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Serfling, Matthew. "Firing Costs and Capital Structure Decisions." Diss., The University of Arizona, 2015. http://hdl.handle.net/10150/555889.
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I explore the passage of wrongful discharge laws by U.S. state courts that allow workers to sue employers for unjust dismissal as an exogenous increase in employee firing costs. I find that firms reduce debt ratios following the adoption of these laws, and this result is strongest for subsamples of firms that experience larger increases in expected firing costs. Following the passage of these laws, firms also increase cash holdings, firms save more cash out of cash flows, and investors place a higher value on each additional dollar of cash holdings. Overall, my results indicate that employee firing costs can have an important impact on corporate financial policy decisions.
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Schauten, Maximilien Bernard Joseph. "Valuation capital structure decisions and the cost of capital /." Rotterdam, 2008. http://hdl.handle.net/1765/13480.
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Stefanescu, Irina Shivdasani Anil. "Capital structure decisions and corporate pension plans." Chapel Hill, N.C. : University of North Carolina at Chapel Hill, 2006. http://dc.lib.unc.edu/u?/etd,383.
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Thesis (Ph. D.)--University of North Carolina at Chapel Hill, 2006.Title from electronic title page (viewed Oct. 10, 2007). "... in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Kenan Flagler Business School (Finance)." Discipline: Business Administration; Department/School: Business School, Kenan-Flagler.
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Yick, Ho-yin, and 易浩然. "Tax asymmetry, investment decisions and capital structure." Thesis, The University of Hong Kong (Pokfulam, Hong Kong), 2008. http://hub.hku.hk/bib/B4098798X.
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Yick, Ho-yin. "Tax asymmetry, investment decisions and capital structure." Click to view the E-thesis via HKUTO, 2008. http://sunzi.lib.hku.hk/hkuto/record/B4098798X.
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Silva, Carlos Afonso Bi França e. "The hidden value behind capital structure decisions." Master's thesis, NSBE - UNL, 2009. http://hdl.handle.net/10362/9476.
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A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and EconomicsI estimate the optimal capital structure for a growth company, for which market value is dictated by its highly volatile nature. I study the welfare impact of corporate taxes, analyzing their economic effect of inducing higher bankruptcy levels. Assuming that management always seeks to optimize the market value of company’s assets, I find a significant loss of value that varies negatively with volatility. Flow and stock insolvency are important for the maximization of capital structure, and I compare both, modeling the value of the company as an option on its revenues. These are not only highly significant for R&D and startup companies but also have significant welfare consequences. I compare the options of liquidation and re-financing and find a clearly important role of early liquidation for R&D frameworks. I complement the study with a comparative statics analysis estimating the impact of risk to the value of the firm and the optimal capital structure decision, for a cross-section of firms. The results present quantitative evidence that reinforce the literature of trade-off and capital structure applied to growth companies.
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Harijono, 1970. "Capital structure decisions of Australian family controlled firms." Monash University, Dept. of Accounting and Finance, 2005. http://arrow.monash.edu.au/hdl/1959.1/5133.
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Kaplan, Alan S. "Essays on financing decisions redemption features and the joint capital structure/debt maturity decision /." Thesis, National Library of Canada = Bibliothèque nationale du Canada, 1999. http://www.collectionscanada.ca/obj/s4/f2/dsk1/tape7/PQDD_0022/NQ39276.pdf.
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Hazak, Aaro. "Capital structure and dividend decisions under distributed profit taxation /." Tallinn : TUT Press, 2008. http://www.gbv.de/dms/zbw/568785215.pdf.
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Chekanskiy, Sergey A. "The effect of macroeconomic factors on capital structure decisions." View electronic thesis (PDF), 2009. http://dl.uncw.edu/etd/2009-3/r1/chekanskiys/sergeychekanskiy.pdf.
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Palkar, Darshana. "Reconciling capital structure theories in predicting the firm's decisions." Thesis, University of North Texas, 2006. https://digital.library.unt.edu/ark:/67531/metadc5403/.
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Past literature attempts to resolve the issue of the motivation behind managers' choice of a given capital structure. Despite several decades of intensive research, there is still no consensus about which theory dominates capital structure decisions. The present study empirically investigates the relative importance of two prominent theories of capital structure- the trade-off and the pecking order theories by exploring the conditions under which each theory can explain the financing choices of firms. These conditions are defined along two dimensions: (i) a firm's degree of information asymmetry, and (ii) its observed leverage relative to target leverage. The results show that, in the short-run, pecking order theory has more explanatory power in explaining the financing choices of firms. The target leverage theory assumes limited importance: Over-leveraged firms, when faced with low adverse information, are more inclined to adapt to the trade-off policies. In the presence of high information asymmetry, however, firms appear to be more concerned about adverse selection costs and make financing decisions that are more consistent with the pecking order theory. An analysis of the market reaction to seasoned equity issuances during announcement periods reveals that firms with high information asymmetry are penalized more than firms with low information asymmetry. This may explain the contradiction when over-leveraged firms continue to issue debt. However, the situation is reversed in the long run. Firms' long term financing goals appear to follow the leverage re-balancing theory. An analysis of financial activities over a five-year period, subsequent to security issuance decisions when they appear to be inconsistent with trade-off theory, reveals that firms follow an active policy of moving closer to the target leverage. In sum, the notion of target capital structure appears to exist. In the short-term, the management's financing decisions are consistent with the modified version of the pecking order theory, leading to tactical deviations from the optimal capital structure. However, long-term analysis indicates that the pecking order effect is largely transitory in nature and firms actively pursue strategic reversals towards an optimal capital structure.
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Mkhawane, Stephan. "Capital structure decisions : lessons from South African leveraged buyouts." Diss., University of Pretoria, 2010. http://hdl.handle.net/2263/24875.
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The private equity industry has become a progressively more critical source of capital and effective governance for companies. The majority of capital raised by private equity funds is used for leveraged buyouts, with total funds under management amounting to R109 billion in 2009 for the South African industry. These funds are typically enhanced with additional deal level debt financing for each buyout thus representing, ex-ante, an active capital structure decision. The objective of this study was to understand the determinants of decisions on the extent and type of leverage used in LBOs, and attempts to explain why the observed financing choices were made by the individual private equity firms. Buyouts totalling over R 26 billion and spanning the period 1998 to 2010 are analysed. The findings are consistent with the predictions of the agency costs, trade-off and market timing theories of capital structure decisions; while little support is found for the pecking order and signalling theories. The results indicate clear patterns that lead to the supposition of an underlying model in which LBO sponsors seek to balance potential leverage related benefits with leverage related costs. The study also finds suggestive evidence indicating that the LBO financing package is designed methodically to respond to differences across firms in their size and maturity, growth prospects, in the variability of their earnings, and to a lesser extent the tangibility of their assets. CopyrightDissertation (MBA)--University of Pretoria, 2011.
Gordon Institute of Business Science (GIBS)
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Akbarali, Ahmed, and Awambeng Foma. "Determinants of Capital Structure in Family Firms." Thesis, Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Företagsekonomi, 2015. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-28285.
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Most firms are using optimal combination of equity and debt so as to maximize firms value and the wealth of the shareholders. To achieve all these, firms should be aware of the factors that influence the capital structure decisions. Previous empirical studies attempted to explain what determines the choice of capital structure in firms. The focus was on firms in general without categorizing family firms and non-family firms. The primary objective of this study is to examine what determines the capital structure of family firms in OECD countries. Amadeus database was used to obtain the data needed for the statistical analysis. Measures for firm-specific characteristics were calculated based on the previous stud-ies. The study was conducted over a period of 9 years from 2005-2013. Dataset com-prised of 95 family firms resulting in 850 observations. The results from the study indicate that the capital structure for family firms in OECD countries is influenced by profitability, asset tangibility, growth, size, debt tax shield , non-debt tax shield and liquidity. Both pecking-order theory and trade-off theory explain the capital structure of family firms.
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Stallkamp, Philip Robert. "The impact of firm size and industry on capital structure decisions." Master's thesis, University of Cape Town, 2015. http://hdl.handle.net/11427/16796.
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Includes bibliographical referencesThis paper investigates the impact of firm size and industry on the capital structure of listed South African firms. It uses data obtained from firms listed on the Johannesburg Stock Exchange and tests trade-off theory and pecking order theory for firms of various sizes, firms in different industries and also tests for differences between debt maturities. Multiple fixed effect models are used to firstly test for the main factors that impact capital structure and secondly to test which sources of capital are preferred to finance a change in assets. The analysis shows that firms of different sizes and firms that operate in different industries choose their capital structure in various ways. Larger firms are more highly geared debt more than small firms and smaller firms prefer to use internally generated funds. The two main capital structure theories, trade-off and pecking order, do not explain the difference in behaviour adequately. The paper also finds that similar factors impact both long-term and short-term debt.
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Bose, Udichibarna. "Essays on international financial markets, firms' capital structure and exporting decisions." Thesis, University of Glasgow, 2016. http://theses.gla.ac.uk/7117/.
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International finance studies the dynamics in the areas such as international portfolio diversification, foreign investments, global financial systems, exchange rates, etc. This thesis brings together a set of chapters that summarises and synthesises varied areas of international finance maintaining a balance between the micro- and macro-level studies. This thesis is composed of three main empirical chapters contributing to varied aspects of international finance, mainly the areas of international portfolio diversification and home bias puzzle; development of bond markets and access to external finance; exchange rate uncertainties, output volatility and exports. Chapter 1 provides an outline and introduction of the thesis. Chapter 2 provides an extensive literature review on home-bias puzzle, explains the evolution and existence of home-bias puzzle, and gives various institutional and behavioural-based explanations which are considered as the main reasons for the existence of this puzzle. It discusses the advantages of international portfolio diversification and also the disadvantages of under-diversification in international portfolios. It gives a detailed empirical literature on the home bias puzzle and the relation between education and portfolio diversification. Further, this chapter empirically analyses a panel of 38 countries over a period of 2001-2010 to study the impact of different levels of education on home bias and international portfolio diversification. The results highlight that education is crucial in reducing equity home bias. After dividing the countries on the basis of their stock market capitalisation the results show that less developed countries with more university graduates have lower equity home bias. Finally, the results show that the benefits of education are larger during the recent financial crisis for the less financially developed economies. Chapter 3 provides a detailed analysis of the trends in Asian financial markets since the 1990s. It provides the main objectives of the Asian bond market policy initiatives. It also gives a detailed empirical literature of external finance, bond market development across the world and external finance-investment spending nexus. This chapter empirically analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' access to external finance by using a unique firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using difference-in-differences approach and controlling for firm-level and macroeconomic factors the results show a significant impact of policy on firms' access to external finance. After splitting firms into constrained and unconstrained, using several criteria, the results document that unconstrained firms benefited significantly in obtaining external finance as compared to their constrained counterparts. Finally, the results show that the increase in access to external finance, after the policy initiative, helped firms to raise their investment spending, especially for unconstrained firms. Chapter 4 focuses on how exporting decision of firms are affected by volatility at the macro and micro levels, using a rich dataset of UK manufacturing firms for the period of 1990-2009. The results show that both types of volatility have an adverse impact on firms’ real export sales. After taking into account firm-level heterogeneity, the results show that the negative impact of exchange rate and firm volatility on exports is higher for constrained firms as compared to unconstrained firms. Further, this chapter considers the European Exchange Rate Mechanism (ERM) crisis of early 1990s and the global financial crisis of 2008. The results indicate that during the ERM crisis constrained firms face a significant adverse impact of exchange rate volatility on exports, while the impact of firm-level volatility is mostly insignificant. On the contrary, during the global financial crisis, constrained firms face a significant negative impact of firm-level volatility on exports and an insignificant impact of exchange rate volatility on exports. Finally, Chapter 5 provides the conclusion of the thesis highlighting the contributions, implications and future research avenues of each empirical chapter.
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Wallace, Gerald Leon. "Decisions of capital structure in the presence of agency and collusive monopsony." Thesis, University of Edinburgh, 2012. http://hdl.handle.net/1842/6394.
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The United States acute care hospital (ACH) market provides a unique environment in which to examine questions about market structure and performance. The ACHs operate in a mature market of health services that is highly regulated and has one dominant primary consumer of services. The uncharacteristic industry structure offers the opportunity to analyze pervasive agency relationships and capital structure issues in a new setting. In addition, the policies of the U.S. Government have created an environment in which tacit collusion is likely to flourish, which leads to market buyer power (monopsony, or buyers acting as one monopoly buyer). A key question is the extent to which monopsony and agency affect capital structure decisions. Agency is defined by Ross (1973, p.134) as a relationship formed between a principle and their agents, “when one, designated as the agent, acts for, on behalf of, or as representative for the other, designated the principal, in a particular domain of decision problems.” This thesis extends the agency framework provided by Jensen and Meckling (1976), along with the econometric understanding of monopsony in healthcare via tacit collusion, as suggested by Pauly (1998) and Sevilla (2005), and the research constraints of monopsony under an all-or-nothing contract, as outlined by Taylor (2003). Using data on ACHs from the period of 1995 to 2007 for approximately 5,000 ACHs, which was derived from the Medicare Cost Report and medical payments for a sub-population of 1,500, this research examines the determinants of capital structure in a distorted market. Building upon this initial analysis, the research seeks to examine the effects of market distortions upon free cash flow, and ultimately, capital structure. Two theories of distortion are presented that would affect free cash flow: The first is that of the agency cost of free cash flow and signaling, and the second is a theory of monopsony via tacit collusion between buyers. A model of the agency relationship between ACHs and the U.S. Government is proposed, promoting agency cost (signaling and the agency cost of free cash flows) as a causal relation with free cash flows and capital structure (Jensen & Meckling 1976; Jensen 1986). Empirical models of agency are constructed, examining the dependence on government business and the relation to the leverage (signaling) and free cash flows (agency cost of free cash flows) for ACHs. In addition, a complementary theory of capital structure determinant via market power (monopsony) is formulated, suggesting that monopsony conditions within the ACH market affect free cash flows and capital structure. The analysis provides a framework for understanding the environments in which ACHs operate and the strength of bargaining within the market. The research concludes with a review of the determinants of capital structure in light of the inefficiencies and distortions of the industry and the relationships observed.
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Brunaldi, Eduardo Ottoboni. "Does the nature of large projects affect the financing decisions over the investment period ?" Universidade de São Paulo, 2018. http://www.teses.usp.br/teses/disponiveis/12/12139/tde-17012019-162941/.
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We develop a theoretical model based on Tirole (2006) where the nature of large investments, namely capital expenditure, research and development and working capital, affects the financing choice during the investment period. We use a sample comprised by American companies in the 1980-2017 period. We employ several econometric and graphic analyses to test our hypotheses. Our results are robust and consistent with Trade-off Theory predictions. Our model\'s propositions are empirically verified for all cases: (i) In CAPEX projects, firms use equity to finance the initial stages and debt to finance the last stages; (ii) throughout the R&D investment period, firms decrease debt and use equity to finance the project. Additionally, for large working capital projects, we show that firms use internal resources in the initial periods and, then, switch the source to debt, aiming the reduction of the deviation from the target leverage.Neste trabalho, desenvolvemos um modelo teórico baseado em Tirole (2006) em que a natureza de grandes projetos de investimentos, a saber: CAPEX, Pesquisa e Desenvolvimento e Capital de Giro, afeta as decisões de financiamento durante o período de investimentos. Nossa amostra é composta por empresas americanas e refere-se ao período de 1980 a 2017. Nós adotamos uma série de análises econométricas e gráficas para testar nossas hipóteses. Os resultados são robustos e consistentes com a teoria do Trade-off. As proposições do modelo são empiricamente verificadas: (i) nos projetos de CAPEX, as empresas usam capital próprio para financiar o projeto em seus estágios iniciais e dívida para os estágios finais; (ii) durante um investimento de P\\&D, empresas diminuem seu endividamento, financiando o projeto com recursos próprios externos. Adicionalmente, para grandes investimentos em capital de giro, nossos resultados sugerem que as firmas usam recursos internos durante os estágios iniciais do projeto e, em seguida, trocam a fonte de financiamento para dívida, objetivando a redução do desvio em direção ao endividamento alvo.
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Lusch, Stephen John. "The Impact of Financial Constraints on the Relation between Investor-Level Taxes and Capital Structure Decisions." Diss., The University of Arizona, 2014. http://hdl.handle.net/10150/316892.
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This study addresses the question of whether the relation between investor-level taxes and a firm's capital structure decisions varies predictably with financial constraints. Using the setting of the 2003 reduction in individual tax rates for ordinary income, dividends, and capital gains, this study documents that constrained firms decrease their debt use in response to the 2003 tax cuts, while unconstrained firms increase their debt use over the same period. I find these effects are only evident among firms with relatively high individual ownership, which is the group of firms that theory suggests will react to the tax cuts. This paper contributes to the literature on how investor-level taxes influence firms' financing decisions as well as the literature pertaining to the 2003 Tax Act.
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Correia, Alexandre Diogo Figueira da Silva. "ESG performance, tax avoidance and external financing decisions in Europe." Master's thesis, Instituto Superior de Economia e Gestão, 2020. http://hdl.handle.net/10400.5/20881.
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Mestrado em FinançasEste estudo pretende analisar se a evasão fiscal afeta o custo de capital das empresas na Europa, tomando em consideração o nível de ESG das empresas. Enquanto que as atividades de planeamento fiscal podem gerar um maior fluxo de caixa depois de impostos, como resultado de um menor pagamento de imposto para os governos, estas podem também levar a resultados futuros incertos e arriscados, o que pode impor vários riscos para as empresas. Particularmente, tomando em atenção a estrutura de capital das empresas, esses riscos podem afetar significativamente as decisões de financiamento por afetarem o custo de capital próprio e o custo de capital alheio. No entanto, temos também que ter em consideração um tema cada vez mais relevante relacionado com a responsabilidade e impacto social das empresas, que pode também ter um papel importante nas decisões de financiamento. Para analisar, recorremos aos ratings de ESG fornecidas pela Thomson Reuters. Testámos se os ratings de ESG podem moldar a relação entre o planeamento fiscal e o custo de capital. Os resultados sugerem que os investidores reagem positivamente a elevadas pontuações de ESG quando investem em empresas que praticam atividades de planeamento fiscal. Esse efeito é especialmente capturado pelas componentes Social e Governança. Este estudo contribui para a literatura existente sobre planeamento fiscal e custo de capital, adicionando um tem não tem sido suficientemente explorado e que pode influenciar a relação dessas duas variáveis e, particularmente, a reação dos investidores.
This paper aims to study whether tax avoidance affects company's cost of capital in Europe, taking into consideration company's level of ESG. While tax avoidance activities may generate a higher after-tax cash-flow as a result of lower cash tax payments to the governments, those outcomes can be uncertain, which could impose several risks. Specifically, looking at firm's capital structure, those risks could significantly affect the firm's financing decisions by affecting both the cost of equity and the cost of debt. However, we also need to take into consideration an increasingly topic related to firm's responsibility and social impact that may also play an important role in financing decisions. We take advantage of the ESG Scores from Thomson Reuters. We test whether ESG performance scores shape the relationship between tax avoidance and cost of capital. Results suggest that investors perceive higher levels of ESG performance positively when investing in firms that engage in tax avoidance activities. The effect is mostly captured by the Social and Governance components. The study contributes to the literature on tax avoidance and cost of capital, adding a topic that is not sufficiently explored and could influence the final relationship between those two variables and, particularly, the investors' reaction.
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Fuller, Beverly R. "Capital structure theory and flotation costs: an empirical analysis of utility debt and equity decisions." Diss., Virginia Polytechnic Institute and State University, 1987. http://hdl.handle.net/10919/74766.
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This research investigates which theory -- an optimal, irrelevance, or modified pecking order -- best explains a firm's capital structure. A sample of 457 debt and equity utility offerings made from 1973-1982 is used in logit regression analysis to test the predictions of the different theories and the relevance of flotation costs to the financing decision. Target leverage ratios are constructed as averages from industry and firm-specific data. These ratios change over time suggesting that leverage targets are moving in response to general economic conditions.
Miller's irrelevance and the modified pecking order theories (if utilities operate well below their debt capacity) are supported. In spite of using leading and lagging targets, no support is found for an optimal capital structure theory. Also, there is no support for flotation costs when measured as the savings from issuing debt rather than equity.
An anomalous finding that overlevered firms continue to lever with their next financing decision seems to be robust to the different measures of a target leverage ratio. This finding is inconsistent with the three capital structures theories tested.Ph. D.
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Al, Zoubi Tariq. "Corporate cash-holding decisions : Amman stock exchange." Thesis, Brunel University, 2013. http://bura.brunel.ac.uk/handle/2438/7360.
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Using a panel data analysis of a sample of 80 listed non-financial Jordanian firms during the period from 2000 to 2011, we investigated the corporate cash-holding decision. The firm’s decision to hold cash has come to the fore in last two or three years as a result of the recent global financial crisis, and the impact that this has had on the firms’ ability to raise funds from external sources. There is evidence in the US, for example, that firms have increased their holdings of cash as a result of increasing constraints from external sources. This current study therefore examines this issue from the point of view of a developing economy. We started by investigating the empirical determinants of corporate cash holdings; the results showed that firm size and growth opportunities have no significant effect on corporate cash-holding decisions, while firm’s cash flow, leverage, and liquid assets substitute have a significant negative effect on cash-holding decisions, and profitability and cash dividends have a positive effect on cash-holding decisions. Then we investigated empirically how cash-holding affects the value of corporate firms. Based on Fama and French’s (1998) valuation model and Faulkender and Wang’s (2006) model, the results showed that the marginal value of each Jordanian Dinar (JD) is valued at a discounted value of 0.41 JD; with higher leverage the marginal value of cash is declining, with a higher level of cash the marginal value of cash is increasing and, finally, cash dividends have no significant effect on shareholders’ value. We also investigated empirically how a group of explanatory variables affect a firm’s debt ratio by focusing on the liquidity variable. Results showed that the total debt ratio is positively affected by firm size and is negatively affected by growth opportunities, profitability, assets tangibility and total liquidity, cash, and non-cash liquidity. The long-term debt ratio is positively affected by firm size, non-debt tax shield, asset tangibility, total liquidity, cash, and non-cash liquidity, while the long-term debt ratio is negatively affected by growth opportunities and profitability. For the short-term debt models, the debt ratio is negatively affected by firm size, asset tangibility, and liquidity in its different forms. An investigation into the speed of adjustment showed that Jordanian firms quickly adjusted the total and long-term debt ratio, while they do not have an optimal or target short-term debt ratio.
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Chuairuang, Suranai. "Relational Networks and Family Firm Capital Structure in Thailand : Theory and Practice." Doctoral thesis, Umeå universitet, Företagsekonomi, 2013. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-79317.
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Firms must access capital to remain in business. Small firms have greater difficulty accessing financial resources than have large firms because of their limited access to capital markets. These difficulties are exacerbated by information asymmetries between a small firm’ s management and capital providers. It has been theorized that many information asymmetries can be reduced through networks that link those in need of capital with those who can supply it. This research is about these relationships and their impact on the firms’ capital structure. This research has been limited to a sub-set of small firms, family firms. I have collected data through a survey using a systematic sampling procedure. Both self-administered questionnaires and semi-structured interviews were utilized. The data analysis was based on the responses from two-hundred-and-fifty-six small manufacturing firms in Thailand. Seemingly unrelated regression (SUR), logistic regression, multiple discriminant analysis and Mann-Whitney U test were employed in the analysis. The hypothesis that firms apply a pecking order in their capital raising was confirmed although the generally accepted rationale based on poor access (and information asymmetries) was rejected. Instead, at least for family firms, the desire to maintain family control had a significant impact on the use of retained earnings and owner’s savings. My results also indicated that while the depth of relationships had a positive effect on direct funding from family and friends, networks did not facilitate capital access from external providers of funds. Instead direct communications between owner-managers and their capital providers (particularly bank officials) mattered. A comparative analysisof small manufacturing firms in general and small family manufacturing firms revealed that there were differences between them in regard to their financial preferences, suggesting that family firms should be considered separately in small firm research. Further, the results of this research raise some questions about the appropriateness of applying theories directly from one research context to another without due consideration for the impact of cultural influences. Through this research I have added evidence to the dialogue about small firms from a non-English speaking country by investigating the impact of networks on capital structure and the rationale behind family firm capital structure decisions.
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Persson, Alex, and Niklas Dahlström. "Capital Structure Decisions : A case study on high growth SMEs listed on NGM Equity in Sweden." Thesis, Umeå universitet, Handelshögskolan vid Umeå universitet, 2010. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-38391.
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Small and medium sized enterprises (SMEs) stand for 99.8 percent of businesses in Europe and are therefore a vital part of every country’s economic growth. The maintenance of an optimal capital structure is considered as an area where decision makers can influence the company as company value and risk depends, at least in part, on its capital structure. Of particular interest when studying capital structures among SMEs are high growth firms which are assumed to be more capital intense due to the need to finance their extraordinary growth. There seems to be a knowledge gap regarding research on the capital structure employed by firms listed in Sweden and there is therefore an opening for a study of this kind. Theories discussed in this paper are the pecking order theory and trade off theory which have been supplemented with information asymmetry theory and agency theory to build up a solid theoretical framework. These theories are also commonly used when capital structure issues are discussed. Pecking order theory describes how firms raise capital according to a ladder of preferences where internally generated funds are preferred to external funds and where debt is preferred to equity. Looking at the empirics on the pecking order there appear to be contradictions in the literature where some previous research findings suggest a reversion of the pecking order with regard to external funds, i.e. that external equity is preferred to external debt. Three factors that are extensively mentioned in the seminal work are financial flexibility, ownership control and the tax advantage of debt interest deductibility. These seem to have an influence on capital structure decisions. Therefore we also look at the relative importance of these factors. The research question of this study is thus: “What influences the capital structure and the pecking order among high growth, listed SMEs in Sweden?”. The practical implication of this study is to increase knowledge on what factors companies value with regard to capital structure decisions. A quantitative case study of the total population of high growth SMEs listed on the NGM Equity in Sweden was conducted. A deductive approach was used. A web based questionnaire was sent out to all 26 companies listed on NGM Equity during April 2010. The result is presented in an aggregated form using descriptive statistics and shows no evidence for a specific pecking order with regard to external funds. This suggests that the theory therefore needs revision. Equity and debt appear to be close to equally preferred and the overall finding suggests that there is a lack of financial strategy among SMEs listed on NGM Equity. Financial flexibility appears to have the most impact on influencing the financial structure followed by ownership control. The advantage of debt interest deductibility on tax appears to be of less importance. We believe that this study has contributed to knowledge about capital structure decisions and is good groundwork for future research. Future researchers are suggested to increase the studied population and separate companies according to industry and size and in order to get statistically significant results applicable on other similar groups in other countries.
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Stöter, Alwin [Verfasser], Thomas [Akademischer Betreuer] Hartmann-Wendels, and Dieter [Akademischer Betreuer] Hess. "Capital Structure Decisions and the Use of Factoring / Alwin Stöter. Gutachter: Thomas Hartmann-Wendels ; Dieter Hess." Köln : Universitäts- und Stadtbibliothek Köln, 2013. http://d-nb.info/1038486211/34.
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Giroud, Blaise. "The Impact of Credit Ratings-Related Regulation on Capital Structure Decisions What New Evidence Europeans Can Provide /." St. Gallen, 2007. http://www.biblio.unisg.ch/org/biblio/edoc.nsf/wwwDisplayIdentifier/97602825003/$FILE/97602825003.pdf.
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Tejuoso, B. "Factors that influence capital structure decisions between owners of family businesses and their administrators in medium sized organizations." Thesis, University of Liverpool, 2016. http://livrepository.liverpool.ac.uk/3001179/.
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Family businesses are known to have problems with capital structure decision making, and this is evident within the Nigerian family business context. While other areas in the family business field have been well studied, the factors that influence capital structure decisions have been grossly understudied; particularly from the perspective of family business owners and the administrators that manage their businesses. This dissertation addresses this understudied section in the family business literature while simultaneously addressing a real-world problem through Action Research. This research analyses the family business literature to understand the current theoretical and empirical stance of this issue. Following the creation of action learning sets within my organization, a decision was made to diffuse new knowledge into the firm. Twelve interviews with owners and administrators of family businesses were conducted to explore the research problem and gather primary data on the subject. Research participants were interviewed based on their hierarchical roles within family businesses that met with set research criteria. Following qualitative analysis of the data and continued activities within the learning sets, this research wok produced factors that influence capital structure decisions within medium family businesses in Nigeria. Factors such as fear, control, trust, generational succession, expertise and experience, mind-set, agreement issues, capital structure decision priorities and conflicts were discovered. In addition, new knowledge was diffused into the organization which acted as a game-changer in terms of external financing. These activities, allowed for the problems concerning capital structure decision making in my organization to be addressed. This research work demonstrates how action research can be used to solve real- world problems and may provide guidance for future action researchers working in similar contexts – e.g., family business in developing countries.
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Xu, Bin. "Corporate financing decisions : the role of managerial overconfidence." Thesis, Loughborough University, 2014. https://dspace.lboro.ac.uk/2134/16652.
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This thesis examines the effects of managerial overconfidence on corporate financing decisions. Overconfident managers tend to overestimate the mean of future cash flow and underestimate the volatility of future cash flow. We propose a novel time-varying measure of overconfidence, which is based on computational linguistic analysis of what the managers said (i.e. Chairman s Statement). The overconfidence of CEO and CFO is also constructed based on what the managers did (i.e. how they trade their own firms shares). We conduct three empirical studies that offer new insights into the roles of managerial overconfidence in the leverage decision (i.e. debt level), pecking order behaviour (i.e. the preference for debt over equity financing) and debt maturity decision (i.e. short-term debt vs. long-term debt). Study 1 documents a negative overconfidence-leverage relationship. This new finding suggests that debt conservatism associated with managerial overconfidence might be a potential explanation for the low leverage puzzle: some firms maintain low leverage, without taking tax benefits of debt, because overconfident managers believe that firm securities are undervalued by investors and thus are too costly (Malmendier, Tate and Yan, 2011). Study 2 finds managerial overconfidence leads to reverse pecking order preference especially in small firms, which sheds light on the pecking order puzzle that smaller firms with higher information costs surprisingly exhibit weaker pecking order preference. This new evidence is consistent with Hackbarth s (2008) theory that overconfident managers who underestimate the riskiness of earnings tend to prefer equity to debt financing. Study 3 finds managerial overconfidence leads to higher debt maturity. This evidence supports our proposition that overconfidence can mitigate the underinvestment problem (which is often the major concern of long-term debt investors) (Hackbarth, 2009), which in turn allows overconfident managers to use more and cheaper long-term debt. This evidence also implies that overconfidence may mitigate the agency cost of debt. Overall, our empirical analysis suggests that managerial overconfidence has significant incremental explanatory power for corporate financing decisions.
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Gerke-Teufel, Laura [Verfasser], and Rainer [Akademischer Betreuer] Elschen. "Capital structure and firm growth investment decisions and financial management in listed companies / Laura Gerke-Teufel ; Betreuer: Rainer Elschen." Duisburg, 2019. http://d-nb.info/119483504X/34.
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Zhang, Zhengyi. "Two Essays in Corporate Finance: The Effects of Ownership and Governance on a Firm's Innovation and Capital Structure Decisions." ScholarWorks@UNO, 2016. http://scholarworks.uno.edu/td/2208.
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In the first chapter, we assess the effect of changes of government ownership on corporate innovation activities. Across 58 non-US countries, treatment firms’ innovation, both in quantity and quality, decrease after a governmental acquisition by using a difference-in-difference regressions and propensity score matching. We show that there is conflict of interest between major shareholders and minor shareholders. The corporate innovation efficiency also decline after the government acquisition. We find that this negative relationship is more severe for the group with higher government ownership of banks, better creditor rights and worse stock market development.
For second chapter, if the optimal capital structure exists, an overleveraged firm is expected to move towards the target structure by taking actions that would lower the leverage. Many previous studies, however, show that leverage-decreasing transactions, including offering stocks in exchange of bonds, are meted out with negative market reactions, suggesting deficiencies of the trade-off theory in explaining this phenomenon. In this paper we hypothesize and show that the negative market reactions might be attributed to incorrect rebalancing by poorly-governed firms in the under-leverage domain, who instead of increasing leverage are purposely engaged in leverage-reducing activities.
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Jeon, Eui Ju. "Antecedents and Consequences of Exploration and Exploitation Decisions : Evidence from Corporate Venture Capital Investing." Thesis, Université Paris-Saclay (ComUE), 2017. http://www.theses.fr/2017SACLH001/document.
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Cette thèse étudie la façon dont l’atteinte ou non des objectifs et la gouvernance influencent la direction du changement organisationnel – en termes d’exploration et d’exploitation - et analyse l’impact de ces effets sur la performance de l’entreprise au fil du temps. Dans un premier temps, je procède à une analyse détaillée de la littérature sur le Corporate Venture Capital afin de positionner mon propre travail de recherche dans le champs considéré et confirmer l’originalité de mes contributions. Ensuite, dans la première étude, j’examine comment la non-atteinte des objectifs fixés influe sur la direction du changement organisationnel mis en oeuvre dans l'entreprise, et étudie la façon dont ces changements sont influencés par la place qu’occupent les actionnaires stables ou passagers dans le capital de l’entreprise. Dans la seconde étude, je vérifie empiriquement la validité des propositions formulées en examinant les investissements de corporate venture capital (CVC) réalisés par un échantillon d’entreprises ayant une forte activité CVC. Enfin, l'équilibre entre exploration et exploitation au fil du temps, ainsi que les caractéristiques des oscillations entre ces deux types d’activités sont examinés dans la troisième étude constituant cette thèse. Les analyses empiriques portent sur les investissements de CVC effectués par 286 entreprises des États-Unis sur la période 1993-2013. Cette thèse contribue à la théorie comportementale de l’entreprise (Behavioral Theory of the Firm) en examinant la façon dont la structure du capital et l’actionnariat influe sur la prise de décisions en matière d’innovation et de changement. En étudiant la façon dont l'inertie organisationnelle et les phases de changement affectent les activités d'exploitation et d'exploration, cette thèse contribue aussi à la recherche sur l’ambidextrie organisationnelle. Pour finir, ce travail participe à la recherche sur le corporate venture capital au travers de l’étude des antécédents et des conséquences des activités d'exploration et d’exploitation dans le cadre de l’investissement CVCThis dissertation addresses unexplored issues on the antecedents, management, and outcomes of corporate venture capital (CVC). More specifically, I examine how negative performance feedback and corporate governance influence the direction of organizational change ˗ in terms of exploration and exploitation ˗ and how balancing such change over time influences firm performance in the CVC context. I first review the extant literature on CVC and lay out the unique contributions of my research. Then, in the first essay, I theorize on how poor firm performance influences the resource allocation decisions on exploration and exploitation and how such decisions are affected by the concentration of dedicated and transient shareholders and by the board of directors' monitoring and advising intensities. In the second essay, I empirically examine how the resource allocation decisions on exploration and exploitation are influenced by dedicated and transient shareholders in the context of CVC investing. In the third essay, I examine how balancing exploration and exploitation over time and the characteristics of oscillation impact firm performance. The empirical analysis in the latter two essays is based on CVC investments made by 286 U.S. companies during 1993-2013. This dissertation contributes to the Behavioral Theory of the Firm and Corporate Governance research by introducing how shareholders and boards influence managerial decision-making in search and change, Ambidexterity research by studying how continuous change and organizational inertia impact temporal spillover between exploration and exploitation, and CVC research by examining the antecedents and consequences of explorative and exploitative initiatives in CVC investing
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altamimi, sohale. "Impact of Relative Liquidity of Stocks and Bonds on the Financing and Investment Decisions of a Firm." ScholarWorks@UNO, 2019. https://scholarworks.uno.edu/td/2581.
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The dissertation consists of two essays. The first essay investigates if market illiquidity is a significant determinant of capital structure decisions. We hypothesize that firms would likely compare the illiquidity of two sources of external funding at a given point in time and issue the one with lower illiquidity. Therefore, if the level of illiquidity is a key driver of firms’ capital structure decisions in that year, the higher the level of stocks illiquidity, the more of its financing needs are satisfied by the issuance of debt, and the higher the level of bonds illiquidity, the less of its financing needs are satisfied by the issuance of debt. We find that illiquidity of the two sources of external funding affects significantly the capital structure decisions of U.S. firms over the sample period 2003-2018. Specifically, the coefficient of relative bonds illiquidity is negative, large, and strongly significant regardless of leverage measurement, and the coefficient of relative stocks illiquidity is positive, large, and strongly significant regardless of leverage measurement.
The second essay investigates if markets illiquidity is a significant determinant of investment decisions. We argue that an increase in investment opportunities due to an increase in bonds liquidity is for the decrease of the firm’s cost of capital and the decrease in its issuance cost. With a lower cost of capital and a higher ability to issue securities, firms are able to undertake more investment opportunities. We find that bonds and stocks illiquidity affect significantly the investment decisions of U.S. firms over the sample period 2003-2018. Specifically, the coefficients of bonds and stocks illiquidity are negative, large, and strongly significant regardless of investment measurement. Also, we find the effect of bonds illiquidity is more pronounced for financially constrained firms using different financial constraints measures.
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Ayotte, Mathieu. "Income taxation, financial innovation, investment and corporate capital structure decisions in efficient, incomplete and imperfect capital markets : a study of US publicly-traded debt-equity hybrid securities." Thesis, University of Cambridge, 2000. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.621563.
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Ampofo, Akwasi Amankwaah. "Two Essays on Capital Structure Decisions of the Firm: An Empirical Analysis of the Impact of Managerial Entrenchment and Ethical Corporate Citizenship." Diss., Virginia Tech, 2021. http://hdl.handle.net/10919/103152.
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This dissertation consists of two essays on the impact of managerial entrenchment and ethical corporate citizenship on capital structure decisions of the firm. The first essay examines the impact of managerial entrenchment on financial flexibility and capital structure decisions of firms. Agency conflicts and asymmetric information between managers and shareholders of firms exacerbate managerial entrenchment, which is operationalized using the entrenchment index. The excess cash ratio of a firm over the median cash ratio of firms within the same 3 digits SIC code is the proxy for financial flexibility. Capital structure decisions include the extent and maturity of debt as proxied by debt-to-equity ratio, and average debt maturity respectively. Results indicate that compared to managers who are not entrenched, entrenched managers obtain less rather than more debt, and they use long-term rather than short-term debt maturity. Also, entrenched managers keep more excess cash than managers who are not entrenched. This is especially the case for firms in small and large market value groups compared to medium sized firms. Results do not change before, during, and after the 2008 global economic crisis.
The second essay examines the impact of ethical corporate citizenship and CEO power on cost of capital, and firm value in the context of stakeholder theory. Firms listed as World's Most Ethical Companies (WMECs) exemplify ethical corporate citizenship, which is operationalized as a binary variable of 1 for WMECs, and zero for non-WMECs. This paper matches WMECs and non-WMECs control firms in the same 3 digits SIC code, and within 10 percent of total assets. CEO power is primarily measured using CEO pay slice calculated as CEO total compensation as a percentage of top 5 executives of the firm. Powerful CEOs have pay slice above the 50th percentile, and weak CEOs pay slice is below the 50th percentile. Tobin's q is the proxy for firm value, and cost of capital is measured as the market value weighted cost of debt, and cost of equity. Results indicate that WMECs have neither lower cost of capital nor higher Tobin's q than matched control sample of non-WMECs. Firms led by powerful CEOs have significantly lower cost of debt capital, and lower industry-adjusted Tobin's q than firms led by weak CEOs. The negative impact of CEO power on firm value is consistent with agency theory that self-interested CEOs extract firm value for personal advantage, subject to managerial controls. Results have implications for research and practice in capital structure, corporate governance, CEO compensation, and corporate social responsibility.Doctor of Philosophy
This study consists of two essays. Essay 1 examines the impact of managerial entrenchment on financial flexibility, and leverage decisions of the firm. Managerial entrenchment is measured using the entrenchment index. The excess cash ratio of a firm over the median cash ratio of firms measures financial flexibility. Capital structure decisions include the extent and maturity of debt as measured by debt-to-equity ratio, and average debt maturity respectively. I find that entrenched managers use less debt than managers who are not entrenched. Also, entrenched managers prefer using long-term rather than short-term debt, and they keep more excess cash than managers who are not entrenched. This is especially the case for small and large firms compared to medium sized firms. Essay 2 investigates the impact of ethical corporate citizenship and CEO power on cost of capital, and firm value. Ethical corporate citizenship (ECC) refers to firms' commitment to a culture of ethics, effective governance, leadership, and innovation. ECC is measured as a binary variable of one if a firm is listed on World's Most Ethical Companies (WMEC), and zero otherwise. CEO power is primarily measured using CEO pay slice that is calculated as CEO total compensation as a percentage of top 5 executives of the firm. Powerful CEOs have pay slice above the 50th percentile, and weak CEOs pay slice is below the 50th percentile. WMECs and non-WMECs in the same 3 digits standard industry classification, which have similar total assets as the WMECs are compared. I find that WMECs have neither lower cost of capital nor higher Tobin's q than non-WMECs. Powerful CEOs often utilize their influence to reduce cost of debt capital, but also reduce firm value compared to weak CEOs. Self-interested CEOs who extract firm value for personal advantage partly explains the negative effect of CEO power on firm value.
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Tewelde, Natnael Y. "A study to identify and evaluate the impact of dividend policy, capital structure and investment decisions on firm value : evidence from the JSE." Master's thesis, University of Cape Town, 2005. http://hdl.handle.net/11427/11745.
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Includes bibliographical references (leaves 76-82).Ever since Modigliani and Miller (1958) made their irrelevance proposition, financial economists have long debated the effect of corporate finance decisions: dividend, capital structure, and investment, on the value of a firm, resulting in intensive theoretical modeling and empirical examinations. The existing evidence regarding this effect is mixed. In this study the debate is extended and its impact on JSE is tested.
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Spennare, Karin. "The Zero-leverage Puzzle : Evidence from Sweden." Thesis, Uppsala universitet, Företagsekonomiska institutionen, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-450351.
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This study investigates why some firms have no debt in their capital structure despite the potential benefits of leverage. A logistic regression analysis is used to examine the impact of firm-specific characteristics on a firm’s propensity to have zero leverage. The validity of five theoretical explanations for the zero-leverage phenomenon are examined based on how the theories predict characteristics to affect a firm’s propensity to be unlevered. Analysing a new sample of Swedish firms listed on Nasdaq Stockholm in 2005-2018, I show that on average 14.2% of all firms are unlevered. The regression results suggest that the phenomenon of zero-leverage firms can be explained by a combination of several theories. Some firms seem forced to follow zero-leverage policies due to credit rationing by lenders. Others appear to be deliberately debt-free either because they have low needs of external financing or because they strategically want to avoid debt. The study’s main findings for zero-leverage firms are also robust to firms with very low debt (book leverage less than 5%).
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Hallberg, Amanda. "Kan bolagsskattesatsen förklaras av underliggande faktorer? : Varför sänkte riksdagen bolagskattesatsen?" Thesis, Karlstads universitet, Handelshögskolan, 2015. http://urn.kb.se/resolve?urn=urn:nbn:se:kau:diva-35330.
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Bolagsskattesänkningen genomfördes den 1 januari 2013, målet med sänkningen var att stimulera Sveriges tillväxt då en sänk bolagsskatt sägs öka investeringsviljan. Med sänkningen ville man också minska incitamenten för företag att flytta sina verksamheter till lågskatteländer. Att bolagsskattesatsen sänktes väckte ett intresse som skapade denna uppsats att undersöka vilka faktorer det är som styr bolagsskattesatsen, till exempel, i en liten öppen ekonomi som den svenska. Teorin grundar sig i kapitalstruktur och finansieringsbeslut. Faktorer som anses påverka bolagsskatten och som valts ut är utländska direktinvesteringar, öppenhet mot kapitalflöde och BNP per Capita. Datainsamling har skett sekundärt och bearbetats i det analytiska programmet R. Med hjälp av R och statistiska metoder har det genomförts paneldataanalys och regressionsanalys. Svaret är kort och gott, ja, faktorerna påverkar bolagsskattesatsen. Det visar att ett land som är större geografiskt och har en hög öppenhet för kapitalrörelser tenderar att ha en lägre bolagsskattesats och att det tycktes vara ett bra val av Sverige att justera bolagsskatten.The goal with lowering of the Swedish corporate tax rate the 1st of January 2013 was to stimulate the Swedish growth, as a lower corporate tax rate is said to increase the will to invest. The incentives for corporations to move to low tax countries was also thought to be decreased due to the reduction. When the tax rate was reduced an interest arise to examine which factors influence the tax rate, as for example, for a small economy as the Swedish. Theory presented is based on capital structure and finance decisions. The variables chosen is FDI, Openness towards capital flow and BNP per capita. Collection of data is secondary and has been analysed in the statistic program R with focus on panel data and regression analysis. The answer is for short, yes, the variables do indeed influence the corporate tax rate. Countries whom are larger geographically and has a high openness towards capital movement are more likely to have a lower corporate tax rate and it seemed to be a good choice of the Swedish parliament to lower the corporate tax rate.
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Trabelsi-El, Gharbi Myriam. "Le choix de la source de dettes par les grandes firmes : le cas français." Thesis, Orléans, 2009. http://www.theses.fr/2009ORLE0501/document.
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En dépit des réformes visant à faciliter l’accès aux marchés, les grandes firmes françaises s’endettent en majeure partie auprès des banques. Cette thèse tente donc de comprendre les décisions d’endettement des entreprises, et plus particulièrement leur choix entre dettes directes et/ou indirectes. Ce choix a un impact sur la valeur boursière à court terme des grandes sociétés françaises. En effet, les résultats de l’étude d’événements indiquent que le marché réagit positivement aux annonces d’emprunts bancaires, mais ne réagit pas aux annonces d’emprunts obligataires. L’effet de signal positif est d’autant plus important lorsque les annonces concernent le renouvellement de dettes bancaires, des échéances relativement courtes et des emprunts bancaires syndiqués. La structure d’endettement des grandes firmes dépend en fait de certaines de leurs caractéristiques. Ce sont essentiellement les plus grandes sociétés françaises, celles qui bénéficient d’une certaine notoriété, qui ont le plus de chance d’émettre des emprunts directs. Toutefois, un certain nombre d’entre-elles tirent avantage de leur envergure pour accéder à la dette de marché, alors qu’elles présentent un risque de crédit relativement élevé. Ces firmes continuent donc à se financer en majeure partie auprès des banques afin de bénéficier d’une plus grande flexibilité. Par ailleurs, les entreprises innovantes optent pour une structure d’endettement mixte, qui leur permet de choisir leur source de dette en fonction de la confidentialité des projets à financer. Les variables de gouvernance jouent également un rôle dans les choix d’endettement des firmes. Au final, les deux types de dettes sont plus complémentaires que substitutsIn spite of public market deregulation in the 1980s, large French companies continue borrowing predominantly from commercial banks. To understand corporate debt decisions, this thesis examines the choice between arm’s-length debt obtained in public market and/or monitored debt supplied by banks. This choice has an impact on firms’ common stock prices. Bank loan announcements convey information to the capital market and generate positive share price effects, while bond debt announcements do not. Market reaction is even more important when announcements are related to bank credit renewals, to shorter maturities and to syndicated loans. In fact, corporate debt ownership structure depends on several firm characteristics. Results indicate that largest and oldest firms are most likely to issue public debts. However, some of them draw advantage from their scale to reach bond markets, whereas they have a relatively high credit risk. These firms continue borrowing from banks to benefit by a greater flexibility. Moreover, firms with sensitive information have a mixed structure of debt, since they choose their debt source according to the confidentiality of the projects to be financed. Corporate governance variables also play a part in the corporate debt choices. Finally, the two types of debts are more complementary than substitute
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Bernardo, Cláudio Júnior. "Fatores institucionais, composição do endividamento e estrutura de capital de empresas latino-americanas." Pontifícia Universidade Católica de São Paulo, 2016. https://tede2.pucsp.br/handle/handle/1624.
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This study aimed to examine the influence of institutional factors in determining the capital structure of Latin American firms and to analyze if the significance of institutional factors to explain the firms' capital structure is changed considering the short and long term debt. The sample was composed by public companies from six Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico and Peru, analyzed during 2009-2014. Linear hierarchical models (or multilevel regression) for processing the data were used. Six leverage indicators were used as dependent variables. As explanatory variables, firm variables (business characteristics) and country variables (macroeconomic and institutional factors) were considered. These variables have been identified in the literature as important determinants of firms' capital structure. The main results show that both variables (firm and country characteristics) are important determinants of firms' capital structure. However, firm variables explain a much larger percentage of variance. These results can be derived from the similarity of economic contexts of the six countries analysed. Probably, in future work, if countries with very different macroeconomic and institutional features are inserted in the analysis, the results can change significantly. Thus, it is emphasized that much remains to be done to analyze the effects of institutional factors on the capital structure of companies. It is expected that this study has generated new contributions to national literature on capital structure, by using a theoretical approach, as well as econometric, still little explored in the literature and offer suggestions for future work on the subject, thereby contributing to the academy. It is also expected that the research will contribute to the agents of the capital market by analyze the determinants of the capital structure considering the institutional aspects as well as the relevance of these variables in the financing decision process
Esta pesquisa teve por objetivo examinar a influência de fatores institucionais na determinação da estrutura de capital de empresas latino-americanas, bem como analisar se a significância de fatores institucionais para explicar a estrutura de capital das empresas é alterada considerando a decomposição do financiamento em curto e longo prazos. A amostra investigada foi composta por companhias abertas pertencentes a seis países latino americanos: Argentina, Brasil, Chile, Colômbia, México e Peru, analisadas durante o período 2009-2014. Foram utilizados modelos hierárquicos lineares (ou regressão multinível) para tratamento dos dados. Como variáveis dependentes, foram considerados seis indicadores de alavancagem e como variáveis explicativas, foram consideradas variáveis de firma (características das empresas) e país (fatores macroeconômicos e institucionais) identificadas na literatura como importantes determinantes da estrutura de capital. Os principais resultados evidenciam que, tanto as variáveis representativas de características de firma, quanto as variáveis representativas de países, são importantes determinantes da estrutura de capital das empresas. No entanto, as variáveis de firma explicam um percentual de variância muito maior. Estes resultados podem ser derivados da similaridade dos contextos econômicos dos seis países analisados. Provavelmente, em trabalhos futuros, caso sejam inseridos na análise países com características macroeconômicas e institucionais muito distintas, o resultado possa se alterar significativamente. Assim, ressalta-se que ainda há muito a ser feito para análise dos efeitos de fatores institucionais sobre a estrutura de capital das empresas. Espera-se que este estudo tenha gerado novas contribuições para a literatura nacional sobre estrutura de capital, por utilizar uma abordagem teórica, e também econométrica, ainda pouco exploradas na literatura da área, fornecendo subsídios para futuros trabalhos sobre o tema, contribuindo, dessa forma, para a academia. Também se espera que a pesquisa contribua para os agentes do mercado de capitais ao analisar os determinantes da estrutura de capital considerando os aspectos institucionais, bem como a relevância dessas variáveis quando da decisão de financiamento por parte das empresas
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Dzolkarnaini, Mohd Nazam. "Determinants of the use of debt and leasing in UK corporate financing decisions." Thesis, University of Stirling, 2009. http://hdl.handle.net/1893/1736.
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This thesis investigates the determinants of the use of debt and leasing in the UK using a comprehensive measure of debt and leases, in recognition of the link between lease and debt-type financing decisions, based on financial contracting theory and the tax advantage hypothesis. The design of the study takes account three lacunae in our current understanding of this topic. Firstly, despite the fact that the capital structure literature is voluminous, it is perhaps surprising that relatively little research has been carried out on lease finance, given its significant role as a major source of finance for many firms. Secondly, the role of tax in the capital structure decision is unclear. Empirically testing for tax effects is challenging because spurious relationships may exist between the financing decision and many commonly used tax proxies. More importantly, our understanding of the impact of taxes on UK financing decisions is far from complete, especially since several major corporate tax reforms have taken place in the last decade. Thirdly, empirical evidence on capital structure determinants is also voluminous but far from conclusive. Notably, contradictory signs and significance levels are commonly observed. Using the standard regression approach invariably involves identification of the average behaviour of firms, and therefore does not measure diversity across firms. In response to these three major issues, this study employs empirical research methods, namely cross-sectional pooled regression, static and dynamic panel data regression, and quantile regression to analyse a large sample of 361 non-financial firms, drawn from the FTSE 350 and FTSE All-Small indices over the tax years 1995 through 2003. The operating lease data are estimated using the constructive capitalisation method while the simulated before-financing marginal tax rate is used to proxy for the firms’ tax status. The endogeneity of corporate tax status is evident since the use of simple tax proxy, the effective tax rate, leads to a spurious negative relation between debt usage and tax rates. The problem was avoided with a better measure of tax variable that is the simulated before-financing marginal tax rate where it is found that the empirical relationships between the tax factor and debt and leasing are consistent with those theoretical predictions. Furthermore, there is a clear distinction between the effect of taxes on debt and leasing where the firm’s marginal tax status is only relevant when managers make decisions on debt financing. The use of quantile regression method in the present study represents a novel approach in investigating the determinants of the use of debt and leasing. The results reveal that the determinants of debt and leasing are heterogeneous across the whole distribution of firms, consistent with the notion of heterogeneity as promoted by Beattie et al. (2006), but contradicting their claim that the large-scale regression approach cannot measure firms’ diversity. This finding implies that average model results (e.g., from OLS or panel data models) may not apply to the tails of debt and leasing levels, and hence assuming that the determinants of debt and leasing decisions are the same for all firms in the economy is clearly unrealistic. Using the dynamic panel data model, this thesis confirms that debt and leasing are substitutes rather than complements, and that the degree of substitutability is more pronounced among smaller firms, where the degree of information asymmetry is greater. More importantly, the use of a joint specification for debt and leasing improves our understanding of the determinants of the two fixed-claim financing instruments. There is also significant evidence to support the view that firm characteristics affect contracting costs which in turn impact on the choice between alternative forms of finance, namely equity, debt and leasing.
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Amaral, Paulo Ferreira. "Decisões de financiamento em empresas brasileiras: uma comparação entre a static tradeoff e a pecking order theory no Brasil." Universidade de São Paulo, 2011. http://www.teses.usp.br/teses/disponiveis/96/96133/tde-26092011-152130/.
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A comparação entre duas teorias na área de finanças sobre estrutura de capital nas empresas é o objetivo deste trabalho. Usando testes desenvolvidos por Shyam-Sunder & Myers (1999) e Rajan & Zingales (1995), os dados de empresas brasileiras, não financeiras, de capital aberto foram analisados entre os anos de 2000 e 2010 para verificar se preferiram os comportamentos previstos na Static Trade-off Theory ou os da Pecking Order Theory. As maneiras de se financiar e as causas e conseqüências dessas decisões nas empresas são importantes questões que vêm sendo debatidas em inúmeros trabalhos acadêmicos. Este trabalho procurou analisar a bibliografia relacionada ao tema e replicar testes realizados no exterior, visando verificar as semelhanças, diferenças e os motivos relacionados a tais resultados. Os resultados obtidos apontam para a provável preferência do comportamento previsto pela Pecking Order Theory, isto é, as empresas estudadas, no período analisado, usaram, em primeiro lugar, recursos gerados internamente (caixa operacional), usando em segundo lugar recursos de terceiros, por meio de empréstimos bancários ou emissão de debêntures, somente emitindo ações como última alternativa. Outra conclusão foi que as empresas brasileiras de capital aberto provavelmente não procuram alcançar ou manter uma meta ideal de endividamento, que equilibre os custos e benefícios gerados pelos empréstimos.The comparison between two theories in the finance area of capital structure in business is the goal of this work. Using tests developed by Shyam-Sunder & Myers (1999) and Rajan & Zingales (1995), the data of Brazilian non-financial publicly traded were analyzed between the years 2000 and 2010 to determine whether they preferred the expected behaviors in the Static Trade-off Theory or the Pecking Order Theory. The ways to finance and the causes and consequences of these decisions in organizations are important issues that have been discussed in numerous scholarly works. This study sought to examine the literature related to the theme and replicating tests performed abroad in order to verify the similarities, differences and the reasons related to such results. The results indicate the problabe preference behavior provided by Pecking Order Theory, ie the companies studied in the period analyzed, used, first, internally generated funds (operating cash), second using third-party funds through bank loans or issuance of bonds or issuance of bonds, sending shares only as a last resort. Another conclusion is that Brazilian companies traded problaby did not seek to achieve or maintain an ideal goal of indebtedness, wich balances the costs and benefits generated by the loans.
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Costa, Magali Pedro. "Three essays on firms' financial distress." Doctoral thesis, Universidade de Évora, 2015. http://hdl.handle.net/10174/17512.
Full textAbstract:
Financial and output market decisions are crucial to the success or failure of an or-
ganization. These decisions are influenced by the dynamic and competitive economic
environment in which firms operate and, in turn, affect the ability of firms to meet their
debt obligations.
This thesis is constituted by three separate but interrelated essays which explore the
impact of financial and operating decisions on the default risk. The first two essays study
the equilibrium default probability, in a two-stage differentiated product duopoly model
with uncertainty, where firms decide their financial structure in the first stage and their
quantities in the second stage. These two essays analyze the impact of changes in the
parameters of the model, on the equilibrium default probability (the first essay uses com-
parative statics tools while the second uses numerical simulation). The impact of changes
in the uncertainty level, in the degree of product substitutability, in the marginal costs
and in the default cost on the financing and output decisions and on the default risk are
analyzed. The third essay tests empirical the relationship between market structure and
capital structure decisions and their relationship with the default probability using a sam-
ple of eleven members of the Organization for Economic Cooperation and Development
(OECD).
The three essays reach a coherent set of conclusions. In particular, they show that
uncertainty, market structure and default costs influence financial and product market de-
cisions and the probability of default. Moreover, they show that the default probability is
influenced directly by the parameters, but it is also influenced by the way firms optimally
adjust their financial and product market decisions when the parameters change. There-
fore a less favorable environment does not necessarily imply higher default probability, as
firms may respond by financing less with debt; RESUMO:Decisões financeiras e no mercado do produto são cruciais para o sucesso ou falência de
uma organização. Estas decisões são influenciadas pelo ambiente econômico, dinâmico e
competitivo em que as empresas operam e, por sua vez, afetam a capacidade das empresas
cumprirem suas obrigações.
Esta tese é constituída por três ensaios distintos, mas interrelacionados que exploram
o impacto das decisões financeiras e operacionais sobre o risco de incumprimento. Os dois
primeiros ensaios estudam a probabilidade de incumprimento de equilíbrio, num modelo
duopólio, com produtos diferenciados, com dois estágios e com incerteza, onde as em-
presas no primeiro estágio decidem a sua estrutura financeira, e no segundo estágio as
suas quantidades. Estes dois ensaios analisam o impacto de alterações dos parâmetros
do modelo na probabilidade de incumprimento de equilíbrio (o primeiro ensaio usa ferra-
mentas de estática comparada, enquanto o segundo usa simulação numérica). É analisado
o impacto de mudanças no nível de incerteza, no grau de substituibilidade do produto,
nos custos marginais e no custo de incumprimento sobre as decisões de financiamento e
de produção, e sobre o risco de incumprimento. O terceiro ensaio testa empíricamente a
relação entre estrutura de mercado e as decisões da estrutura de capital e a sua relação
com a probabilidade de incumprimento, utilizando uma amostra de onze membros da
Organização para a Cooperação e Desenvolvimento Económico (OCDE).
Os três ensaios chegam a um conjunto coerente de conclusões. Nomeadamente, mostram
que a incerteza, a estrutura de mercado e custos de incumprimento infuenciam as decisões
financeiras e no mercado do produto e a probabilidade de incumprimento. Além disso,
mostram que a probabilidade de incumprimento é infuênciada diretamente pelos parâmetros
, mas também é infuênciada pela forma como as empresas ajustam de forma ótima as
suas decisões financeiras e no mercado do produto quando os parâmetros alteram. Por
conseguinte, um ambiente menos favorável não significa necessariamente maior probabilidade
de incumprimento, uma vez que as empresas podem responder financiando-se com menos dívida
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Karpavičiūtė-Majauskienė, Daiva. "Įmonių kapitalo struktūros formavimo tyrimai." Master's thesis, Lithuanian Academic Libraries Network (LABT), 2005. http://vddb.library.lt/obj/LT-eLABa-0001:E.02~2005~D_20050525_145021-91453.
Full textAbstract:
Object of the research – formation of capital structure. Objective of the research is to investigate the behaviour of Lithuanian companies from the pecking order theory and harmonization of business and financial risk point of views. The main tasks are solved: 1) to investigate the traditional and modern theories of capital structure and to make comparison analysis; 2) to find out the factors that influence the formation of capital structure; 3) to verify the hypothesis of making capital structure decisions under pecking order theory; 4) to verify the hypothesis of harmonization of business and financial risk making the decisions of capital structure formation. The applied area of the research - the companies that shares are quoted in the Vilnius Security Exchange and are listed in the Official and Current Trade List. In order to analyse the main theories of capital structure formation and to make its comparison, to find out the factors that effect capital structure the scientific woks were studied. Verifying of the hypothesis of making capital structure decisions under pecking order theory and harmonization of business and financial risk the correlation analysis was done and graphical methods were applied.
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Ackehed, Ida, and Olsson Elias Molin. "Styrande faktorer och aktiemarknadens påverkan på finansiering inom IT-branschen." Thesis, Södertörns högskola, Företagsekonomi, 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:sh:diva-35462.
Full textAbstract:
The purpose of this study has been to examine the possible relationship between patterns on the stock market and the capital structure of IT-companies. Furthermore, the study attempts to contribute a deeper understanding of the ways Chief Financial Officers (CFO) and Chief Executive Officers (CEO) handle aspects pertaining to levels of debt, solidity, the market when making investment decisions and factors that influence a company´s value. This has been done using the Market Timing Hypothesis as the main theoretical frame of reference. The study has primarily been conducted using quantitative data analysis in the form of multiple regression. Qualitative interviews have been subsequently conducted with the purpose of enhancing the statistical findings. The results from the study indicate that financial decisions largely vary depending on the situation, albeit market value being an influencing factor. Moreover, the profitability of the company and the amount of fixed assets play a role in financial decisions. The respondents further noted that the amount of equity and debt of the company does affect its value.Studiens syfte var att undersöka sambandet mellan aktiemarknadens fluktuationer och företag i IT-branschens val av kapitalstruktur. Även att söka en djupare förståelse genom att ta del av Chief Financial Officers (CFO) och Chief Executive Officers (CEO) perspektiv på skuldsättningsgrad, soliditet, aktiemarknadens rörelser vid kapitalplacering samt vad som påverkar ett företags värde. Detta har skett med Market timing hypotesen som teoretisk utgångspunkt. Den huvudsakliga undersökningsmetoden har bestått av en kvantitativ dataanalys i form av multipel regressionsanalys. Kvalitativa intervjuer har därefter utförts i syfte att komplettera datan och för att förtydliga hur dessa aspekter hanteras i den praktiska verkligheten. Resultaten från studien indikerar att finansieringsbeslut är högst situationsbetingade men att marknadsvärdet har en viss påverkan. Utöver detta visade sig lönsamhet och andel anläggningstillgångar i förhållande till totala tillgångar väga tungt. De respondenter som intervjuades menade även att mängden eget kapital och skuld ett företaget besitter påverkar dess värde.
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Mogashoa, Mogori Thomas. "Capital structure decision making for SMMEs in the South African context." Diss., University of Pretoria, 2017. http://hdl.handle.net/2263/59880.
Full textAbstract:
The purpose of this study is to explore how managers of SMMEs make capital
structure decisions for their firms in the South African context.
The study is a qualitative and is grounded in interpretivism. The literature unpacked
pecking order and trade off theories and together with taxation and profitability they
were explored in research questions posed to SMME managers during semi-structured
interviews.
The findings in this study is that SMME managers find the notion of taking up debt for
the sake of the tax incentive to be counter intuitive, debt repayments become an
expense that erode the firm's profitability and also exposes the firm to potential
bankruptcy. The notion of borrowing without a business purpose, presents a challenge
to managers. Business objectives thus present the most compelling determinant of
capital structure decision making in this study. Pecking order theory is supported by the
findings in this study. This study finds that the Trade off theory has no standing on
capital structure decision making in SMMEs and managers explore alternative funding
methods such as loan accounts.
The implications of this study include a call for academia to undertake descriptive
studies to pursue these findings. Development of succinct business objectives will
assist SMMEs bridge the gap between themselves and funding institutions.Mini Dissertation (MBA)--University of Pretoria, 2017.
ms2017
Gordon Institute of Business Science (GIBS)
MBA
Unrestricted
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Sun, Ji. "Research on capital structure and financing decision : evidence from the UK." Thesis, Durham University, 2013. http://etheses.dur.ac.uk/7335/.
Full textAbstract:
This thesis focuses on whether the decisions of firms’ external financing activities are influenced by ownership structure, market timing, or public media in the UK context. Chapter 2 examines the effect of ownership on firm capital structure by using a universal sample of UK firms over the period 1998–2009. The empirical results show that the relation between managerial share ownership (MSO) and leverage level is non-monotonic. This study further investigates the effect of ownership on firm financial issuance activities. The finding suggests that firms with higher MSO are more likely to choose equity issues instead of bonds, supporting the theory that managers have more incentive to avoid the bankruptcy risk associated with a bond issue. Further, this study finds a hot (cold) stock market valuation strengthens (weakens) this positive effect of higher MSO on the likelihood of equity issue. Chapter 3 analyzes the role of ownership characteristics in a firm’s choice of seasoned equity offering (SEO) methods, offer price discount, and market reactions to SEO announcements. This chapter examines UK firms’ choices of seasoned equity issue methods, particularly the differences between rights offers (ROs), placings (PLs), open offers (OOs), and combinations of placing and open offer (PLOOs). This study finds that ownership-concentrated firms prefer rights or open offers to placings, supporting the argument that large shareholders favour right-preserving issues as the SEO method to maintain benefits of control. Consistent with the managerial entrenchment hypothesis, the results indicate that firms with high managerial ownership are more likely to choose placing as the SEO method. This study also suggests that firms with lower institutional ownership are more likely to conduct placing to improve monitoring. Chapter 4 investigates the role of the news media in SEOs in the UK market. The results show that issuers with positive (negative) media news are likely to price SEO shares higher (lower) and have higher (lower) announcement returns. This finding supports the argument that the media has impact on stock price through affecting investor expectations. Moreover, this study finds that issuers with greater pre-SEO media coverage are likely to have a more negative market response to the announcement, which strongly supports Merton’s investor recognition model.
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Wang, Hao 1973. "Three essays on corporate debt, capital structure and managerial entrenchment." Thesis, McGill University, 2007. http://digitool.Library.McGill.CA:80/R/?func=dbin-jump-full&object_id=103307.
Full textAbstract:
This dissertation comprises three essays. In the first essay, I develop a contingent-claims model to investigate the impact of managerial entrenchment on corporate policies and security valuation. The model emphasizes the role that managerial agency issues play in determining both a firm's dividend payout and capital structure. I show quantitatively that self-interested managers' leverage choices deviate from those ex ante maximize firm values. The results suggest that dividend yields are negatively affected by both leverage ratios and managerial entrenchment. They provide implications for empirical research attempting to relate dividend policy to capital structure. In addition, the model offers a new framework to measure managerial entrenchment using observed leverage and dividend payout.In the second essay, we use a set of structural models to evaluate the price of default protection for a sample of US corporations. In contrast to previous evidence from corporate bond data, CDS premia are not systematically underestimated. In fact, one of our studied models has little difficulty on average in predicting their level. For robustness, we perform the same exercise for bond spreads by the same issuers on the same trading date. As expected, bond spreads relative to the Treasury curve are systematically underestimated, consistent with their being driven by significant non-default components. This is not the case when the swap curve is used as a benchmark, suggesting that previously documented underestimation results may be sensitive to the choice of risk free rate.
In the third essay, we develop a valuation model that simultaneously captures credit risk and interest rate risk, and apply it to study the valuation of putable corporate bonds. We ask what risks put features provide insurance against in practice - credit risk, liquidity risk or interest rate risk - and to what degree? We find that they reduce the components of all three risks in bond spreads. The most important, perhaps surprisingly is default or spread risk, followed by term structure risk. The reduction in the liquidity component is present but rather small.
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Weigl, Johannes. "Market-Timing of Capital Structure and Factors Influencing the Leverage Decision of Firms." Doctoral thesis, Universitätsbibliothek Chemnitz, 2012. http://nbn-resolving.de/urn:nbn:de:bsz:ch1-qucosa-81088.
Full textAbstract:
The purpose of this dissertation is to contribute to the closure of these aforementioned research gaps. Answering these calls, the following research objectives are proposed:
1. Understanding the main factors that have an influence on the capital structure decision of firms.
2. Understanding how the capital structure of firms differs among various industries and to fathom cross-sectional differences in the importance of debt determinants among industries.
3. Investigating the influence of time on the capital structure decision of firms. In specific, it must be found out whether certain debt determinants alter their effect on the capital structure decision of firms over time.
4. Studying the market-timing effect of debt financing. It must be researched how managers time the debt market when engaging in bond or loan issues.
5. Empirically proving how stylized factors and market-timing behaviour influences the transaction of equity, bond and loan issues as well as of share repurchases.
6. Finally, discussing how far the stylized facts can be explained by existing capital structure theory in order to crown the theory, whose notion can best account the observed financing patterns across the world.
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Ritterfeldt, Andreas, Malin Jidéus, and Pernilla Franck. "Capital Structure Decision : A case study of SMEs in the road freight industry." Thesis, Jönköping University, JIBS, Accounting and Finance, 2007. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-907.
Full textAbstract:
Companies need capital in order to run their business, do necessary investments and grow larger. These actions are combined with high costs where both internal and external financing might be appropriate. Capital structure is the relation between debt and equity.
In this thesis we have focused on the decision behind the capital structure. We have focused on the road freight industry and we have tried to find out how management reason about their decision. The purpose of this thesis is therefore to describe and analyze SMEs’ decision of capital structure within the road freight sector in the Jönköping region. Emphasise is put on the different aspects that influence the capital structure decision and to what extent this is a strategic issue coloured by personal beliefs.
To fulfill the purpose mainly a qualitative approach with primary data from structured interviews has been used. The interviews were conducted face-to-face with six owner and/or managers. Further on, secondary data from the firms’ annual reports were used and analyzed.
The pecking order theory explains that firms, especially SMEs, prefer to finance their businesses with internally generated funds. Focus of the theoretical part are on theories of what factors that affects the capital structure decision, how this can be argued to be a strategic question for SMEs, how risk affects the capital structure decision and how this decision is made in a family business. These theories are presented to shed light on the capital structure decision making process of SMEs.
From this study it is found that the majority of the companies’ prefer internal financing i.e. reinvested earnings, and as a second alternative to use debt in form of bank loans. The study also shows that the reasons behind this preferred order are the will of being independent, previous experience and managements’ risk-taking propensity. We believe that these factors combined with beliefs about debt and realized need for debt works as a base for how a capital structure strategy is discussed, formed and developed. From this study it can also be concluded that risk indirect affects the capital structure decision and that a restrictive view on debt leads to a restrictive desire to grow since a fast growth in most cases needs to be financed by debt. Last, the study concludes that even though the studied firms prefer to finance with retained earnings they all use debt more or less.
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Dickerson, Steven Scott 1966. "The firm's capital structure decision: Market power, debt maturity, and uncertain cash flows." Diss., The University of Arizona, 1998. http://hdl.handle.net/10150/288851.
Full textAbstract:
A current outgrowth of the nearly four decades of research in capital structure is the investigation of linkages between the firm's decisions and factors outside of strictly financial determinants. The three essays that comprise this dissertation offer contributions to this area of research. The first essay explores the connection between the product market and the firm's financial decisions. I hypothesize that market power acts as a buffer against strategic action on the part of a competitor and the existence of market power allows the firm to hold more debt in its capital structure. Using a binary choice model, I find that firms with market power have a higher propensity to issue public debt rather than public equity. In addition, no evidence is found suggesting agency costs have a significant impact on the security issue decision. The second essay is an extension of an analytical model of the free-cash-flow hypothesis developed by Stulz (1990). Debt can increase the value of a firm by reducing the amount of cash the manager can misappropriate or invest in personal projects. The extension is developed under the assumption that the stockholders do not know with certainty the mean of the cash flow distribution. The extension drives two main results: one, the amount of debt in the capital structure of a firm is dependent upon the precision of the shareholders' a priori estimate of future cash flows; and, two, the maturity of the firm's debt is dependent upon the shareholders' estimate of the mean of future cash flow. The third essay empirically explores the relationship between the firm's maturity structure of debt and the firm's maturity structure of assets. New variables are constructed to specifically test the maturity-matching hypothesis. The dependent variable is the change in average maturity of debt caused by a new issue. An independent variable measures the difference between the average maturity of debt and the average maturity of assets. I find statistically significant evidence supporting the maturity-matching hypothesis and inconsistent support for the agency hypothesis.
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Noronha, Gregory Mario. "Industry characteristics, agency theory, and the interaction of capital structure and dividend policy." Diss., Virginia Tech, 1990. http://hdl.handle.net/10919/39752.
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