Capital Structure, Macroeconomic Variables & Stock Returns. Evidence from Greece

Abstract

This paper aims to investigate the impact that the capital structure of a firm has on its stock price performance. We apply regression analysis at a sample consisting of Greek listed non-financial companies over the period 1998-2009, both at the full sample level and at four leverage deciles. In doing so, we test if leverage is priced as a risk factor by constructing a leverage factor. The main contribution of our work is that we diversify capital structure studies by broadening the limited work that has been accomplished on the base of leverage as an explanatory variable of returns. Our findings show that the leverage risk factor contains significant information content and that it adds a considerable portion in the explanation of stock returns.

Impact of Corporate Governance on Value Relevance: A Comparative Analysis using West African Stock Exchanges

“…The European Union and North American countries were the first to adopt the new IFRS, followed by some Asian and South American countries. Around 30 African countries have adopted these new international accounting standards (Framework, 2018), primarily because of all the better benefits that the new IFRS provide, such as a high level of corporate transparency, cross-border enhancement comparability of financial reports, and improvement of financial and accounting reporting quality (Mita et al, 2018), among others (Artikis & Nifora, 2012); Corporate governance mechanisms are another pillar that ensures high-quality accounting standards (Tweedie & Seidenstein, 2004). Previous compliance studies, such as those conducted by (Juhmani, 2017;Mbir et al, 2020;Pope & McLeay, 2011;Verriest et al, 2013) have demonstrated that IFRS adoption mandatory does not guarantee fully compliance with IFRS mandatory disclosure requirements and provide evidence that strong corporate governance structure and mechanism (Board structure, ownership, and Audit committee) enhance financial reporting quality, transparency, and consistency (Byrne et al, 2002;Deakin & Konzelmann, 2004).…”

Pengaruh Kinerja Keuangan dan BI Rate terhadap Return Saham Sektor Otomotif Indonesia

“…Hal ini menunjukkan bahwa tingkat DER yang tinggi menunjukkan komposisi total hutang (utang jangka pendek dan utang jangka panjang) semakin besar apabila dibandingkan dengan total modal sendiri, sehingga hal ini akan berdampak pada semakin besar pula beban perusahaan terhadap pihak eksternal (para kreditur) dalam memenuhi kewajiban hutangnya, yaitu membayar pokok hutang ditambah dengan bunganya. Peningkatan beban terhadap kreditur akan menunjukkan sumber modal perusahaan sangat tergantung dari pihak eksternal, serta semakin tingginya tingkat risiko suatu perusahaan (Febriawan & Santosa, 2018;Artikis & Nifora, 2012).…”

Macroeconomic Determinants of Stock Market Fluctuations: The Case of Indonesia

“…In this regard, Siliverstovs and Kholodilin (2010) further argued that this information was highly useful for the allocation of strategic assets in different sectors to control the risks associated with macroeconomic variables. Likewise, Artikis and Nifora (2012) in their research was found to study the interaction among the stock market and macroeconomic variables in Greece. The findings of their research indicated that the movement under the stock market was not the leading indicator associated with the fluctuations in macroeconomic variables while the macroeconomic dynamics were found to partially explain the fluctuations within the stock market.…”