scholarly journals Financial Mismatch, Assets Specificity and Capital Structure

2019 ◽  
Vol 11 (2) ◽  
pp. 236
Author(s):  
Yanwu Li
Keyword(s):  
Capital Structure ◽  
Financial Market ◽  
Stock Exchange ◽  
Governance Structure ◽  
Debt Financing ◽  
Asset Specificity ◽  
Private Companies ◽  
Market Governance ◽  
The Impact ◽  
The Relationship

At present, the problem of financial mismatch poses great challenge to China’s financial market. Financial mismatch blurs the market governance structure of debt financing, thus distorting the relationship between asset specificity and capital structure. This paper investigates companies listed on the A-share of Shanghai and Shenzhen Stock Exchange from 2012 to 2017. It tests the existence of financial mismatch and the impact of financial mismatch on asset specificity and capital structure. Empirical results show that the impact of financial mismatch on the relationship between asset specificity and capital structure of sample companies exhibits no differences in ownership. Both state-owned listed companies and private companies face the same degree of financial mismatch issues, which leads to changes in the property-specific governance structure of assets, and asset specificity is positively related to capital structure.

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.

scholarly journals Transactions Volume, Exchange Direction and Asymmetry of Volatility in Emerging Market: Evidence From Tunisian Stock Exchange

2020 ◽  
Vol 11 (6) ◽  
pp. 318
Author(s):  
Jaber Yasmina
Keyword(s):  
Stock Market ◽  
Financial Market ◽  
Stock Exchange ◽  
Emerging Market ◽  
Explanatory Power ◽  
Trading Activity ◽  
Auto Correlation ◽  
The Asymmetry ◽  
The Impact ◽  
The Relationship

This study is an attempt to explain the relationship between intraday return and volume in Tunisian Stock Market. Indeed, former researches avow that the trading activity have the main explanatory power for volatility. However, most theories measure the activity of transactions through the size of exchange or the number of transactions. Nevertheless, these components are not aware enough of the importance of the direction of exchange when explaining the phenomenon of asymmetry of volatility. In the most of studies, the technique “Augmented Tick Test” (ATT) is employed so as to identify the direction of exchange. Such technique is adapted for the markets directed by orders like the Tunisian financial market. Again, this paper shows that the impact of the direction of exchange differs according to the market trend. In other words, if the returns are positive, the transactions of sale (of purchase) generate a decrease (increase) of volatility; whereas, they induce an increase (drop) of volatility if returns are negative. This result stresses the significance of exchange direction in explaning the asymmetry of volatility. Moreover, throughout this study, one may affirm that “Herding trades” are at the origin of the increase of volatility, while the “Contrarian trades” reduce volatility. Similarly, the identification of the direction of exchange enables us to affirm that the transactions of the initiates are characterized by the absence of returns auto- correlation; whereas, the transactions carried out by uninformed investors present an auto- correlation of the returns. In fact, the sign of this correlation varies according to transaction direction.

scholarly journals Impact of Capital Structure on Profitability:An empirical analysis of listed firms in India

2018 ◽  
Vol 7 (2) ◽  
pp. 1-6
Author(s):  
Atif Ghayas ◽  
Javaid Akhter
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Short Term ◽  
Return On Equity ◽  
Listed Firms ◽  
Relationship Capital ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

This study aims to empirically examine and analyze the impact of capital structure decision on the firm’s profitability by using a sample of 35 Indian pharmaceutical companies listed on Bombay Stock Exchange (BSE) during the period of 5 years from 2012 to 2016. Regression Analysis is used to measure the extent and nature of the relationship. Capital structure variables used in the study are ratio of long-term debt to total assets (LDA), ratio of short-term debt to total assets (SDA) and ratio of Total debt to total assets (DA) while profitability has been measure by Return on Equity (ROE). Firms Size (SIZE)and Salesgrowth(GROW) are also used as control variables. Results reveal a positive effect of SDA and DA on ROE, while a weak-to-no effect was found of LDA on ROE.

scholarly journals The Effect of Firm Size and Profitability on Firm Value with Capital Structure as Intervening Variables in Indonesia

2019 ◽  
Vol 4 (2) ◽  
pp. 55
Author(s):  
Indra Arifin Djashan
Keyword(s):  
Capital Structure ◽  
Firm Size ◽  
Firm Value ◽  
Stock Exchange ◽  
Company Performance ◽  
Purposive Sampling ◽  
The Impact ◽  
The Relationship ◽  
Intervening Variables ◽  
The Capital Structure

This study examines the impact of firm size and profitability on firm value with capital structure as an intervening variable in financial companies listed on the Indonesia Stock Exchange during three years. The method used for sampling is purposive sampling based on predetermined criteria. The number of samples in this study were 73 companies. Measurement of profitability is using ROA and ROE as one indicator to see company performance. The main purpose of companies that have gone public is to increase the prosperity of the owners or shareholders through increasing the value of the company. The results showed that the improvement of profitability and firm size may improve its capital structure. The improvement of profitability and the firm size may increase significantly the firm value. The results of mediating test showed that the capital structure is not able to mediate the relationship between the profitability and firm size to firm value

scholarly journals Capital Structure and Bank Performance: Empirical Evidence from Bangladesh

2020 ◽  
Vol 12 (1) ◽  
pp. 161
Author(s):  
Md. Ibrahim Molla
Keyword(s):  
Capital Structure ◽  
Positive Impact ◽  
Stock Exchange ◽  
Positive Influence ◽  
Bank Performance ◽  
Total Debt ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

The paper empirically investigates the relationship between capital structure and the performance of listed banks in Bangladesh using panel data over the period of five years from 2014-2018. To estimate the association between leverage level and bank performance the Panel Corrected Standard Error (PCSE) model is used in this study and the findings indicate that long term debt has a positive influence on the performance of banks which is measured in terms of ROA and ROE. This implies that long term debts are associated with the higher performance of banks listed in Bangladesh. The regression results also reveal that the capital structure component of total debt has no statistically significant impact on ROA, ROE and EPS but it has a significant positive impact on the performance of banks measured by price earning ratio. Furthermore, this analysis finds no relationship of long term debt and total debt with the EPS. These findings lead to conclude that capital structure has a weak to no influence on the performance of listed banks in Bangladesh. This paper is the first research attempt that investigates the impact of capital structure on the performance of all banks listed on the Dhaka Stock Exchange in Bangladesh.

scholarly journals Relationship Between Capital Structure and Stock Returns of Jordanian Commercial Banks

2020 ◽  
Vol 13 (2) ◽  
pp. 100
Author(s):  
Sufian Radwan Al-Manaseer
Keyword(s):  
Capital Structure ◽  
Stock Returns ◽  
Firm Size ◽  
Commercial Banks ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
The Impact ◽  
The Relationship

This study aims to analyze the relationship between capital structure and stock returns of Jordanian banks listed on the Amman Stock Exchange from 2009 to 2018. The study sample is composed of 13 commercial banks in Jordan. The e-views program is used to conduct the statistical analysis of study variables. Initially, a simple linear regression analysis is conducted to determine the impact of capital structure as measured by financial leverage on stock returns and vice versa. Then, several control variables are added: growth in assets, liquidity, firm size, and profitability. This study has found that growth, capital structure, and profitability have a positive impact on stock returns. By contrast, liquidity and firm size have a negative impact on stock returns. Stock returns and firm size have a positive impact on capital structure, whereas liquidity, growth, and profitability have a negative impact on capital structure.

scholarly journals (The impact of oil price shocks on the performance of the Saudi financial market (2003- 2016: تأثير تقلبات أسعار النفط على أداء السوق المالية السعودية (2003-2016)

2019 ◽  
Vol 3 (8) ◽  
Author(s):  
Mohammed Faisal Hassan Mohammed Ahmed
Keyword(s):  
Financial Market ◽  
Stock Prices ◽  
Stock Exchange ◽  
Oil Price ◽  
Inductive Method ◽  
Price Fluctuations ◽  
Market Values ◽  
Market Index ◽  
The Impact ◽  
The Relationship

This study sought to analyze the impact of oil price fluctuations on the performance of the Saudi Stock Exchange by analyzing the impact of oil price fluctuations on the volume of trading, the market index and the prices of shares of listed companies in the market. The study used the inductive method to derive hypotheses, and the method of quantitative analysis to test the validity of these hypotheses. The study found that the fluctuations in oil prices do not explain the variation in the performance of the financial market (volume and market index) or the performance of companies listed in the Saudi Stock Exchange (stock prices). The study explained this result in the light of investor interest in other factors such as the financial performance of companies, the results of companies' business, dividends and others, and ignoring the impact of oil price fluctuations. The study recommended testing the relationship between the performance of the financial market and the factors influencing it such as dividends, market values ​​of stocks and other factors.

scholarly journals Utjecaj financijske strukture na profitabilnost hrvatskih poduzeća

2017 ◽  
Vol 5 (2) ◽  
Author(s):  
Dean Učkar ◽  
Josip Urti
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Correlation Coefficients ◽  
Financial Structure ◽  
Financial Statements ◽  
Debt Financing ◽  
Average Structure ◽  
Funding Sources ◽  
The Impact ◽  
Year 2013

This paper explores the impact which different formation of financial and capital structure has on the achievement of companies' financial results. The establishment of this relationship is very important because there are many theories of capital structure that in its settings have a proposition on existence or non-existence of such a link. With that goal in mind, it is selected a sample of 24 companies whose shares are listed on the Zagreb Stock Exchange and are part of the CROBEX index. Their financial statements are analyzed through three years, from year 2011 till the year 2013. Through the analysis of company's liabilities, this paper present the average structure of debt financing, and thereby establish some regularities in the sources of their funding. Through the calculation of debt and profitability indicators, it is established a relationship between financial structure and achieved profitability. Such a connection is established through correlation coefficients and it found that it is inversely proportional. Indirectly, this reject the validity of those capital structure theories that basically say there is no link between the combination of funding sources and the value of the company

An Empirical Study on Capital Structure and Corporate Performance of Chinese Listed Companies

2016 ◽  
Vol 5 (3) ◽  
Author(s):  
Fahd Al-Duais
Keyword(s):  
Capital Structure ◽  
Corporate Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Listed Companies ◽  
Short Term ◽  
Chinese Listed Companies ◽  
The Impact ◽  
The Relationship

The relationship between level of debt and the companys performance remains an important unsolved issue in the field of financing. It is very important to know how Chinas listed companies manage their capital towards business growth. This paper investigates the impact of the capital structure on corporate performance of a sample of 711 listed companies on the Shenzhen Stock Exchange in China in 2014. The results indicates that there is a positive relation between financial leverage and corporate performance as well as there is a positive impact that the mixture of long-term debt and short-term debt (using total debt). This would help decision maker in the companies to finance firms operation in the both periods. On the other hand, the short term debt has a negative relation and impact on corporate performance compared to the changing in firm size which cannot change in the profitability of firms.

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.

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