to control for individual heterogeneity, and create more variability, more efficiency and less collinearity among the variables; they use two recent panel data techniques, CCEMG and AMG, allowing for cross-section dependence.

scholarly journals Bank-Specific and Macroeconomic Determinants of Profitability: A Revisit of Pakistani Banking Sector under Dynamic Panel Data Approach

2020 ◽  
Vol 8 (3) ◽  
pp. 42 ◽  
Author(s):  
Habib-ur Rahman ◽  
Muhammad Waqas Yousaf ◽  
Nageena Tabassum
Keyword(s):  
Panel Data ◽  
Interest Rates ◽  
Economies Of Scale ◽  
Banking Sector ◽  
Unobserved Heterogeneity ◽  
Dynamic Panel Data ◽  
Capital Adequacy ◽  
Bank Failures ◽  
Dynamic Panel ◽  
Macroeconomic Determinants

This study aims to examine the effect of the bank-specific and macroeconomic determinants of profitability for the banking sector of Pakistan. To incorporate the issues of endogeneity, unobserved heterogeneity, and profit persistence, we apply a generalised method of moments (GMM) technique under the Arellano–Bond framework to a panel of Pakistani banks that covers the period 2003–2017. The results of a dynamic panel data approach reveal that capital adequacy accelerates the profitability of the banking sector in Pakistan. Capital adequacy helps the financial system to absorb any negative shock by reducing the number of bank failures and losses. Conversely, our empirical investigation reveals that the liquidity ratio, business mix indicators, interest rates, and industrial production deteriorates the bank profitability. Liquidity risks enhance the probability of default risks and transmit into the unpaid loans and hence the lower return. Our empirical evidence further reveals that Pakistani banks are not getting any benefit of the economies of scale in terms of financial performance.

scholarly journals Impact of Operating Cash Flow, Profitability, Financial Leverage, Trading Activities and Liquidity on Financial Distress of Banking Industry of ASEAN Countries

2020 ◽  
Vol 2 (2) ◽  
pp. 113-132
Author(s):  
Ruqayya Ibraheem ◽  
Ramsha Saleem ◽  
Altaf Hussain
Keyword(s):  
Cash Flow ◽  
Financial Distress ◽  
Banking Sector ◽  
Banking Industry ◽  
Random Effect ◽  
Random Effect Model ◽  
Financial Leverage ◽  
Trading Activities ◽  
Operating Cash Flow ◽  
Asean Countries

Recently, financial distress has become a significant issue, especially for the banking sector, that is considered as the backbone of the economy. Thus, the present study aim is to examine the effects of operating cash flow, profitability, financial leverage, trading activities and liquidity on financial distress of the banking industry of ASEAN countries. The researchers have extracted the data from the central banks of ASEAN countries for the year 2009 to 2018. The random effect model along with generalized method of moment (GMM) approaches have been used to check the predictors such as operating cash flow, profitability, financial leverage, trading activities and liquidity on financial distress of banking industry of ASEAN countries. The results revealed that all the predictors such as operating cash flow, profitability, financial leverage, trading activities and liquidity have a positive association with the financial distress of the banking industry of ASEAN countries. These outcomes provide the guidelines to the regulation-making authorities that they should enhance their focus on the issue of financial distress that could improve the financial position of the banks along with the country.

scholarly journals ANALISIS FAKTOR –FAKTOR YANG MEMPENGARUHI KEPUTUSAN INVESTASI PADA PERUSAHAAN PERTAMBANGAN LOGAM DAN MINERAL YANG TERDAFTAR DIBURSA EFEKINDONESIA

2020 ◽  
Vol 3 (2) ◽  
pp. 283-288
Author(s):  
Eko Deswin Miechaels Siringo-Ringo ◽  
Keyword(s):  
Panel Data ◽  
Time Series Data ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
Series Data ◽  
Net Income ◽  
Mineral Mining ◽  
Mining Companies ◽  
Inventory Turnover

his study aims to analyze whether Net Profit, Leverage, Liquidity, Inventory Turnover, and Profitability have an influence on investment decisions of metal and mineral mining companies listed on the Indonesia Stock Exchange during 2018 and 2019. The population in this study are metal and mineral mining companies. listed on the Indonesia Stock Exchange, amounting to 11 companies. And 7 metal and mineral mining companies in this study were used as samples. Sources of data used in this study are secondary data, the data used are the financial statements of metal and mineral mining companies sampled obtained through the Indonesia Stock Exchange published on the website www.idx.co.id. The analytical method used in analyzing the data in this study is panel data regression analysis. The sampling method used is the panel data method which is a combination of cross section data and time series data. The independent variables in this study are Net Income, Leverage, Liquidity, Inventory Turnover, Profitability, and thedependent variable namely Investment Decision. The results of this study indicate that Leverage,and Profitabilityhave a positive effect on Investment Decisions,Liquidity, and Inventory Turnover, while Net Income has a negative effect on Investment Decisions.Keywords: Investment Decision, Net Income, Leverage,Liquidity, Inventory Turnover, and Profitability

scholarly journals Trade-Off Variables and Market Value: An Estimated Panel Data Study of Quoted Small and Medium Scale Enterprises from Nigeria

2021 ◽  
Vol 04 (08) ◽  
Author(s):  
Anyamaobi Chukwuemeka ◽  
Keyword(s):  
Panel Data ◽  
Random Effects ◽  
Significant Relationship ◽  
Firm Value ◽  
Fixed Effects ◽  
Market Value ◽  
Equity Capital ◽  
Trade Off ◽  
Medium Scale

This study was undertaken to examine the relationship between trade off variables and market value of quoted small and medium scale enterprises in Nigeria. Secondary data obtained from financial statement of 10 quoted small and medium scale enterprises from 2009 – 2018. Market value was modeled as the function of, non-tax shield, business risk and tangibility. Panel data methods were employed while the fixed and random effects models were used as estimation technique at 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. Panel unit roots and panel cointegration analysis were conducted on the study. The study found that trade off variables has significant relationship with market value of the small and medium scale enterprises. From the regression summary, we conclude that, trade off variables have significant relationship with market value of the small and medium scale enterprises. We recommend that financial managers should institute sound, efficient and coherent capital structure management policies such that will enable them determine the right mix or combination of debt, equity or both that will enhance firms’ value in Nigeria. Firm should expand to a level it does not result to diseconomies of scale and the eventual fall in the value of the small and medium scale enterprises. Government and policy makers should provide an enabling market environment capable of enhancing easy source of capital to enhance firm value in Nigeria. Management of the small and medium scale enterprises should employ more of long-term debt than equity capital in financing their operations, because it results in higher small and medium scale enterprises value. Corporate financial decision makers should employ more of long-term-debt than equity in their financial option. This is in line with the pecking order theory. Management of the small and medium scale enterprises should compare the marginal benefit of using long-term-debt to the marginal costs of long-term-debt before concluding on using it in financing their operations. This is because as shown by this work, long-term-debt impact positively on firm’s value unlike equity capital.

scholarly journals FORECASTING MONEY DEMAND WITH THE INCLUSION OF FINANCIAL INNOVATION FOR THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS: EVIDENCE FROM PANEL DATA ANALYSIS

2019 ◽  
Vol 1 (1) ◽  
pp. 59-74
Author(s):  
Payam Mohammad Aliha ◽  
Tamat Sarmidi ◽  
Fathin Faizah Said
Keyword(s):  
Time Series ◽  
Panel Data ◽  
Random Effects ◽  
Money Demand ◽  
Fixed Effects ◽  
Random Effects Model ◽  
Fixed Effects Model ◽  
Demand For Money ◽  
Financial Innovations ◽  
The Impact

This paper investigates the impact of financial innovations on the demand for money using a dynamic panel data for 10 ASEAN member states from 2004 to 2012 and attempt to forecast the demand for money during 2013 – 2016 to compare between forecasting performance of the fixed effects model with that of random effects model and also to compare the forecasting accuracy of dynamic forecasting and static forecasting obtained from these two models. An autoregressive model by definition is when a value from a time series is regressed on previous values from that same time series. There are two types of forecasting namely dynamic forecast and static forecast. “Dynamic forecast will take previously forecasted values while static forecast will take actual values to make next step forecast. Panel effects models assist in controlling for unobserved heterogeneity when this heterogeneity is constant over time and correlated (fixed effects) or uncorrelated (random effects) with independent variables. Hausman test indicates that the random-effects model is appropriate. We use the conventional money demand that is enriched with the number of automated teller machines (ATM) to proxy for the effect of financial innovations on money demand. By comparing the magnitude of “Root Mean Squared Error” (RMSE) as a benchmark for the two forecasts (0.1164 for dynamic forecast versus 0.0635 for static forecast) we simply find out that static forecast is superior to dynamic forecast meaning that static forecast provides more accurate forecast compared to a dynamic forecast for the fixed-effects model. Therefore, we conclude the static forecast on the basis of the random-effects model provides the most accurate forecasting. The estimation result of the chosen random-effects regression also indicates the estimated coefficient of ATM is not significant meaning that ATM does not impact money demand in ASEAN countries.

scholarly journals What Determines Price-to-Earnings Ratios: An Empirical Evidence from Banking Sector of Pakistan

2021 ◽  
Vol 3 (1) ◽  
pp. 13-21
Author(s):  
SAFDAR HUSSAIN TAHIR ◽  
MUHAMMAD RIZWAN ULLAH ◽  
DR. SAID SHAH
Keyword(s):  
Time Series ◽  
Panel Data ◽  
Banking Sector ◽  
Panel Data Analysis ◽  
Investment Decision ◽  
Decision Makers ◽  
Individual Investors ◽  
Significant Determinant ◽  
Fund Managers ◽  
Investment Opportunities

It is of greater importance to understand the factors influencing P/E ratio for the fund managers, decision makers, market analysts and individual investors. Variability in shares prices and investment opportunities in Pakistani listed banking firms motivate to examine the determinants of P/E ratio using time-series as well as panel data analysis for the period of 2007 to 2014. The findings of panel data indicate significant variation in P/E ratio due to MktRtrn, VMP and SIZE. DP ratio is found to be the most influential determinant of P/E ratio indicating the willingness of investors to invest more funds in those banking firms paying greater dividends. Empirical outcomes of time-series analysis for banking industry represent that DP ratio is the super most imperative determinant of P/E ratio. Findings also indicate that P/E ratio vary across years and influence the investor’s investment decision. The findings of the study facilitate the decision makers by investigating the most significant determinant of P/E ratio of banking firms in order to attract attention of investors and increase their confidence to choose these firms in their portfolios.

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