scholarly journals Mergers, Acquisitions and Financial Performance: A Study of Selected Financial Institutions

2019 ◽  
Vol 9 (1) ◽  
pp. 36-44
Author(s):  
Tarila Boloupremo ◽  
Samson Ogege
Keyword(s):  
Mergers And Acquisitions ◽  
Capital Structure ◽  
Financial Performance ◽  
Financial Institutions ◽  
Significant Relationship ◽  
Positive Relationship ◽  
Cost Control ◽  
Control Variable ◽  
Negative Relationship ◽  
The Impact

The aim of the study is to examine the impact of mergers and acquisition on financial performance in the Nigerian financial system. The study examined selected financial institutions in the banking sector. Specifically, some financial indicators such as asset profile, credit risk, capital structure, liquidity, size and cost control ratios, were extracted from the audited financial reports of the selected banks for the period 2000-2010 to compare the performance of the selected financial institutions in the ex-ante period and compare these performance with the ex post period of their mergers and acquisitions. Longitudinal and time series analyses were employed to observe the performance of the selected banks. Results from the analysis suggest that credit risks showed a better post merger performance, but were statistically insignificant and negatively related with the performance of the selected financial institution pre-merger. Asset profile was found to be significant and positively related with post-merger in relation to the performance of the selected financial institutions, but it was insignificant and negatively related to the financial performance of the selected firms pre-merger. Capital structure of the selected firms was found to be significant and positively related to the performance of the firms’ pre-merger, but insignificant and negatively related to the performance of the firms post-merger. Liquidity of the firms indicated a significant and positive relationship with the performance of the banks pre-merger. However, post merger result indicates that, there was no significant and positive relationship between the liquidity of the firms and financial performance post-merger. The size of the selected banks indicated a significant relationship with their performance in both the pre-merger and post-merger periods. The cost control variable indicated a statistically significant and negative relationship with the performance of the banks post-merger period, but showed no significant relationship with performance of the banks in the pre-merger period. Finally, the results indicate that mergers and acquisitions can have significant impact on the performance of the selected financial institutions in Nigeria.

scholarly journals Capital Structure and Firm Performance: Evidence from Malaysian Public Listed Plantation Companies

2021 ◽  
Vol 5 (1) ◽  
pp. 123-142
Author(s):  
Kim Foong Jee ◽  
Jia En Joanne Ngui ◽  
Pei Pei Jessica Poh ◽  
Wai Loon Chan ◽  
Yet Siang Wong
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Significant Relationship ◽  
Firm Growth ◽  
Control Variable ◽  
Short Term ◽  
Total Debt ◽  
And Performance ◽  
The Impact

This paper examines the relationship between capital structure and performance of firms. The study is confined to plantation sector companies in Malaysia and is based on a sample of 39 firms which listed in Bursa Malaysia for the period from 2009 to 2019. This study uses two performance measures which are ROA and ROE as the dependent variable. Besides, the capital structure measures are the short-term debt, long-term debt, total debt and firm growth, which as the independent variables. Size will be the control variable in this study. Moreover, a fixed-effect panel regression analysis has been used to analyse the impact of capital structure on firm performance. The results indicate that firm performance, which is in term of ROA, have an insignificant relationship with short-term debt (STD) and long-term debt (LTD). For the total debt (TD) and growth, there is a significant relationship with ROA. However, for the performance measured by ROE, it has an insignificant relationship with short-term debt (STD), long-term debt (LTD) and total debt (TD). Furthermore, there is a significant relationship between the growth and the performance firms from plantation sector in Malaysia.

Financial Performance Analysis of Nepalese Financial Institutions in the Framework of CAMEL

2020 ◽  
Vol 9 (1) ◽  
pp. 56-74
Author(s):  
Kedar Raj Gautam
Keyword(s):  
Financial Performance ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Capital Adequacy ◽  
Significant Positive Relationship ◽  
Management Efficiency ◽  
Significant Negative Relationship ◽  
Development Banks

Analysis of financial performance to detect financial health of finance companies, development banks and commercial banks as a whole is a less explored research in Nepalese context. This paper, therefore, attempts to examine the financial performance and factors influencing financial performance of Nepalese financial depositary institutions in the framework of CAMEL. This study is based on descriptive cum casual research design. This study is based on secondary data which was extracted from various publications published by Nepal Rastra Bank such as banking and financial statistics, financial stability report and bank supervision report. All commercial banks, development banks, and finance companies are taken as population of the study. The study deals with financial performance analysis of entire population covering five years from 2014/15 to 2018/19. The variables such as capital adequacy, assets quality, management efficiency, earnings and liquidity are used to analyze financial performance. Descriptive as well as pooled regression analysis was used to assess the relationship among the variables. Descriptive analysis shows that financial institutions in each category meet NRB standard regarding capital adequacy. On the basis of capital adequacy and earnings, finance companies stand at first, on the basis of assets quality, development banks stand at first and on the basis of management efficiency, commercial banks stand at first. Finance companies store high liquidity as compared to other class financial institutions. The regression analysis shows that return on assets, ROA has significant positive relationship with capital adequacy and ROE but ROA has significant negative relationship with assets quality. However, return on equity, ROE has significant positive relationship with assets quality and ROA but ROE has significant negative relationship with capital adequacy. Capital adequacy and assets quality play major role to maximize ROA and ROE of financial institutions.

scholarly journals Do sustainability practices influence financial performance? Evidence from the Nordic financial industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
ABM Fazle Rahi ◽  
Ruzlin Akter ◽  
Jeaneth Johansson
Keyword(s):  
Financial Performance ◽  
Positive Relationship ◽  
Good Governance ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Financial Industry ◽  
Content Type ◽  
Thomson Reuters ◽  
Sustainability Practices ◽  
The Impact

Purpose The purpose of this study is to explore the impact of sustainability (environmental, social and governance or ESG) practices on the financial performance (FP) of the Nordic financial industry. Design/methodology/approach The study covers a sample selection of observations for a total of 152 firm-years for 39 financial companies within the Nordic region (Sweden, Denmark, Finland and Norway) for the business years including 2015–2019. Data regarding ESG and FP indicators were extracted from the Thomson Reuters Eikon database in July 2020. This is a quantitative study using regression and a generalized method of moments. Findings Using static and dynamic estimators, the authors found both positive and negative impacts of sustainability practice on FP. The authors identified a negative relationship between ESG practices and FP (return on invested capital, return on equity and earnings per share). The authors identified a positive relationship between governance and return on assets. Originality/value A key contribution to the accounting literature is the finding that there is a risk for financial firms in adopting sustainability practices, as they follow a logic that contradicts the purely economic rationale. On the other hand, the positive relationship between governance and FP helps not only companies but also regulators and researchers to understand the positive impact of a good governance structure.

scholarly journals The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique

2020 ◽  
Vol 12 (8) ◽  
pp. 3480 ◽  
Author(s):  
Riaqa Mubeen ◽  
Dongping Han ◽  
Jaffar Abbas ◽  
Iftikhar Hussain
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Positive Relationship ◽  
Market Competition ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Ceo Duality ◽  
The Impact ◽  
The Relationship ◽  
Model Technique

This current study is one of the few investigations to conduct a focalized examination of the relationship between CEO duality and firm performance; however, this relationship seems to be imprecise due to the impact of the invention mechanism. This study explores the effect of CEO duality to achieve firm performance through the mediating effects of capital structure and market competition, which is an innovative model. The study incorporated the generalized method of moments (GMM) model to examine the proposed association of the CEO duality and firm performance, and the findings specified a negative relationship between CEO duality and firm performance. The results indicated that capital structure partially mediated the association between CEO duality and firm performance. The results also showed that market competition fully mediated this linkage between CEO duality and firm performance, which in turn specified a significant positive relationship with market competition, which mediated a positive relationship. By incorporating these mediators, the results determined that CEO duality reduces firm performance through the capital structure; however, it enhances firm performance by stimulating market competition.

The Impact of Capital Structure on Financial Performance of the listed Agriculture Companies in Indonesia

2015 ◽  
Vol 3 (1) ◽  
pp. 09-17
Author(s):  
Imelda Suardi ◽  
Kauri Dwitya Noor
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Multiple Regression ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Equity Ratio ◽  
Independent Variable ◽  
The Impact

Objective - The paper analyzes the impact of capital structure on the financial performance of the agriculture companies listed in Indonesia Stock Exchange. In addition, this paper also analyzes which one between equity and asset that is able to cover the firm's debt. Methodology/Technique - The time scope of this thesis is taken from 2010 until 2014 with 16 agricultural companies listed in Indonesia Stock Exchange as the samples. The independent variable in this thesis is capital structure that is measured by Debt Equity Ratio and Debt Asset Ratio. The dependent variable is financial performance that is measured by GPM, NPM, ROA, ROE, and EPS. The methodology used in this thesis is multiple regression and the data is processed by using SPSS. Findings - The result of this paper shows that Debt Equity Ratio, which is one of the indicators of capital structure, has a significant impact and a negative relationship with ROE. Novelty - This study also finds that rather than the land, the value of the company's building contributes more significantly towards the agriculture company's total assets which are more able to cover the debt. Type of Paper - Empirical Keywords : Capital Structure; Financial Performance; Agricultural Company, Profitability Ratio; Debt Equity, Debt Asset

scholarly journals KONSENTRASI KEPEMILIKAN SAHAM DAN DAMPAKNYA TERHADAP KINERJA KEUANGAN PERUSAHAAN DI BURSA EFEK INDONESIA

2014 ◽  
pp. 1-17
Author(s):  
Donalson Silalahi
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Empirical Evidence ◽  
Firm Size ◽  
Stock Exchange ◽  
Control Variable ◽  
Stock Ownership ◽  
Share Ownership ◽  
Before And After ◽  
The Impact

The study aims to: First, obtain empirical evidence about the impact of the concentration of stock ownership to the company's financial performance by using size of the compay and capital structure as a control variable in the Indonesia Stock Exchange. Second, obtain empirical evidence about the the impact of the company's financial performance to the concentration of stock ownership by using the size of the company and capital structure as a control variable in the Indonesia Stock Exchange. Third, obtain empirical evidence about the optimal concentration of share ownership in the Indonesia Stock Exchange. To achieve these objectives, the research conducted at the Indonesian Stock Exchange with a sample size as many as 195 companies and in explaining the relationship between the concentration of share ownership with the company's financial performance, firm size and capital structure as control variables and used t test, F test with α by 10 percent. Based on the results of research, the conclusions can be stated as follows: First, the concentration of share ownership and financial performance of the company can be placed as dependent and independent variables. The concentration of stock ownership have a significant positive effect on the company 's financial performance both before and after included firm size and capital structure as a control variable. Company's financial performance have a significant positive effect on the concentration of ownership of shares before and after included firm size and capital structure as a control variable. That is, the relationship between the concentration of share ownership with the company's financial performance is not a systematic relationship. Second, there is no an optimal concentration of share ownership, but there is a tendency of non- monotonic relationship between the concentration of share ownership with the company's financial performance. That is, the more concentrated the ownership of shares resulting majority shareholder actions that benefit themselves, to the detriment of minority shareholders

scholarly journals CAPITAL STRUCTURE, PROFITABILITY AND FIRM VALUE: EVIDENCE FROM MINING COMPANIES

2018 ◽  
Vol 4 (1) ◽  
pp. 1-12
Author(s):  
Diga Cendekia Budianto ◽  
Yosman Bustaman
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Firm Size ◽  
Firm Value ◽  
Control Variable ◽  
Total Asset ◽  
Revenue Growth ◽  
Mining Companies ◽  
The Impact ◽  
The Capital Structure

This research investigates the impact of firm capital structure on profitability and firm value of the twenty eight mining companies listed in Indonesia Stock Exchange from the year 2009 to 2013. The capital structure is measured by the proportion of debt over total asset, ROA and ROE are used to measure the firm profitability, meanwhile stock price is applied to measure firm value. This study uses panel data regression analysis. After controlling with external factor such as GDP rate and inflation rate, and internal factor such as revenue growth and firm size (total asset), we find leverage has negative impact on ROA however they are not significant, thus it could be said capital structure has no effect on financial performance. The indicators that significantly affect financial performance come from the control variable, which is revenue growth. Our research also finds that the capital structure has a significant effect towards firm value. The firm size and GDP rate is more impactful towards firm value. This contradicts with the MM’s capital structure irrelevance proposition, but supports other theories such as pecking order theory and Trade-off theory

scholarly journals Sustainability of Both Pecking Order and Trade-Off Theories in Chinese Manufacturing Firms

2020 ◽  
Vol 12 (9) ◽  
pp. 3883 ◽  
Author(s):  
Huu Manh Nguyen ◽  
Thi Huong Giang Vuong ◽  
Thi Huong Nguyen ◽  
Yang-Che Wu ◽  
Wing-Keung Wong
Keyword(s):  
Capital Structure ◽  
Firm Size ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Manufacturing Firms ◽  
Model Tests ◽  
Pecking Order ◽  
Trade Off ◽  
Dividend Payout ◽  
The Impact

Our study investigates Chinese manufacturing firms listed on both the Shanghai and the Shenzhen Stock Exchanges. These firms follow the pecking order or trade-off theories in their capital structure choices. Using panel data from the Taiwan Economic Journal and quantile regression, we construct three models to compare the two theories. Our first model tests the impact of profitability, tangible asset, firm size, and investment opportunities on leverage; our second model adds the dividend payout ratio to test the robustness of the first model; and our third model tests how leverage, profitability, firm size, and dividend variables affect a firm’s investments. From the results of all the models used in our study, we find a negative relationship between leverage and both profitability and the dividend payout ratio and a positive relationship between leverage and growth in a firm’s investments. We also find a negative relationship between dividends, firm size, and growth in a firm’s investments and a positive relationship between investment capital and profitability. The overall results indicate that the capital structure decisions of Chinese manufacturing firms are best explained by the pecking order theory.

scholarly journals Capital Structure and Firm Efficiency of Non Financial Institutions in Nepal

2019 ◽  
Vol 12 (1) ◽  
pp. 19-32
Author(s):  
Bhupal Jaishi ◽  
Resam Lal Poudel
Keyword(s):  
Capital Structure ◽  
Financial Institutions ◽  
Positive Relationship ◽  
Financial Institution ◽  
Stock Exchange ◽  
General Structure ◽  
Financial Firms ◽  
The Impact ◽  
Nonfinancial Firms ◽  
The Relationship

Capital structure and firm’s efficiency of non-financial companies of Nepal is a less explored research in the Nepalese context. The paper examines the relationship between leverage and efficiency of non-financial firms in Nepal. This paper employs descriptive as well as casual research design to examine the general structure of leverage and efficiency and their relationship too. Secondary data were employed for the study which was extracted from the annual report of respective companies with 60 observations ranging from two to 14 years. The non-financial institution listed in Nepal Stock Exchange is the population of the study. Fifteen companies representing one from trading, three from the hotel sector, five from manufacturing, six from hydro were selected as the sample for the study employing stratified cum purposive sampling method. The variables namely size, tangibility, growth, profitability, leverage and efficiency were analyzed. Descriptive as well as regression analysis was used to assess the relationship among the variables. Different models were used to test the hypothesis. Most of the Nepalese non-financial institution employs both debt and equity in their capital formation. The firms having high leverage are less efficient and more efficient firms’ use low leverage. Nepalese non-financial institutions increase in size, investment intangible assets and profitability does not necessarily increase the efficiency of the firms. The positive relationship between efficiency and tangibility justify that more investment in tangible assets increases the firm’s efficiency. An increase in sales increases the growth rate of nonfinancial firms as suggested by the positive relationship between size and growth. There is no consistency on the impact of size, tangibility, profitability, and growth on leverage among four industries within nonfinancial firms. The major conclusion of this study is that size, tangibility, profitability, and growth are the significant factors in determining the efficiency and leverage of Nepalese non-financial firms. The firms having high leverage are less efficient and more efficient firms use low leverage.

scholarly journals Hubungan Kepemilikan dan Kinerja Keuangan pada Perusahaan

2020 ◽  
Vol 2 (2) ◽  
pp. 108
Author(s):  
Cindy Radinca ◽  
Riesanti Edie Wijaya
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Control Variable ◽  
Negative Relationship ◽  
Manufacturing Firm ◽  
Firm Financial Performance ◽  
Growth Opportunity ◽  
Asset Turnover

This study aims to determine the effect of capital structure on firm financial performance. This research method uses a quantitative approach. The object of this research is manufacturing firm sector consumer goods industry listed on the Indonesia Stock Exchange in the period 2013-2017. The sample used in this research is 130 years- firms. The dependent variable used is firm performance as measured by Return on Asset (ROA) and Return on Equity (ROE). The independent variable used is capital structure as measured by debt ratio or debt to total asset ratio. And, the control variable used is asset turnover, age of firm, and growth opportunity. The results of this study indicate that the capital structure has a negative relationship and significant on firm performance. This result can be supported by trade-off theory and agency theory. Control variable asset turnover has a positive relationship and significant on firm performance, the age of firm has a positive relationship and significant on firm performance, and growth opportunity has a positive relationship and non-significant on firm performance

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