scholarly journals The Impact of Financial Distress on Trade Credit in Indonesian Stock Exchange

2019 ◽  
Author(s):  
Angelica Marcia T Marcia T ◽  
Bernardus Y. Nugroho
Keyword(s):  
Financial Distress ◽  
Trade Credit ◽  
Stock Exchange ◽  
Random Effect ◽  
Fixed Effect Model ◽  
Estimation Model ◽  
Short Term ◽  
Financial Firms ◽  
The Cost ◽  
The Impact

This study examines the use of trade credits by firms that are in a state of financial distress. Trade credit is short-term financing that can be useful for firms in financial distress. The purpose of this study is to analyze the effect of financial distress on trade credit. The study sample was taken from non-financial firms listed on the Indonesian Stock Exchange (IDX) from 2007 to 2016. The research method is panel data regression by using the estimation model of the fixed-effect model and random effect. This study found that firms in financial distress tend to increase the use of trade credit. This is reflected from the results of research showing the positive and significant coefficients on the variable financial distress on the ratio of trade payable to the cost of goods sold and the ratio of trade payable to equity. Based on the results of the study it can be explained that firms that are in a state of financial distress have a larger current liability, its source from short-term financing.

scholarly journals AN EVALUATION OF THE IMPACT OF CAPITAL STRUCTURE ON FIRMS' PERFORMANCE : A QUANTITATIVE STUDY OF SELECTED NON-FINANCIAL FIRMS LISTED ON THE INDONESIA STOCK EXCHANGE DURING THE PERIOD 2005-2012

2018 ◽  
Vol 1 (1) ◽  
pp. 88-105
Author(s):  
Argeta Argeta ◽  
Niken S. Putri
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Random Effect ◽  
Fixed Effect Model ◽  
Transportation Industry ◽  
Financial Firms ◽  
Financial Position ◽  
Industry Effect ◽  
Effect Model ◽  
The Impact

Capital structure is an important element for every company and directly affects the firms' performance and financial position. This study aims to evaluate the impact of capital structure on the performance of non-financial firms listed on the Indonesia Stock Exchange during the period 2005-2012. The data consist of 150 publicly listed non-financial firms from 8 non-financial industries in Indonesia. Panel data for the selected firms were generated and analyzed using both fixed effect model and random effect. The result shows that capital structure (DAR) has a significant impact on firms' performance (ROA, ROE, and GPM) and has no significant impact of capital structure on firms' performance caused by industry differences. Infrastructure, utilities, and transportation industry has the strongest industry effect on the impact of capital structure on firms' performance.

scholarly journals The Impact of Corporate Governance on Earning Management of Non-Financial Firms: Evidence from Pakistan

2021 ◽  
Vol 10 (1) ◽  
pp. 304-312
Author(s):  
MUHAMMAD TAHIR KHAN ◽  
IHTESHAM KHAN ◽  
SHAH RAZA KHAN
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Reporting ◽  
Management Practices ◽  
Stock Exchange ◽  
Research Work ◽  
Fixed Effect Model ◽  
Earnings Information ◽  
Financial Firms ◽  
The Impact

The main objective of the firm is to maximize the shareholder’s wealth; to achieve this objective the management indulge the earnings information by manipulation practices such practices reduce investors’ confidence. Furthermore, a hypothetical dispute recommends that a better quality of financial reporting reduce the information asymmetry, by refining the corporate governance compliance, result in reducing earnings management practices. Thus the main aim of this study is to explore the impact of corporate governance on earnings management by using panel data sample of 257 non-financial firms listed in Pakistan stock exchange for the period of 2012 to 2019 through Fixed effect model along with control variables. The results disclose that the CG system of Pakistan negatively and significantly impacts the EM activities of the companies registered in Pakistan stock exchange. Hence, concludes that the CG system is more effective to prevent the EM process. The entire results are seamless with prior research work that the effective CG scheme of the firms controls the EM and collapse of businesses. Keywords: Earnings Management, Corporate Governance, Corporate Governance Index.

Stock mispricing and investment decisions: evidence from Pakistan

2018 ◽  
Vol 16 (4) ◽  
pp. 725-741
Author(s):  
Usman Muhammad ◽  
Sana Saleem ◽  
Anwar ul Haq Muhammad ◽  
Faiq Mahmood
Keyword(s):  
Stock Exchange ◽  
Random Effect ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Capital Expenditures ◽  
Content Type ◽  
Financial Firms ◽  
Stock Mispricing ◽  
The Impact

Purpose This study aims to examine the impact of stock mispricing on corporate investment decisions by taking the sample of non-financial firms listed on the Pakistan Stock Exchange during the period of 2008-2014. Design/methodology/approach To measure the mispricing, this study decomposes the market-to-book ratio into mispricing and growth components and measures corporate investment by capital expenditures. Fixed and random effect panel regression models are used to estimate the results. Findings Results of the study show that firms issue overvalued equity to finance the capital expenditures. Consistent with other studies, the relationship between stock mispricing and investment is more prominent in the financially constrained firms. In addition, cash flow investment sensitivity is higher in financially unconstrained firms. Practical implications Nonetheless, the results give important implications to the Pakistan Stock Market on how the mispricing enhances the welfare by relaxing the financial constraints and allowing the managers to make investment in profitable projects that otherwise go non-funded. These findings have interesting implications for further research in the literature of finance and also help in economic policy-making. Originality/value This study finds the impact of stock mispricing on corporate investment decisions by considering the role of market timing in the context of Pakistan.

scholarly journals STRUKTUR MODAL PERUSAHAAN-PERUSAHAAN NON KEUANGAN YANG TELAH GO PUBLIC DI BURSA EFEK INDONESIA BERDASARKAN TRADE OFF THEORY

2015 ◽  
pp. 1-13
Author(s):  
Donalson Silalahi
Keyword(s):  
Capital Structure ◽  
Empirical Evidence ◽  
Firm Growth ◽  
Stock Exchange ◽  
Growth Opportunities ◽  
Financial Firms ◽  
Trade Offs ◽  
The Cost ◽  
The Impact ◽  
The Capital Structure

This study aims, First, to obtain the empirical evidence about the capital structure of non-financial firms in Indonesia Stock Exchange. Second, to obtain the empirical evidence about the impact of capital structure on the value of non-financial firms in Indonesia Stock Exchange. Third, to obtain the empirical evidence about the impact of profitability, size of the firm, growth opportunity, the structure of assets, and the cost of bankruptcy to capital structure of non-financial firms in Indonesia Stock Exchange. To achieve these objectives, conducted research on companies listed on the Indonesia Stock Exchange. Research conducted on 163 companies with the observation period in 2011. All the required data obtained from the Indonesian Capital Market Directory. Furthermore, to explain the determinants of capital structure of the firm to used the t and F test with alpha 10 percent. Based on the results of the study, the conclusions as follows: First, the capital structure of the firm has a negative and significant effect on the value of the firm. Second, there is no optimal capital structure on a non-financial corporations. Third, the size of the firm, the structure of assets, and the cost of bankruptcy have positive and significant effect on the capital structure of the firm. Fourth, profitability and the growth opportunities of the firm does not significantly influence to the capital structure. Fifth, variations in the profitability, size of the firm, growth opportunities, the structure of assets, and the cost of bankruptcy are able to explain the variations of capital structure 10,2 percent. Sixth, the coefficient towards research results influence the profitability and bankruptcy costs the company is not in accordance with the trade-offs theory.

scholarly journals Impact of Acquisition on cost efficiency, operational hedging and returns of acquirer firms in Pakistan

2020 ◽  
Vol 13 (3) ◽  
pp. 130-160
Author(s):  
Tahira Awan ◽  
M. Faisal Rizwan ◽  
Syed Zulfiqar Shah
Keyword(s):  
Cost Efficiency ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Income Volatility ◽  
Financial Firms ◽  
Long Run ◽  
Operational Hedging ◽  
Short Run ◽  
The Cost ◽  
The Impact

The current study is aimed at checking the impact of the acquisition on the various short-run and long-run firm characteristics like abnormal returns, cost efficiency, and operational hedging of acquirer firms. Results have been analyzed for Pakistan Stock Exchange for a period of 2006 to 2019.  The acquisition may signal the future prospects of both acquirer and target firms.  The event study technique indicates the significant abnormal returns after 3 days of the acquisition announcement. However, pre-event statistics indicate abnormal returns for 5 out of 7 days before acquisition announcement. Researchers have calculated the cost efficiency scores for bidding firms three years prior to the acquisition and three years post-acquisition. Overall results suggest an improvement in the efficiency of the financial firms' overtime period. The non-financial sector is indicating opposite results where most of the firms are showing a declining trend in efficiency after the acquisition. Next, the impact of the acquisition on the operational volatility is checked. The empirical results have shown a large level decrease in the operational income volatility after the takeover deal. It shows that combined firms after acquisition brings the benefit of diversification thus reducing volatility and increasing operational hedging which may ultimately reduce financial hedging. The findings of the study may help regulators as well as acquiring companies to know the potential effects of the acquisition announcement.

scholarly journals Impact of Ownership Structure on Earnings Management: Evidence from Pakistan

2018 ◽  
Vol 1 (1) ◽  
pp. 51-58
Author(s):  
Amir Rafique ◽  
Mouhammad Hanif Akhtar ◽  
Muhammad Umer Quddoos ◽  
Sher Dil Khan Jadoon
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Institutional Ownership ◽  
Foreign Ownership ◽  
Financial Firms ◽  
Effect Model ◽  
The Impact

The aim of the current study is to examine the impact of ownership structure on earnings management by using three aspects of ownership i.e. managerial, institutional and foreign. The sample consists of non-financial firms included in KSE-100 index of Pakistan Stock Exchange (PSX). The modified Jones model is used to calculate earnings management and random effect model regression is applied to test the impact of ownership structure on earnings management. The findings reveal that firms with high managerial and foreign ownership, engage more in earnings management. However, analysis reveal insignificant relationship between institutional ownership and earnings management.

Analisis Pengaruh Kepemilikan Blockholder, Kepemilikan Manajerial, Kepemilikan Institusional, dan Komite Audit terhadap Nilai Perusahaan

2018 ◽  
Vol 2 (1) ◽  
pp. 96-121
Author(s):  
Iwan Wirawardhana ◽  
Meco Sitardja
Keyword(s):  
Firm Value ◽  
Audit Committee ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Estimation Model ◽  
Effect Model ◽  
Positive Effect

The aim of this study is to analyse the effect of Blockholder Ownership, Managerial Ownership,Institutional Ownership, and Audit Committee towards Firm Value. The background of this research isthe agency theory and ownership theory. The population in this study are 46 property companies listedon the Indonesia Stock Exchange (IDX) for the period 2012-2016. By using purposive samplingtechnique, 35 companies are qualified as data samples. This research uses the random effect model asthe estimation model and multiple regression as the method of analysis. The results of this study showsthat Institutional Ownership has a positive effect on Firm Value. Meanwhile, Blockholder Ownership,Managerial Ownership, and Audit Committee have no effect on Firm Value. Moreover, the F-testimplies that the variables, blockholder ownership, managerial ownership, institutional ownership, andaudit committee, simultaneously influence firm value.

The Impact of Structural Reforms and Regulations on the Demand Side in the Railway Industry

2019 ◽  
Vol 18 (1) ◽  
pp. 1-33
Author(s):  
Fumitoshi Mizutani
Keyword(s):  
Market Structure ◽  
Vertical Integration ◽  
High Speed ◽  
Fixed Effect Model ◽  
Structural Reform ◽  
Estimation Methods ◽  
Public Ownership ◽  
Estimation Model ◽  
Passenger Demand ◽  
The Impact

Abstract The main purpose of this study is to evaluate factors affecting passenger rail demand, with special attention to the effects of structural reform/regulation and competition. In order to do this, we use data obtained from 30 OECD countries for the 24 years from 1990 to 2013. As structural reform/regulation and competition variables, we take the OECD’s five kinds of regulatory indices: (i) overall, (ii) entry, (iii) public ownership, (iv) vertical integration, and (v) market structure; and for competition variables, we take (vi) rail passenger-freight ratio, (vii) rail share, and (viii) high-speed train ratio. As estimation methods, both the fixed effect model and the Hausman-Taylor estimation model are used. The major findings are as follows. First, competition as competitiveness (i.e. the share of rail, passenger over freight ratio) increases passenger demand. And the existence of high-speed trains increases passenger demand. Second, overall, entry regulation, and market structure have no significant effect on demand. Third, public ownership affects passenger demand positively. Last, vertical integration reduces passenger demand.

The Impact of Financial Distress, Corporate Governance, and Auditor Switching on Audit Delay

2021 ◽  
Vol 6 (2) ◽  
pp. 108-117
Author(s):  
Sylvi Angelia ◽  
Rizal Mawardi
Keyword(s):  
Corporate Governance ◽  
Financial Services ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Auditor Switching ◽  
Analysis Technique ◽  
The Impact

Objective – The purpose of this study is to examine the effect between financial distress, corporate governance, auditor switching and audit delay. This research sample using data on a manufacturing company on the Indonesia Stock Exchange. Methodology – The analysis technique used is multiple linear regression analysis technique. Findings– The research finding show that financial distress and the size of the audit committee have a significant effect on audit delay, while the concentration of ownership, managerial ownership, change of directors, and auditor switching has no significant effect on audit delay. Second finding explain that consideration for companies listed on the Indonesia Stock Exchange to pay attention to the timeliness of submitting financial reports and independent auditor reports so as not to get sanctions from the Financial Services Authority. Novelty – Our novelty research using the relationship of Financial Distress, Corporate Governance and Auditor Switching on new research model to Audit Delay. Type of Paper: Empirical JEL Classification: M41, M42 Keywords: Financial Distress, Corporate Governance, Auditor Switching, Audit Delay

scholarly journals Empirical Investigation of Symmetric and Asymmetric Target Adjustment Models: Capital Structure of Non-Financial Firms in Jordan

2017 ◽  
Vol 9 (3) ◽  
pp. 133 ◽  
Author(s):  
Bashar K. Abu Khalaf
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Interaction Model ◽  
Firm Characteristics ◽  
Leverage Ratio ◽  
Financial Firms ◽  
Large Size ◽  
Amman Stock Exchange ◽  
Target Leverage ◽  
The Impact

The different capital structure theories propose the possible asymmetric behavior of capital structure. Thus, this paper empirically investigates whether non-financial Jordanian firms follow symmetrical or asymmetrical adjustment model. Then, an interaction model with the size and profitability (firm characteristics) investigated the impact of low/high profit and small/large size on the adjustment of leverage towards the target leverage ratio. This paper covered the period of 14 years (2002-2015) for a total of 110 companies listed on Amman Stock Exchange (75 industrial and 35 services). Results indicate that although Jordanian firms seek a target leverage ratio, their adjustment towards that target is Asymmetrical and high profitable and large companies tend to adjust faster than low profitable and small size companies.

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