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This article provides empirical evidence on the zero-leverage phenomenon for a sample of European listed firms for the period 1995–2016. It is shown that there are two types of firms with zero leverage: the financially constrained firms that face obstacles in obtaining external finance, as predicted by the financial constraints hypothesis; and the financially unconstrained firms that maintain zero leverage as a consequence of a financing decision, which supports the financial flexibility hypothesis. The zero-leverage phenomenon is also influenced by the financial system that prevails in each country, being boosted (inhibited) in market-based (bank-based) financial systems, and by the country’s macroeconomic conditions, with the recent financial and sovereign debt crises increasing the propensity for zero leverage in market-based countries. We also find that the financial flexibility hypothesis seems to be more important in market-based systems and that the financial constraints approach did not gain importance during the crisis period. Our results are robust to the use of alternative measures of debt conservatism, explanatory variables, and econometric methods and maintain their validity when we allow for endogeneity in firm size and dividend payments. JEL CLASSIFICATION G32

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Purpose From the network approach, the purpose of this paper is to provide empirical evidence about the role of international cooperative alliances (CAs) in the decision of small- and medium-sized enterprises (SMEs) to internationalize and remain in the external market. Design/methodology/approach To fulfill the proposed objective, qualitative research was carried out through analyzing two SMEs (case studies) in the Portuguese textile sector. Data collection was based on structured interviews, direct observation and some documental analysis. Findings The results show that the analyzed SMEs internationalized immediately after their creation, with this decision not being influenced by CAs but rather by the founder’s role and above all by a saturated domestic market. Practical implications Alliances are determinant in subsequent developments in the foreign market, allowing SMEs to reach new markets, increase their market share and consolidate their name in the international market. Thus, managers/entrepreneurs should adopt strategies that stimulate the firm’s expansion in the external market, prioritizing the formation of CAs with international partners. Originality/value This study suggests that none of the dominant models can exclusively explain the internationalization process of the studied SMEs. Therefore, this research has implications for the recent stream of literature that argues for a holistic view of internationalization models, considering the arguments of all models instead of only one.

Systematic Literature Review (SLR) is a means to synthesize relevant and high quality studies related to a specific topic or research questions. In the Primary Selection stage of an SLR, the selection of studies is usually performed manually by reading title, abstract, and keywords of each study. In the last years, the number of published scientific studies has grown increasing the effort to perform this sort of reviews. In this paper, we proposed strategies to detect non-papers and duplicated references in results exported by search engines, and strategies to rank the references in decreasing order of importance for an SLR, regarding the terms in the search string. These strategies are based on Information Retrieval techniques. We implemented the strategies and carried out an experimental evaluation of their applicability using two real datasets. As results, the strategy to detect non-papers presented 100% of precision and 50% of recall; the strategy to detect duplicates detected more duplicates than the manual inspection; and one of the strategies to rank relevant references presented 50% of precision and 80% of recall. Therefore, the results show that the proposed strategies can minimize the effort in the Primary Selection stage of an SLR.

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Purpose The purpose of this paper is to investigate whether the effect of country and corporate governance mechanisms on zero leverage is heterogeneous across market- and bank-based financial systems. Design/methodology/approach Using logit regression methods and a sample of listed firms from 14 Western European countries for the 2002–2016 period, this study examines the propensity of firms having zero leverage in different financial systems. Findings Country governance mechanisms have a heterogeneous effect on zero leverage, with higher quality mechanisms increasing zero-leverage propensity in bank-based countries and decreasing it in market-based countries. Board dimension and independency have no impact on zero leverage. A higher ownership concentration decreases the propensity for zero-leverage policies in bank-based countries. Research limitations/implications This study’s findings show the importance of considering both country- and firm-level governance mechanisms when studying the zero-leverage phenomenon and that the effect of those mechanisms vary across financial and legal systems. Practical implications For managers, this study suggests that stronger national governance makes difficult (favours) zero-leverage policies in market (bank)-based countries. In bank-based countries, it also suggests that the presence of shareholders that own a large stake makes the adoption of zero-leverage policies difficult. This last implication is also important for small shareholders by suggesting that investing in firms with a concentrated ownership reduces the risk that zero-leverage policies are adopted by entrenched reasons. Originality/value To the best of the authors’ knowledge, this is the first study to consider simultaneously the effects of both country- and firm-level governance mechanisms on zero leverage and to allow such effects to vary across financial systems.