Debt Financing, Corporate Governance and Overinvestment

2011 ◽  
Vol 219-220 ◽  
pp. 1081-1084
Author(s):  
Lei Zhu ◽  
Bei Tang
Keyword(s):  
Listed Companies ◽  
Free Cash Flow ◽  
Debt Maturity ◽  
Debt Financing ◽  
Manufacturing Companies ◽  
Hard Constraint ◽  
Maturity Mismatching ◽  
Chinese Listed Companies ◽  
Investment In China ◽  
The Impact

This paper examines the impact of debt financing on overinvestment in Chinese listed companies. Using an accounting-based framework to measure over-investment and free cash flow, we find evidence that, debt financing can’t mitigate overinvestment in Chinese listed manufacturing companies. Further tests examine whether firm’s governance structures are associated with overinvestment. The evidence suggests that governance factors also can’t mitigate over-investment in China. Reasons lie that hard constraint of debt financing doesn’t play its role in China. There also exists assets maturity and debt maturity mismatching problems in Chinese manufacturing listed companies.

The impact of shareholding structure on firm investment: Evidence from Chinese listed companies

2013 ◽  
Vol 25 ◽  
pp. 85-100 ◽  
Author(s):  
Alex A. Chen ◽  
Hong Cao ◽  
Dayong Zhang ◽  
David G. Dickinson
Keyword(s):  
Listed Companies ◽  
Firm Investment ◽  
Chinese Listed Companies ◽  
The Impact

Innovation-Supporting Effect of Government Versus Private Venture Capital: Evidence from Chinese Listed Companies

2020 ◽  
Vol 19 (3) ◽  
pp. 245-281
Author(s):  
Xiaohui Tao ◽  
Yang Li
Keyword(s):  
Venture Capital ◽  
Negative Binomial ◽  
Negative Binomial Regression ◽  
Threshold Effect ◽  
Listed Companies ◽  
Threshold Test ◽  
Chinese Listed Companies ◽  
Enterprise Innovation ◽  
Private Venture ◽  
The Impact

Abstract Venture capital (VC) can promote the innovation of invested enterprises through financial support, social networking, and intellectual capital. Based on data of Chinese listed companies from 2003 to 2016, this study, firstly, compares the impact of government and private VC on enterprise innovation using Possion regression, and applies the ITCV method and Negative Binomial Regression for Robustness Examination, then, explores the relationship between their shareholding percentage and enterprise innovation with threshold test. The results show that: the performance of private VC is significantly positive and in line. With the increasing shareholding percentage of private VC, the innovation of invested enterprises increases. The overall performance of government VC, however, is not significant, and the shareholding percentage of government VC also has no significant impact on the innovation of invested companies. Additional testing revealed that a “threshold effect” however exists in the impact of the shareholding percentage of government VC on innovation: within a certain range, the higher the shareholding percentage, the more significant the impact on innovations becomes, but beyond that range, the percentage is inversely related to innovation.

scholarly journals Accounting Reforms and Foreign Portfolio Investment in China: An Empirical Investigation

2017 ◽  
Vol 9 (2) ◽  
pp. 60
Author(s):  
Muhammad Umar Draz ◽  
Fayyaz Ahmad
Keyword(s):  
Choice Model ◽  
Listed Companies ◽  
Accounting System ◽  
Portfolio Investment ◽  
Causality Test ◽  
Foreign Portfolio Investment ◽  
Explanatory Variables ◽  
Binary Choice Model ◽  
Investment In China ◽  
The Impact

 The relationship between foreign portfolio investment (FPI) and various macroeconomic variables of China has been discussed in the existing literature. However, the link between China’s accounting reforms and FPI is yet to be explored. This study intends to discover the impact of changes in China’s accounting system and convergence of its domestic accounting standards (henceforth referred to as accounting reforms) on FPI. We have used Binary Choice Model in Eviews for two decades’ data. In our analyses, FPI has been taken as dependent variable, whereas accounting reforms, annual increase in listed companies, GDP growth of China and financial crises are taken as explanatory variables. The results of our model reveal a significant relationship between accounting reforms and FPI; moreover, Granger causality test shows a significant causal relationship between yearly increase in listed companies and FPI. Our findings are theoretically rational and can be useful for both investors and the policymakers.

scholarly journals How Does A Firm’s Previous Social Network Position Affect Innovation? Evidence from Chinese Listed Companies

2019 ◽  
Vol 11 (4) ◽  
pp. 1191 ◽  
Author(s):  
Xuan Wei ◽  
Wei Chen
Keyword(s):  
Social Network ◽  
Time Lag ◽  
Listed Companies ◽  
Negative Binomial Regression Model ◽  
Short Term ◽  
Network Position ◽  
Chinese Listed Companies ◽  
Lag Structure ◽  
The Impact ◽  
Social Network Position

The impact of social network position on innovation has been widely confirmed in past studies. However, research on the time-lag structure of the impact is still insufficient. Within the time window 2010 to 2017, this study constructs a two-mode social network between Chinese listed companies and other participants. To analyze the lag structure of the effect of social network position on innovation, this study uses a panel negative binomial regression model transformed by the Almon polynomial. The results show that a firm does need an advantageous past social network position for innovation. Previous local and global centrality in a social network has a different influence on innovation. For the local centrality indices, degree centrality has a positive impact in the short-term, but has a negative impact in the long-term; the impact of betweenness centrality is not significant in the short-term and is negative in the long run. For the global centrality indices, closeness centrality has a positive influence that decreases with the increase of the time-lag. At the same time, using the method of necessary condition analysis (NCA), this study calculates the bottleneck for a given innovation level. Finally, based on these research conclusions, the theoretical implications and management practice implications are summarized.

scholarly journals The Impact of CSR and Financial Distress on Financial Performance—Evidence from Chinese Listed Companies of the Manufacturing Industry

2020 ◽  
Vol 12 (17) ◽  
pp. 6799 ◽  
Author(s):  
Liu Wu ◽  
Zhen Shao ◽  
Changhui Yang ◽  
Tao Ding ◽  
Wan Zhang
Keyword(s):  
Financial Performance ◽  
Financial Distress ◽  
Manufacturing Industry ◽  
Positive Impact ◽  
Listed Companies ◽  
Research Database ◽  
Listed Firms ◽  
Chinese Listed Companies ◽  
Corporate Social ◽  
The Impact

This paper explores the impact of corporate social responsibility (CSR) and financial distress on corporate financial performance (CFP) in Chinese listed companies of the manufacturing industry. Covering a total of 1445 manufacturing observations from 2013 to 2018 by matching the China Stock Market & Accounting Research Database (CSMAR) and Ranking CSR Ratings (RKS) database and regression models, we find that CSR has a significant positive impact on CFP, and the relationship is more pronounced for firms that are more stable. Further, the win-win relationship of CSR and CFP is also stronger in state-owned enterprises (SOEs). These empirical results suggest that enterprises should actively embrace CSR in response to the call of the country. At the same time, corporate stability should be increased to enhance the role of CSR in promoting CFP. We provide a quantitative analysis of the CSR, CFP, and financial distress of listed firms, and help to alleviate managers’ concern of CSR fulfillment and risk control.

scholarly journals Impact of equity and debt financing on financial performance of quoted manufacturing companies in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. 64-76
Author(s):  
Bibiana Njogo ◽  
◽  
Jaiyeoba Oladele ◽  
Oladotun Mabinuori ◽  
◽  
...  
Keyword(s):  
Corporate Governance ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Secondary Data ◽  
Debt Financing ◽  
Least Square ◽  
Manufacturing Companies ◽  
Earnings Per Share ◽  
The Impact ◽  
A Company

Empirical studies have shown that equity and debt financing is one of the important determinants affecting the performance of a company. This study sought to examine the impact of equity and debt financing on performance on quoted manufacturing companies in Nigeria using the Panel Fully Modified Least Square on secondary data on earnings per share, debt and equity covering the period 2010-2018. To increase earnings, findings show that equity positively influences earnings per share while a negative relationship exists between earnings per share and debt. The study recommends that firms should finance their company majorly with equity shares rather than debt. KEY WORDS: Corporate governance, Equity, Debt, Earnings per share, and Firm’s performance.

Sign in / Sign up

Export Citation Format

Share Document