scholarly journals The Effect of Access to Debt on Lebanese Small and Medium Enterprises Performance

2020 ◽  
Vol 9 (1) ◽  
pp. 32-44
Author(s):  
Zainab Abdulawood Jadoua ◽  
Nihal Farid Mostapha
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Developing Economies ◽  
Empirical Studies ◽  
Generalized Least Squares ◽  
Developed Countries ◽  
Order Theory ◽  
Theoretical Explanation ◽  
Financial Behavior ◽  
Trade Off

Since thirties access to debt has been considered as one of the main challenges facing the growth of Small and medium-sized enterprises (SMEs). Therefore, empirical studies focused on how facilitating access to debt affects SMEs financial performance in developed countries. However, this is not the case in the developing economies countries such as Lebanon due to the lack of financial transparency and poor financial reporting. In addition, very few studies discussed the theoretical pillar behind SMEs financial behavior on how access to debt affects firm performance in developed and developing countries. Therefore, this study attempts to investigate the effect of access to debt on Lebanese SMEs financial performance in terms of profitability and tangibility. In addition, the study explores the theoretical explanation of how Lebanese SMEs access to debt affects profitability (PR) and tangibility (ST) using trade-off theory (TOT) and pecking order theory (POT). Data of 102 SMEs for the period 2014 till 2017 from 12 official audit firms located in Beirut-Lebanon. Additionally, generalized least squares (GLS) method was used to conduct regression analysis. The analysis reveals the positive effect of Lebanese SMEs access to debt on SMEs profitability and tangibility confirming the adoption of trade-off theory as an approach by Lebanese SMEs and lenders. It is concluded that facilitating Lebanese SMEs access to debt to reach proper debt level improves SMEs performance which in return affects positively the lenders and economy as whole.

Factors impacting on effective implementation of land title registration – a perspective from Ghana

2020 ◽  
Vol 1 (2) ◽  
pp. 23-37
Author(s):  
Benjamin Armah Quaye
Keyword(s):  
Information Management ◽  
Developing Economies ◽  
Empirical Studies ◽  
Developed Countries ◽  
Legal Framework ◽  
Sub Saharan Africa ◽  
Resource Base ◽  
Registration System ◽  
Land Registration ◽  
Effective Implementation

Many governments across Sub Saharan Africa are in the process of introducing or improving land registration and formal titling systems. One of the stated aims is to achieve modern land information management in order to facilitate the development of the land market. It is often assumed that, because formal systems and institutions have enjoyed some positive outcomes in terms of realising wealth in developed countries, they will succeed equally well in developing economies. However, findings from empirical studies across several developing countries show that the performance of formal land registration systems has been mixed. Relying on empirical data from two major cities in Ghana, this paper examines the operations of land registration system with particular reference to its land information management aspects. The analysis shows that a divergence in the implementation of principles of the legal framework and organisational challenges are major contributory factors to deficiencies in the land information regime of the land registration system. Hence, there is a need for effective implementation of well-crafted and functional legal frameworks for land registration, to ensure that the principles and operations of land registration are locally relevant and sensitive. To address the inadequate organisational capacity there is a need to improve the capacity of the human resource base of the officials of the formal land administration sector. The procedure for land registration must also be streamlined in order to eliminate unnecessary requirements and thereby reduce the transaction time, costs of registration and frustration of clients.

scholarly journals Effect of Corporate Financial Leverage on Financial Performance: A Study on Publicly Traded Manufacturing Companies in Bangladesh

2018 ◽  
Vol 14 (12) ◽  
pp. 124 ◽  
Author(s):  
Ripon Kumar Dey ◽  
Syed Zabid Hossain ◽  
Rashidah Abdul Rahman
Keyword(s):  
Financial Performance ◽  
Empirical Studies ◽  
Order Theory ◽  
Manufacturing Companies ◽  
Financial Leverage ◽  
Publicly Traded ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Debt Capital ◽  
Equity Ratio

The study strives to examine the effect of financial leverage on financial performance in a developing country context using two OLS regression models based on panel data consisting of 816 cases (48 companies x 17 years). Financial performance is measured using ROA, ROE, EPS, and Tobin’s Q, and financial leverage is measured using the debt-assets ratio and debt-equity ratio. It is observed that ROA and Tobin’s Q are negatively correlated with financial leverage, which is in line with the assumptions of the pecking order theory, market timing theory, and many empirical studies. However, financial leverage has a positive effect on ROE and no effect on EPS. These results are also consistent with the MM theorem, static trade off theory and many other empirical studies. Yet again, the two OLS models have put forward conflicting results while taking EPS as the dependent variable. The results corroborate the inefficient use of debt capital and suggest the need to improve the reliability of accounting information.

scholarly journals The Influence of Firm Specific Determinants on Financial Performance in the Power Industry

2017 ◽  
Vol 9 (5(J)) ◽  
pp. 18-28
Author(s):  
Mafumbate J ◽  
Ndlovu U ◽  
Mafuka A ◽  
Gavhure P
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Firm Size ◽  
Poor Performance ◽  
Target Population ◽  
Order Theory ◽  
Power Industry ◽  
Trade Off ◽  
The Impact ◽  
Retained Earnings

This study concentrates on the impact of firm specific determinants on financial performance in the power industry. The firm specific determinants used in this study as independent variables were capital structure, firm size and liquidity whilst ROA, ROI and profitability were used as proxies of financial performance. Modigliani and Miller (1958) argue that capital structure has no impact on financial performance whilst the Trade-off theory suggests that the ideal capital structure that helps firm remain financially healthy is the trade-off between cost of leverage and the advantages of debt. Beyond that trade-off point, a firm will start making losses. The target population included 60 employees from all the 5 subsidiaries of the Holding company and researchers used 40 respondents as sample size to enhance reliability. A relationship was established between firm specific determinants and financial performance as measured by ROA, ROI and profitability. The results showed a negative but significant relationship between capital structure and financial performance and they support the pecking order theory which suggests that capital structure is a significant determinant of financial performance. Firm size and financial performance were also negatively related. However, a significant positive relationship was established between liquidity and financial performance. From the findings the researchers concluded that firm specific factors have a significant impact on financial performance. Researchers therefore recommend that ZESA holdings should use its internal funds such as retained earnings and more equity than debt when financing its activities so as to reduce leverage costs which lead to poor performance. 

scholarly journals The Association between Board of Directors Characteristics and the Level of Voluntary Disclosure: Evidence from Listed Banks in Borsa Istanbul

2020 ◽  
Vol 2 (1) ◽  
pp. 166-185
Author(s):  
Isam Abdelhafid A. Milad ◽  
Ali Altug Bicer
Keyword(s):  
Board Of Directors ◽  
Voluntary Disclosure ◽  
Banking Sector ◽  
Empirical Studies ◽  
Generalized Least Squares ◽  
Developed Countries ◽  
Annual Reports ◽  
Board Independence ◽  
Least Squares Regression ◽  
Board Size

The main aim of this study is to investigate the association between some board of directors characteristics (board independence, board size, board meetings and role duality) and the level of voluntary disclosure in annual reports of listed banks in Borsa Istanbul The deductive approach was adopted by developing hypotheses based on the relevant theories and findings of previous studies. Also, the panel data strategy was applied to analyze the collected data from annual reports across five years (2013-2017). The univariate statistical analysis and the multivariate Feasible Generalized Least Squares regression model are used in this study. The results showed that board independence, board size and board meetings were positively and significantly associated with the level of voluntary disclosure, whilst role duality was negatively but no significantly associated with the level of voluntary disclosure. The results also indicated that all bank characteristics were positively and significantly associated with the level of voluntary disclosure. Most prior studies on voluntary disclosure practices have been undertaken in the developed countries and a few of them have focused on voluntary disclosure practices in the banking sector during a number of years (longitudinally). There is a requirement for more empirical studies in this area to confirm or disprove the previous results. This study will add value to the knowledge in the disclosure literature by clarifying the relationship between the board of directors' characteristics and voluntary disclosure in the banking sector of developing countries.

scholarly journals The Influence of Firm Specific Determinants on Financial Performance in the Power Industry

2017 ◽  
Vol 9 (5) ◽  
pp. 18
Author(s):  
Mafumbate J ◽  
Ndlovu U ◽  
Mafuka A ◽  
Gavhure P
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Firm Size ◽  
Poor Performance ◽  
Target Population ◽  
Order Theory ◽  
Power Industry ◽  
Trade Off ◽  
The Impact ◽  
Retained Earnings

This study concentrates on the impact of firm specific determinants on financial performance in the power industry. The firm specific determinants used in this study as independent variables were capital structure, firm size and liquidity whilst ROA, ROI and profitability were used as proxies of financial performance. Modigliani and Miller (1958) argue that capital structure has no impact on financial performance whilst the Trade-off theory suggests that the ideal capital structure that helps firm remain financially healthy is the trade-off between cost of leverage and the advantages of debt. Beyond that trade-off point, a firm will start making losses. The target population included 60 employees from all the 5 subsidiaries of the Holding company and researchers used 40 respondents as sample size to enhance reliability. A relationship was established between firm specific determinants and financial performance as measured by ROA, ROI and profitability. The results showed a negative but significant relationship between capital structure and financial performance and they support the pecking order theory which suggests that capital structure is a significant determinant of financial performance. Firm size and financial performance were also negatively related. However, a significant positive relationship was established between liquidity and financial performance. From the findings the researchers concluded that firm specific factors have a significant impact on financial performance. Researchers therefore recommend that ZESA holdings should use its internal funds such as retained earnings and more equity than debt when financing its activities so as to reduce leverage costs which lead to poor performance. 

Capital structure and its choice in Central and Eastern Europe

2012 ◽  
Vol 62 (2) ◽  
pp. 229-263 ◽  
Author(s):  
Péter Hernádi ◽  
Mihály Ormos
Keyword(s):  
Capital Structure ◽  
Eastern Europe ◽  
Central And Eastern Europe ◽  
Negative Impact ◽  
Positive Impact ◽  
Developed Countries ◽  
Order Theory ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Financial Decision

We analyze the determinants of capital structure and its choice by small and medium-sized enterprises in Central and Eastern Europe from 2002 to 2007. We test the relevance of the three main theories: the Static Trade-off Theory, the Pecking Order Theory, and the Agency Theory, which have been derived primarily for developed markets, because our knowledge on their validity for emerging European countries is limited. We confirm the positive impact of size and asset tangibility on the leverage, while rejecting both the positive impact of profitability and tax, as well as the negative impact of business risk and non-debt tax shields. We report that SMEs behave homogeneously, and the relevant capital structure determinants show remarkable steadiness. Our results show a special time varying behaviour, in which the relevant determinants become stronger, while most of the country-specific factors present weakening effects. We argue that firms of the CEE countries remarkably converged their financial decision-making procedure to that of developed countries through the investigated period. The relevance of the Trade-off Theory is weak, as firms respect a one-sided upper threshold rather than converging to a fixed target on both sides, while they are not indifferent to the hierarchy of financing alternatives.

scholarly journals Strategic management accounting practices: a literature review and opportunity for future research

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md. Mamunur Rashid ◽  
Md. Mohobbot Ali ◽  
Dewan Mahboob Hossain
Keyword(s):  
Firm Performance ◽  
Strategic Management ◽  
Developing Economies ◽  
Management Accounting ◽  
Empirical Studies ◽  
Developed Countries ◽  
Future Research ◽  
Bottom Line ◽  
Content Type ◽  
Strategic Management Accounting

PurposeThe purpose of this study is to review the empirical studies that have focused on the adoption, benefits and contingencies of strategic management accounting (SMA) practices and the effects of adoption on firm performance.Design/methodology/approachThe study has highlighted empirical studies conducted on SMA practices in the context of both developed [1] and developing economies. In reviewing the literature, the study focuses on the findings of developed economy separately from that of developing economy to get more insight into the differences in the practices of the two set of economies. Based on the review, avenues for future research studies are outlined.FindingsThe review of extant literature reveals that several SMA techniques such as competitor accounting, strategic pricing, benchmarking and customer accounting have been highly or moderately adopted in several developed countries while majority of other techniques remained at the bottom line of the adoption status. However, the review demonstrates substantial differences in the SMA practices between the two set of economies in terms of the level of adoption, contingent factors and the effects of adoption.Originality/valueThe study attempts to focus on empirical studies that have concentrated exclusively on SMA practices. The adoption status, benefits derived, contingent factors affecting the adoption decision and the effect of adopting a package of SMA techniques on several aspects of firm performance are presented in the context of both developed and developing economies.

scholarly journals Pecking Order Theory and Trade-Off Theory of Capital Structure: Evidence from Indonesian Stock Exchange

The Winners ◽  
2012 ◽  
Vol 13 (1) ◽  
pp. 40
Author(s):  
Priska Ralna Eunike Culata ◽  
Tri Gunarsih
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Empirical Studies ◽  
Listed Companies ◽  
Order Theory ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Trade Off ◽  
Optimal Capital Structure ◽  
Optimal Capital

Numerous empirical studies in the finance field have tested many theories for firms’ capital structure. The pecking order theory and the trade-off theory of capital structure is among the most influential theories of firms’ capital structure. The trade-off theory predicts optimal capital structure, while the pecking order theory does not predict an optimal capital structure. According to pecking order theory,  the order of financial sources used is the source of internal funds from profits, short-term securities, debt, preferred stock and common stock last. The main objective of this study is to econometrically test whether the listed companies in Indonesian Stock Exchange follow the pecking order theory or the trade-off theory. Samples in this study are public companies listed during 2009-2010. The research questions are tested by running regression models.  The empirical result of this study shows that the pecking order theory is not supported, while the trade-off theory is supported. This suggests that the capital structure of listed companies in Indonesian Stock Exchange is financed based on optimal capital structure, not by the order financial resources.

Is inflation targeting useful for economic growth?

2017 ◽  
pp. 62-74 ◽  
Author(s):  
P. Kartaev
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Test Performance ◽  
Inflation Targeting ◽  
Developing Economies ◽  
Empirical Studies ◽  
Growth Regime ◽  
Potential Channels

The paper presents an overview of studies of the effects of inflation targeting on long-term economic growth. We analyze the potential channels of influence, as well as modern empirical studies that test performance of these channels. We compare the effects of different variants of inflation targeting (strict and mixed). Based on the analysis recommendations on the choice of optimal (in terms of stimulating long-term growth) regime of monetary policy in developed and developing economies are formulated.

Panel Data Analysis of Determinants of Leverage in the Automobile Industry in India

GIS Business ◽  
2018 ◽  
Vol 13 (2) ◽  
pp. 29-47
Author(s):  
Vibha Tripathi
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Automobile Industry ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Order Theory ◽  
Ordinary Least Squares ◽  
Pecking Order ◽  
Trade Off ◽  
Coverage Ratio

The study tries to investigate the key determinants of capital structure of leading automobile companies and the Automobile Industry in India. The study also tracks the theory implications, i.e. trade off vs. pecking order in these firms and the industry in general. An attempt is to see, if individually each sample company and the whole industry are influenced by the same determinants of capital structure. Pooled ordinary least squares and panel data econometric techniques such as fixed effect models are used to investigate the most significant determinants that affect the capital structure choice of 10 leading companies categorized as BSE Auto Top 100 and the Automobile Industry as a whole for a period of 14 years from 2000–2001 to 2013–2014. The study reveals some interesting facts and results. Multiple regression analysis reveals that while profitability and size are significant determinants in most of the leading companies; NDTS, Growth, and Debt service coverage ratio are not significant for these companies. While the Panel data results of the Automobile Industry as a whole reveals that profitability is the only significant determinant having negative relationship with debt equity ratio; and the other variables are insignificant. Also individual companies coefficient results shows implications of mix of pecking order and trade off theories while the panel data results of the whole Industry strongly supports the Pecking order theory.

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