scholarly journals Capital Structure, Financial Performance, and Sustainability of Micro-Finance Institutions (MFIs) in Bangladesh

2020 ◽  
Vol 12 (15) ◽  
pp. 6222
Author(s):  
Syeda Sonia Parvin ◽  
Belayet Hossain ◽  
Muhammad Mohiuddin ◽  
Qingfeng Cao
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Organizational Performance ◽  
Random Effect ◽  
Financial Sustainability ◽  
Net Income ◽  
Negative Effect ◽  
Development Goals ◽  
And Performance ◽  
The Relationship

Capital structure plays an important role in organizational performance. Sources of funds for micro-finance institutions (MFIs) and their performance and financial sustainability become an important topic for the MFIs and poverty alleviation initiatives to achieve sustainable development goals of the UN. We explored the following question: Does the financial structure in terms of financial leverage affect the financial performance: Financial sustainability, depth, and breadth of outreach of MFIs? Our research focuses on studying the relationship between capital structure and financial performance of micro-finance institutions as well as achieving the objectives of this program by reaching out to the deserving clients without collaterals. A dataset of 187 MFIs is used to establish the relationship between the capital structure and performance of MFIs. Panel data regression analysis has been used for this study using the Random effect and Fixed effect models. Return on Asset (ROA), and Net Income to Expenditure (NIER) have been used as measures of financial performance. The findings indicate that Equity to Asset Ratio (EAR), Debt to Loan Ratio (DTL), Risk, and Size are the factors that influence NIER. Furthermore, EAR, and DTL have a positive effect on ROA, and Risk has a negative effect. The findings of this study will enable MFIs to configure their capital structure by creating a portfolio of sources of their capital from market-based sources of funds that can maximize their financial performance and reach out to poor clients without collaterals.

Financing Decisions and Performance of Italian SMEs in the Hotel Industry

2018 ◽  
Vol 60 (4) ◽  
pp. 335-354 ◽  
Author(s):  
Marco Botta
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Optimal Level ◽  
Pecking Order ◽  
Optimal Capital Structure ◽  
Financing Decisions ◽  
Medium Enterprise ◽  
Optimal Capital ◽  
And Performance ◽  
The Relationship

This study investigates the existence of an optimal capital structure for small and medium enterprise (SME) hotels through the analysis of the relationship between financing decisions and financial performance in a large sample of Italian hotel SMEs. The results show that hotel SMEs face an optimal capital structure that allows them to maximize returns to investors, while instead having both too little and too much debt reduces their financial performance. This notwithstanding, we show that hotel SMEs are not particularly concerned with optimizing their capital structure, and their funding behavior is deeply connected with the availability of internally available funds, a typical pecking order behavior, and they result extremely slow in converging toward their optimal level of leverage so that they could improve their performance by adopting a more sophisticated financial strategy.

Empirical Analysis of Dependence on Capital Structure with Respect to Its Impact on the Financial Performance of Domestic Non Financial Listed Stock Exchange Companies Operating in the Public Sector of Pakistan

2016 ◽  
Vol 3 (2) ◽  
pp. 58-76
Author(s):  
Syed Jawad Hussain Shahzad ◽  
Memoona Kanwal
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Random Effect ◽  
Random Effect Model ◽  
Research Work ◽  
Debt Financing ◽  
The Impact ◽  
The Relationship

This research work is based on the relationship that exists between the capital structure and performance of different sector's firms currently operating in the Pakistan. Capital structure decisions can be considered as the most important financial performance and risk management tools which are available to the companies' management. Capital structure can also play an important role in performance assessment, in performance management and in effective handling of ownership claims. The extensive use and heavy dependence on debt has exposed many companies to potential risk of declined performance and also to the risk of insolvency. This study analyzes the relationship between various capital structure indicators and dependence of financial performance of companies on these indicators using a broad sample covering 202 non-financial firms listed on Karachi Stock Exchange (KSE) over the period of 1999-2012. The sample firms are divided into five sectors i.e. Textile, Chemical, Cement, Food and Fuel & Energy. Financial performance of firms is quantified by Return on Assets (ROE), Return on Equity (ROE), Price-Earnings ratio (PE) and Tobin's Q (TQ). The relationship between financial performance measures and capital structure measures i.e. total debt, short term debt and long term debt is estimated using GLS fixed and random effect model. Sector wise comparison shows that majority of the sectors have similar capital structure. The impact of capital structure on the financial performance is also similar across sectors with few variations. Overall the relationship is found to be negative among capital structure and firm performance measured by ROA, ROE and PE except TQ which is positively related to Long Term Debt to total Assets (LTDA). The result of industry wise comparison contributes significantly to the existing stream of knowledge. The results indicate that lower reliance on the debt financing improves the performance of the firm whereas dependence and exposure of debt financing reduce performance. The research can be useful for the management of companies in different sectors that want to improve their performance.

Internationalization and performance: the role of depth and breadth

2018 ◽  
Vol 31 (1) ◽  
pp. 91-104 ◽  
Author(s):  
Andres Velez-Calle ◽  
Fernando Sanchez-Henriquez ◽  
Farok Contractor
Keyword(s):  
Latin America ◽  
Financial Performance ◽  
Latin American ◽  
Content Type ◽  
Negative Effect ◽  
Internationalization Strategies ◽  
And Performance ◽  
Geographical Scope ◽  
The Relationship

Purpose The purpose of this paper is to analyze the relationship between multinationality and firm performance (M-P) in Latin American companies, commonly referred to as multilatinas. The study conceptualizes the depth (intensity) and breadth (geographical scope) of internationalization and examines their effect on financial performance. Although scholars have studied how internationalization in various contexts and industries affects performance, little is known about firms in Latin America. Design/methodology/approach The authors conducted an analysis of the effect of the depth and breadth of multilatina internationalization on financial performance by creating a database using information from America Economia, a specialized Chilean magazine that publishes an annual ranking of multilatinas. Additional data came from the Osiris database of Bureau Van Dijk and Compustat. The hypotheses were tested using an autoregressive heteroskedastic model. Findings The results show that the extent of the depth and breadth of internationalization affects financial performance. Multilatinas’ depth of internationalization has a curvilinear (U-shaped) impact on performance while breadth has an inverted curvilinear impact on performance. Research limitations/implications The theory portion and results expand the literature on firm internationalization and performance by distinguishing between two types of international firm expansion, depth and breadth, and discussing how each contributes to different stages of the three-stage theory of multinationality and performance. Originality/value The findings indicate that multilatinas benefit from their regional expansion, but outside Latin America, expansion has a negative effect on financial performance. They also show that firms can implement different types of internationalization strategies in terms of intensity and scope to achieve better performance.

scholarly journals Moderating Effect of Firm Characteristics on the Relationship between Electric Power Outage Dynamics and Financial Performance of Manufacturing Firms in Kenya

2021 ◽  
Vol 17 (1) ◽  
Author(s):  
Winfred Wanjiku Njiraini ◽  
Mirie Mwangi ◽  
Erasmus Kaijage ◽  
Pokhariyal Ganesh
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Electric Power ◽  
Manufacturing Firms ◽  
Firm Characteristics ◽  
Power Outages ◽  
Power Outage ◽  
Firm Financial Performance ◽  
And Performance ◽  
The Relationship

Past literatures on the correlational link between electric power outage dynamics and performance of manufacturing firms, in most economies, have portrayed a controversial conceptual debate amongst scholars with little focus on the moderating role played by firm characteristics. This paper focuses on determining the effect of firm characteristics (capital structure) on the relationship between electric power outage dynamics and financial performance of manufacturing firms in Kenya. Positivism philosophical point of view and descriptive survey research design was utilized. A population of 447 manufacturing firms in Kenya, which were also members of Kenya Manufacturers Association, was selected out of which a sample size of 138 firms was drawn using stratified random sampling methodology. Structured questionnaires were utilized to collect data which involved drop and pick approach. The research results indicate that the relationship between electric power outage dynamics and performance of manufacturing firms in Kenya is not significantly moderated by firm characteristics. This study outcome augments existing knowledge on electric power outage dynamics in relation to firm characteristics and financial performance. This is because it is evident that top management should not focus on capital structure as a conditional factor when making decisions aimed at enhancing firm financial performance under power outage conditions. The study has also made an input to the academic literature ascending from empirical reinforcement of tradeoff theory and pecking order theory in making determination on firms’ capital investments. Policy makers and power utilities benefit in understanding the negative effect of power outages on the performance of firms are therefore guided in overseeing the planning and implementation of proper electricity infrastructure. Kenya Association of Manufacturers (KAM) will find these research findings useful in guiding their member firms on strategies to adopt to ensure continuous productivity and safeguard damages to the firm as a result of electric power outages.

scholarly journals Motivating Collaborative Consumption in Fashion: Consumer Benefits, Perceived Risks, Service Trust, and Usage Intention of Online Fashion Rental Services

2021 ◽  
Vol 13 (4) ◽  
pp. 1804
Author(s):  
Sae Eun Lee ◽  
Hye Jung Jung ◽  
Kyu-Hye Lee
Keyword(s):  
Financial Performance ◽  
Product Variety ◽  
Collaborative Consumption ◽  
Perceived Risks ◽  
Social Risks ◽  
Consumer Benefits ◽  
Reasonable Cost ◽  
Negative Effect ◽  
And Performance ◽  
The Relationship

This study explored the conceptual constructs of consumer benefits and perceived risks of online fashion rental services (Online FRS) and their impacts on usage intention towards Online FRS. The mediating roles of perceived risks and service trust were examined in this research. A survey was performed on female shoppers between the ages of 20–30 residing in a metropolitan area. Results of this research were as follows: (1) The results analyzing the sub-dimension of benefits (Reasonable cost, Wearing at right time, place and occasion (TPO), Space Saving, Entertaining, Product Variety, Style Conformity) and perceived risks (Financial, Performance, Social) clearly presented factorial structures. (2) Reasonable cost, Style Conformity, and Product Variety showed significantly positive influences on usage intentions towards online fashion rental services; in addition, Financial, Performance, and Social risks of rental services had a negative effect on usage intentions. (3) Service trust and consumer perceptions of Financial and Performance risks had important mediating roles in the relationship between consumer benefits and usage intentions towards Online FRS. This study highlighted that consumer benefits, perceived risks, and service trust should be registered among consumers to boost usage intentions towards Online FRS.

scholarly journals Kinerja Keuangan Memediasi Pengaruh Modal Intelektual dan Struktur Modal pada Nilai Perusahaan di Masa Pandemi Covid-19

2021 ◽  
Vol 31 (10) ◽  
pp. 2503
Author(s):  
Luh Ayu Meliani ◽  
Dodik Ariyanto
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Path Analysis ◽  
Intellectual Capital ◽  
Firm Value ◽  
Sampling Technique ◽  
Company Value ◽  
Negative Effect ◽  
The Relationship ◽  
Positive Effect

This study examines the effect of intellectual capital and capital structure on firm value with financial performance as a mediating variable. The sample was selected by purposive sampling technique. Data were analyzed using path analysis. The results of the analysis show that intellectual capital has no effect on financial performance, but has a positive effect on firm value. Capital structure has a positive effect on financial performance, but has no effect on firm value. Financial performance has a negative effect on firm value. The relationship between capital structure and firm value is successfully mediated by financial performance, however, financial performance does not mediate the relationship between intellectual capital and firm value. This research has implications for those who need information about company value in pharmaceutical sub-sector companies by considering the factors that influence it, especially during the Covid 19 pandemic. Keywords: Intellectual Capital; Capital Structure; Firm Value; Financial Performance.

scholarly journals The Relationship between Capital Structure and Financial Performance of the Company

2021 ◽  
Vol 91 ◽  
pp. 01002
Author(s):  
V.V. Tretiakova ◽  
M.S. Shalneva ◽  
A.S. Lvov
Keyword(s):  
Pharmaceutical Industry ◽  
Capital Structure ◽  
Financial Performance ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Market Capitalization ◽  
Negative Effect ◽  
The Impact ◽  
The Relationship

The article examines and analyzes the relationship of key performance indicators (ROA, ROIC, change in market capitalization and price-to-book ratio) and the capital structure of the company based on the pharmaceutical industry in the UK for the 2009-2019 period. The study seeks to provide a practical evidence on the impact of external financing on company’s financial performance and test applicability of the pecking order theory for the chosen companies. The research conducted uses panel data regression and Wald test to determine and analyze the effect of capital structure on the financial indicators of the company performance. The study used a sample of 185 UK companies from the pharmaceutical industry. The result of the research showed that equity has negative effect on price-to-book ratio and ROA and positive effect on change in market capitalization, while long-term debt has a positive relationship with price- to-book ratio and change in market capitalization. In addition, short-term debt has a negative effect on change in market capitalization, ROA and ROIC. The study also provides only partly coincidence of the results with the pecking order theory.

scholarly journals PENGARUH STRUKTUR MODAL, UKURAN PERUSAHAAN, LIKUIDITAS TERHADAP KINERJA KEUANGAN YANG DIMODERASI INFLASI

2019 ◽  
Vol 2 (2) ◽  
pp. 483
Author(s):  
Cindhy Dahlia
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Financial Performance ◽  
Firm Size ◽  
Significant Positive Effect ◽  
Panel Data Regression ◽  
Data Regression ◽  
Negative Effect ◽  
The Relationship ◽  
Positive Effect

This study aims to obtain empirical evidence on the effect of capital structure, firm size, liquidity of financial performance and inflation as a moderating variable. The number of sample companies used in this study is 168 non financial companies period from 2012 to 2016. The results of this study indicate that on the capital structure have a significant negative effect of financial performance, firm size have a significant positive effect of financial performance, and liquidity have an non significant and positive effect of financial performance. Data were analyzed using panel data regression. Based on the analysis of regression panel data, we concluded that the inflation proved to have a pure moderating influence on the relationship between liquidity of the financial performance. Keyword: Capital Structure, Firm Size, Liquidity, Inflation, Financial performanceAbstrakPenelitian ini bertujuan untuk mendapatkan bukti empiris mengenai pengaruh struktur modal, ukuran perusahaan, likuiditas terhadap kinerja keuangan yang dimoderasi oleh inflasi. Jumlah sampel perusahaan yang digunakan dalam penelitian ini adalah 168 perusahaan non keuangan tahun 2012-2016. Hasil penelitian ini menunjukkan struktur modal berpengaruh negatif dan signifikan terhadap kinerja keuangan, ukuran perusahaan berpengaruh positif dan signifikan terhadap kinerja keuangan, likuiditas berpengaruh positif dan tidak signifikan terhadap kinerja keuangan. Data yang dianalisis menggunakan regresi data panel. Berdasarkan analisis regresi data panel, dapat disimpulkan bahwa inflasi sebagai variabel pure moderating antara pengaruh likuditas terhadap kinerja keuangan.Keyword: struktur modal, ukuran perusahaan, likuiditas, inflasi, kinerja keuangan

“Knowledge management practices” as moderator in the relationship between organizational culture and performance in information technology companies in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Timothy Shea ◽  
Syed Aktharsha Usman ◽  
Sengottuvel Arivalagan ◽  
Satyanarayana Parayitam
Keyword(s):  
Information Technology ◽  
Organizational Culture ◽  
Knowledge Management ◽  
Organizational Performance ◽  
Management Practices ◽  
Self Report ◽  
Content Type ◽  
And Performance ◽  
Information Technology Companies ◽  
The Relationship

Purpose The purpose of this study is to empirically examine knowledge management (KM) practices as a moderator in the relationship between organizational culture and performance. The effect of four types of organizational culture on organizational performance was studied. In addition to direct effects, most importantly, KM practices as a moderator in strengthening the culture-performance relationship were empirically examined. Design/methodology/approach A carefully crafted survey instrument was distributed and data was collected from 1,255 respondents from 10 information technology companies in India. After checking the psychometric properties of the instrument, this paper performs hierarchical regression to test hypotheses. Findings The results reveal that: cooperative culture, innovative culture, consistent culture and effectiveness culture were all positively and significantly related to organizational performance; KM practices were positively and significantly related to organizational performance, KM practices moderate the relationship between various dimensions of organizational culture and organizational performance. Research limitations/implications As with any survey-based research, the present study suffers from the problems associated with self-report measures. These are common method bias and social desirability bias. However, this study attempts to minimize these limitations by following appropriate statistical techniques. Practical implications This study contributes to both practicing managers and the literature on KM and organizational culture. The study suggests that managers use KM practices, which are all-pervasive and very important for improving organizational performance. The results highlight the importance of implementing KM practices in organizations. Originality/value This study provides new insights into the importance of KM practices in achieving sustained competitive advantage by achieving organizational effectiveness. To the knowledge, the importance of KM practices is underemphasized in organizational culture research.

scholarly journals Corporate reputation

2018 ◽  
Vol 25 (1) ◽  
pp. 47-64 ◽  
Author(s):  
Vanessa Pires ◽  
Guilherme Trez
Keyword(s):  
Organizational Performance ◽  
Corporate Reputation ◽  
Research Field ◽  
Social Implication ◽  
Public Companies ◽  
Content Type ◽  
Theoretical Paper ◽  
The Difference ◽  
And Performance ◽  
The Relationship

Purpose The purpose of this paper is to discuss the different approaches to the corporate reputation construct, in order to identify a comprehensive definition that can be used for measurement purposes, gaps identified by previous literature identified. Design/methodology/approach This is a theoretical essay. The authors analyzed studies that involve the relationship between corporate reputation and organizational performance, and the attributes of national and international corporate reputation ratings. Findings The authors identified a more comprehensive definition for the reputation construct, and indicated courses for the construct’s measurement, by considering: the judgment by the stakeholders (internal, suppliers, clients and the financial market); periodical evaluations under different organizational perspectives; attention to theoretical assumptions, among other aspects. Research limitations/implications The study is a theoretical paper that presents that the research field has many definitions that cannot be used interchangeably. It indicated how the reputation construct should be operationalized for measurement purposes. This study presented a reflection on the relationship between corporate reputation and performance, showing that it is not a settled topic in the academy. Practical implications The study advances the understanding of the reputation construct measurement, considering the adopted definition and the discussion of the attributes of the main ratings on corporate reputation. The adoption of a measurement method that takes into account the definition used in this study and the features of the methodologies discussed will improve the corporate reputation assessment. Social implications Literature indicates that a good corporate reputation can affect organizational performance and the inverse relationship is also true. As a social implication, it is extremely relevant to improve the understanding the definition and measurement methods of this construct. Originality/value This study discusses one of the most important intangible resources for organizations, contributing to the understanding of the difference between the market value and the book value of public companies. Besides it should be considered that there is one lack of a definition directly related to the measurement of the reputation construct in the literature, a gap in which this study contributes.

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