scholarly journals The Impact of CSR on the Capital Structure of High-Tech Companies in Poland

2021 ◽  
Vol 13 (10) ◽  
pp. 5467
Author(s):  
Barbara Grabinska ◽  
Dorota Kedzior ◽  
Marcin Kedzior ◽  
Konrad Grabinski
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Academic Research ◽  
Debt Financing ◽  
High Tech ◽  
High Tech Industry ◽  
Reporting Practices ◽  
Csr Reporting ◽  
The Impact ◽  
The Capital Structure

So far, CSR’s role in the high-tech industry is not fully explained by academic research, especially concerning the most burdensome obstacle to firms’ growth: acquiring debt financing. The paper aims to solve this puzzle and investigate whether young high-tech companies can attract more debt by engaging in CSR activity. To address the high-tech industry specificity, we divided CSR-reporting practice into three broad categories: employee, social, and environmental and analyzed their impact on the capital structure. Our sample consists of 92 firm-year observations covering the period 2014–2018. Using a regression method, we found out that only employee CSR plays a statistically significant role in shaping capital structure. We did not find evidence for the influence of the other types of CSR-reporting practices. The results suggest that employees are the key resource of high-tech companies, and, for this reason, they are at the management’s focus. This fact is visible at the financial reporting level and, as we interpret results, is also considered by credit providers. In a more general way, our results suggest that firms tend to choose CSR based on the importance of crucial resources.

Comparison of Linear and Nonlinear Models for Panel Data Forecasting: Debt Policy in Taiwan

2005 ◽  
Vol 08 (03) ◽  
pp. 525-541 ◽  
Author(s):  
Hsiao-Tien Pao ◽  
Yao-Yu Chih
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Linear Models ◽  
Nonlinear Models ◽  
High Tech ◽  
Debt Ratio ◽  
High Tech Industry ◽  
Forecast Performance ◽  
Ann Models ◽  
The Capital Structure

This paper discusses the time-series cross-sectional (TSCS) regression and the prediction ability of the artificial neural network (ANN) by examining the panel data of debt ratios of the high tech industry in Taiwan. We build models with these two methods and eight determinants of debt ratio and compare the forecast performances of five models, two ANN nonlinear models and three traditional TSCS linear models. The results show that the sign of each determinant in linear models is the same as that in ANN models. In addition, the insignificant determinants in linear models have low relative sensitivities in ANN models. It seems that these two methods show consistent results for the capital structure determinants. Researchers and practitioners can employ either ANN or traditional statistical model to analyze the important determinants of the capital structure of their firms. The results of comparing the out-of-sample forecasting capabilities of the two methods indicate that: (1) the proposed ANN with 1-year lag model shows better forecast performance than the other three linear models in spite of high or low debt ratio; (2) the debt ratios of the present year are highly related to those of the previous year; and (3) the ANN model is capable of catching sophisticated nonlinear integration effects. Consequently, the ANN method is the more appropriate one between the two methods to be applied to build a forecasting model for the high tech industry in Taiwan.

A qualitative inquiry into the capital structure decisions of overconfident finance managers of family-owned businesses in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hardeep Singh Mundi ◽  
Parmjit Kaur ◽  
R.L.N. Murty
Keyword(s):  
Decision Making ◽  
Capital Structure ◽  
Quantitative Research ◽  
Qualitative Approach ◽  
Debt Financing ◽  
Content Type ◽  
Overconfidence Bias ◽  
The Impact ◽  
Practical Implications ◽  
The Capital Structure

Purpose The purpose of this study is to understand the impact of the overconfidence of finance managers on the capital structure decisions of family-run businesses in the Indian scenario. Furthermore, this study aims to demonstrate that measurable managerial characteristics explain the capital structure decisions of managers. Design/methodology/approach The qualitative approach to research, which aims at understanding a given phenomenon among the experts, is followed. Semi-structured interviews are conducted with 21 overconfident finance managers of family-owned businesses. Content analysis is used to analyse the collected data regarding capital structure decisions into several themes to fully explore the issue in the Indian scenario. Findings In terms of preference for cash or debt, most of the responding overconfident finance managers of family-run businesses agreed that cash is the preferred source of financing over debt financing. This is due to the biased behaviour of overconfident managers, who consider lower availability of debt as a reason to prefer cash over debt financing. The present study reports that overconfident finance managers prefer short- to long-term debt financing. These managers raise certain practical issues, such as stringent debt terms and inflexible repayment schedules, that arise in relation to the long-term debt market. The study also finds that overconfident finance managers do not fully use tax savings. Respondents reported a lack of access to the debt market and a lack of expertise in capital structure decisions as factors in these capital structure decisions. In addition, the study explores various factors, such as the role of government, the Central Bank of India and industry practices, in relation to capital structure decisions. The study finds that the capital structure decisions of these overconfident finance managers are suboptimal because of the presence of overconfidence bias. Research limitations/implications This study gathers information from respondents who are finance managers, not top-level managers, of family businesses; the decision not to interview the higher-ranking managers is a potential limitation of the present study. Another limitation is the small number of respondents in a specific firm size. Because of these factors, the generalisability of the findings of this study will obviously be restricted. Practical implications The present study has several practical implications. The first is the recognition of overconfidence bias as it affects the decision-making of finance managers. Executives, especially finance executives, will benefit from the recognition of overconfidence bias and will understand how the presence of such bias impacts corporate decision-making. Managers will understand that bias leads to faulty decision-making. The study will provide indirect feedback to policymakers and regulators in terms of understanding the role of macroeconomic variables in economic decisions. The qualitative approach followed in the present study may enhance the understanding of capital structure decisions from a psychological perspective. The majority of studies in the review of literature adopt quantitative approaches; so the qualitative approach adopted here represents a methodological innovation, and it may provide a deeper understanding of the matter. Originality/value The existing literature includes quantitative research aimed at understanding the impact of CEO overconfidence on various corporate policies such as capital budgeting, mergers and acquisitions, dividend policy and capital structure decisions. Quantitative research into the presence of overconfidence bias among executives and its impact on corporate policies returns mixed results. To fulfil the need for studies of overconfidence bias among executives with practical implications, this study explores the presence of overconfidence bias among finance managers in family-run businesses and investigates the impact of overconfidence on capital structure decisions.

The impact of high-tech companies’ performance and growth on capital structure

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vladislav Spitsin ◽  
Darko B. Vukovic ◽  
Lubov Spitsina ◽  
Mustafa Özer
Keyword(s):  
Capital Structure ◽  
Financial Stability ◽  
Three Dimensional ◽  
High Growth ◽  
High Tech ◽  
Content Type ◽  
Leverage Ratio ◽  
Two Factors ◽  
The Impact ◽  
The Capital Structure

Purpose The purpose of this paper is to investigate the joint influence of two factors (companies’ performance and growth) on the company’s capital structure and to determine the conditions for financially sustainable competitive strategies in the coordinates profitability and growth. Design/methodology/approach The study sample includes 1,996 companies from 6 high-tech industries in Russia (panel data: 7,984 observations). The authors use regression models with random effects and carry out a three-dimensional visualization of the resulting dependencies. Findings The study found that profitability improves the capital structure (reduces the share of borrowed capital) and, on the contrary, the growth of companies (assets growth or sales growth) increases the leverage ratio. In the case of assets growth, the combined influence of two factors reduces the negative effect of assets growth. The results have shown that the outstripping growth of most high-tech companies requires an increase in debt capital and deterioration in the capital structure and financial stability. Practical implications In general, based on the results of this study, the authors have identified groups of fast-growing companies that need financial support, and have defined the main areas of impact (reducing the loan burden and increasing profitability) that will allow these companies to maintain high growth rates and demonstrate advanced development. Originality/value The relationships (which the authors identified between the control variables, the studied variables and leverage) were obtained for the first time for a sample of companies in high-tech industries and services in bigger transition country (Russia).

Impact Of Local Accounting Standard On IFRS For Defining Firm’s Capital Structure: An Analysis Based On Indian Companies

2016 ◽  
Vol 5 (2) ◽  
Author(s):  
Mr. Surajit Das
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Statistical Significance ◽  
Accounting Standards ◽  
Regression Analyses ◽  
Accounting Standard ◽  
Innovative Design ◽  
Financial Reporting Standards ◽  
The Impact ◽  
The Capital Structure

In this study, the main purpose is to examine the impact of Indian Accounting Standard on International Financial Reporting Standards (IFRS) for defining capital structure components, which has been expressed as ratios. The study employed an innovative design known as “same firm-year” research design (2010-11) and effort is being made to understand its impact. Regression analyses were used to test the statistical significance of this impact and ANOVA were used to test the hypothesis. Main finding from the study is that Indian Accounting Standard has a great impact on IFRS for disclosing the capital structure components. IFRS and Indian Accounting Standards are interrelated for defining the capital structure components. The study found that Indian AS and IFRS are inter-related for disclosing the capital structure components.

Role of Credit Rating in determining Capital structure: Evidence from Non-Financial sector of Pakistan

2020 ◽  
Vol 38 (3) ◽  
Author(s):  
Shoaib Ali ◽  
Imran Yousaf ◽  
Muhammad Naveed
Keyword(s):  
Capital Structure ◽  
Credit Rating ◽  
Least Square ◽  
Annual Data ◽  
Leverage Ratio ◽  
Financial Decisions ◽  
Financial Firms ◽  
High Level ◽  
The Impact ◽  
The Capital Structure

This paper aims to examine the impact of external credit ratings on the financial decisions of the firms in Pakistan.  This study uses the annual data of 70 non-financial firms for the period 2012-2018. It uses ordinary least square (OLS) to estimate the impact of credit rating on capital structure. The results show that rated firm has a high level of leverage. Moreover, Profitability and tanagability are also found to be a significantly negative determinant of the capital structure, whereas, size of the firm has a significant positive relationship with the capital structure of the firm.  Besides, there exists a non-linear relationship between the credit rating and the capital structure. The rated firms have higher leverage as compared to the non-rated firms. The high and low rated firms have a low level of leverage, while mid rated firms have a higher leverage ratio. The finding of the study have practical implications for the manager; they can have easier access to the financial market by just having a credit rating no matter high or low. Policymakers must stress upon the rating agencies to keep improving themselves as their rating severs as the measure to judge the creditworthiness of the firm by both the investors and management as well.

scholarly journals Determinants of Capital Structure within the Context of Corporate Governance in Egypt

2018 ◽  
Vol 13 (8) ◽  
pp. 26 ◽  
Author(s):  
Hanaa A. El-Habashy
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Emerging Economy ◽  
Managerial Ownership ◽  
Listed Firms ◽  
Western Countries ◽  
Specific Factors ◽  
The Impact ◽  
The Capital Structure

This study aims to investigate the characteristics of corporate governance that impact the capital structure decisions in listed firms in Egypt, to test the efficiency of the research results conducted in the developed Western countries in an emerging economy. A sample of 240 observations from the most active non-financial companies collected in the period 2009-2014 was used for hypothesis testing. Multiple regression models (OLS) were used for data analysis. Seven variables are used in measuring the attributes of corporate governance; they are the managerial ownership, institutional shareholding, shares owned by a large block, board size, board composition, separation of CEO/Chair positions and audit type. Four ratios were calculated for measuring the capital structure, they are long-term and short-term debt to assets, total debt to assets and debt to equity. The results suggest that corporate governance attributes have a significant impact on the capital structure decisions of listed Egyptian companies. In addition, firm-specific factors such as profitability, tangibility, growth opportunities, corporate tax, firm size and non-debt tax shields influence the choice of capital structure in Egypt. The results showed the same relationship with what was obtained in developed Western countries. The paper offers some contribution in the literature and helps to understand the impact of corporate governance on Egypt's capital structure as an emerging economy.

scholarly journals Influence of Capital Structure on Corporate Performance of Listed Firm in PSX: Role of External Factors

2021 ◽  
Vol 7 (3) ◽  
Author(s):  
Abdul Hameed ◽  
Farheen Zahra Hussain ◽  
Khawar Naheed ◽  
Muhammad Sadiq Shahid
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Debt Financing ◽  
External Factors ◽  
Least Square ◽  
Total Debt ◽  
Integral Role ◽  
Equity Ratio ◽  
The Impact

Purpose: A company’s capital structure is a blend of its equity and debt financing and is considered a significant factor in the valuation of any firm. The decisions related to capital structure formation play an integral role for the firms, therefore; this research tends to explore the factors of capital structure and their impact on firm performance. For this purpose, financial data for different listed companies in PSX has been gathered, and dividends and taxes are used as firm external factors.  Design/Methodology/Approach: To examine the impact, the panel data has been used for the period 2016-2020 and panel least square has been applied. Findings: The findings suggest that among the variables current ratio, dividends, taxation, total debt to total equity ratio, and the firm size are statistically significant to profitability. The study also concludes that dividends and tax have a greater impact on capital structure and firm performance.   Implications/Originality/Value: Managers and owners of the firms must make sure that their profits are used for future investments rather than payment of debts to avoid bankruptcy.  

scholarly journals The Impact of Flexibility on the Capital Structure

E-conom ◽  
2013 ◽  
Vol 2 (2) ◽  
pp. 128-140
Author(s):  
Ádám Czelleng
Keyword(s):  
Capital Structure ◽  
The Impact ◽  
The Capital Structure

scholarly journals The Influence of Core Technology Capability of High-Tech Industry on Sustainable Competitive Advantage

2021 ◽  
Vol 2021 ◽  
pp. 1-10
Author(s):  
Xi Liu ◽  
Shuai Yang
Keyword(s):  
Competitive Advantage ◽  
Organizational Innovation ◽  
Core Competencies ◽  
Theoretical Research ◽  
High Tech ◽  
Sustainable Competitive Advantage ◽  
Technological Capabilities ◽  
High Tech Industry ◽  
The Core ◽  
The Impact

In order to explore how the core technological capabilities of the high-tech industry affect the sustainable competitive advantage of an enterprise, by consulting a large number of literature studies on sustainable competition, the characteristics of high-tech enterprises were summarized through analysis and sorting and a sustainable competition model was proposed based on market, management, marketing, strategy, and organizational innovation. Through factor analysis, correlation analysis, and structural equations of 266 survey data of related companies, the effectiveness of the model based on the impact of core capabilities of high-tech companies on sustainable competitive advantage was confirmed. The results show that the core competencies of high-tech enterprises’ market recognition, strategic planning, management and operation, full-person marketing, and dynamic marketing directly affect the company’s sustainable competitive advantage. The most important influence on a company’s sustainable competitive advantage is market awareness, and the organizational innovation of the company can also influence the sustainable competitive advantage indirectly, while dynamic marketing can increase the other four capabilities to improve the sustainable competitive advantage of the enterprise. The theoretical model is established to identify the core technological capabilities of high-tech enterprises that can help enterprises effectively identify the core technological capabilities that can form a sustainable competitive advantage and then provide ideas for enterprises to build theoretical research on core technological capabilities.

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