Corporate governance and capital structure in the periods of financial distress. Evidence from Greece

Abstract

This study examines the relationship between corporate governance and capital structure employing data from the Athens Stock Exchange for the period 2005-2014. This period encompasses the sovereign debt crisis erupted in Greece at the end of 2009 and still continues to hit households and businesses alike. The results from the panel regression analysis signify the role of corporate governance structures in determining the capital structure of the Greek listed firms. In particular, the empirical results reveal a negative impact of board size on debt levels, which is weakened during the debt crisis period. In contrast, the presence of outside directors provides the appropriate certification to use more debt. Finally, growth opportunities and profitability are the two firm-specific factors which effect was weakened during the financially-constraint period.

CEO Tenure and Financing Decisions of Nigerian Non-Financial Listed Firms: A Dynamic Panel Approach

“…For instance, the variable board size displays a negative coefficient and thereby revealing that as the Nigerian non-financial listed firms' board size grows, their leverage ratio decreases. This finding provides support to the studies by Dimitropoulos (2014); Kyriazopoulos (2017); Sewpersadh (2019). These empirical works argue that firms with larger board members are associated with lower debt in their capital structure.…”

“…Similarly, as shown by Yermack (1996), investors have the perception that companies with smaller board size are associated with robust governance system. In addition, there is strong evidence from the literature that creditors attached more value to the firms with sound corporate governance, and thus board size is negatively related to the supply of debt (Abobakr & Elgiziry, 2016;Dimitropoulos, 2014;Kyriazopoulos, 2017;Sewpersadh, 2019). The agency theory also pointed out that the presence of independent directors on corporate boards may enhance the effectiveness of firms' decisions (Zahra & Pearce, 1989).…”

“…In this regard, empirical evidence reported that the stock market reacts positively to the appointment of outside directors. Hence, empirical studies found that firms' leverage decreases as the proportion of independent directors on boards increases (Kyriazopoulos, 2017;Purang, Abdullah, & Bujang, 2016;Wen, Rwegasira, & Bilderbeek, 2002).…”

The Effect of Financial Performance and Innovation on Leverage: Evidence from Indonesian Food and Beverage Sector

“…The separation of management and ownership functions is very vulnerable to agency conflicts between the parties. Agency conflict occurs when managers tend to make decisions that benefit themselves rather than the interests of shareholders (Kyriazopoulos, 2017;Vo, 2017). This problem certainly creates conflict with shareholders because it is not under corporate objectives, namely maximizing the prosperity of shareholders.…”

Governança Corporativa e Desempenho dos Bancos Listados na B3 em Ambiente de Crise Econômica

“…Os resultados dos escores de eficiência obtidos por meio da DEA formarão, para cada ano da análise, a variável dependente desempenho (DESEMP), cuja natureza é contínua, positiva e limitada a 1, que é o escore máximo atribuído pela DEA às unidades mais eficientes. Em seguida, definiram-se as variáveis independentes: (i) prática de governança corporativa (PGC), como uma dummy que assume o valor 1, se o banco for integrante de algum dos níveis de GC da B3, ou o valor 0, se ele não for integrante, (ii) crise econômica (CRISE), também na forma de dummy, de acordo com a proposição de Kyriazopoulos (2017) e Maranho et al (2016), assumindo o número 1, se o escore de eficiência se referir ao biênio 2015/2016 (período 'Com_Crise'), ou o número 0, para os dados referentes ao biênio 2013/2014 (período 'Sem_Crise'), e (iii) o componente interativo resultante do produto PGC*CRISE, para testar a relação conjunta das duas variáveis com o desempenho.…”