Debt structure: a solution to the puzzle of capital structure

Poursoleyman, Ehsan; Mansourfar, Gholamreza; Abidin, Sazali

doi:10.1108/ijmf-03-2021-0155

Cited by 6 publications

(2 citation statements)

References 91 publications

(180 reference statements)

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“…Another stream of research investigates the impacts of CSR reporting on information asymmetry from the output perspective. In other words, researchers believe that if CSR reporting can mitigate the information asymmetry between the parties, then lower levels of information asymmetry can result in the reduction in external financing costs and better access to financial resources because lower levels of information asymmetry are associated with the reduction in external financing costs (Poursoleyman, Mansourfar, & Abidin, 2020 , 2022 ). Employing an international setting consisting of 3594 firms from 31 stock indices, García‐Sánchez et al ( 2019 ) found that CSR reporting is negatively associated with financial constraints.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate social responsibility and COVID‐19: Prior reporting experience and assurance

Poursoleyman

Mansourfar

Nazari

et al. 2022

Business Ethics Env & Resp

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The novel COVID‐19 has created an exogenous shock to capital markets and, hence, an ideal opportunity for researchers to assess whether CSR‐related activities provide an insurance‐like mechanism to protect firms against the shock. Using a large sample of 4361 firms domiciled in 40 countries, we investigate the roles of CSR reporting and assurance in the negative consequences of COVID‐19 on firm value. The results confirm that prior CSR reporting experience buffers firms against the adverse effects of the health crisis. The results also support that not only does the assurance on CSR reports create a buffering effect against the health crisis, but it also intensifies the buffering effects of prior CSR reporting experience against the pandemic. Moreover, using difference‐in‐difference method for testing the link between CSR reporting and firm value, we show that the positive association of reporting and assurance with firm value is more pronounced during the pandemic as compared with the years preceding it. The results of this study are robust to various analyses. Replicating the analyses to the context of the global financial crisis, we find that prior CSR reporting experience and assurance provide similar buffering effects when a market is exposed to various exogenous shocks. The results also hold for the mandatory disclosure regimes. By distinguishing first and subsequent reports and assurance, we show that, unlike subsequent CSR reports and assurance, the initial ones cannot mitigate the negative effects of the crisis on firm value, indicating that stakeholders take into account longer‐term CSR reporting experiences. Aside from reporting and assurance aspects of CSR, we analyze the role of CSR report's quality and accuracy and show that the adoption of Global Reporting Initiatives (GRI) frameworks can enhance socially responsible firms' resilience against systematic shocks.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate social responsibility and COVID‐19: Prior reporting experience and assurance

Poursoleyman

Mansourfar

Nazari

et al. 2022

Business Ethics Env & Resp

Self Cite

View full text Add to dashboard Cite

show abstract

“…Despite extensive research on the relationship between debt financing and financial performance, empirical studies have so far yielded conflicting findings (Poursoleyman, Mansourfar, & Abidin, 2023). According to a 2018 study by Deng, there is a link between debt financing and financial performance that is negative but statistically insignificant.…”

Section: Statement Of the Problemmentioning

confidence: 99%

Effect of Bank Loan Financing on Financial Performance of Smes in Mombasa County, Kenya

KYENGO,

ROCHE, PhD,

KAVALE, PhD

2023

strategicjournals.com

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Most firms globally are Small and Medium Enterprises (SMEs), which play a significant role in employment creation and global economic development. Despite the role of SMEs in building economic growth in Kenya, they face several challenges. Existing literature indicates that many SMEs fail to expand due to limited financial resources, poor management, outdated technologies, stiff competition from more prominent firms, poor management of account receivables, and unfavourable government policies, among others. Poor access to loans and limited finance are stated as the leading causes limiting the growth of Small and Medium Enterprises. Therefore, this study determined the effect of bank loan financing on the financial performance of SMEs in Mombasa County. The study adopted resource dependency theory. The research design used in the study was descriptive. 109 SMEs in Mombasa County, Kenya, were chosen as the sample size using the stratified sampling technique. The study adopted primary data. To examine the validity and reliability of the questionnaires, pilot research involving 15 SMEs was conducted. The validity of the questionnaire was evaluated using factor analysis, while the reliability was assessed using Cronbach's alpha. With the help of the statistical package for social science (SPSS version 25), descriptive and inferential statistics were used to analyze the data. The hypothesis analysis was tested within the range of 95% level confidence interval and 5% levels of significance.The findings showed that bank loan financing significantly affects SME financial performance indicating that hypothesis H 0 was rejected at the 5% significance. According to the study data, bank loan financing is positively correlated with the financial performance of SMEs in Mombasa County, Kenya. SMEs' financial performance was significantly influenced by bank loan financing. The study recommended that SMEs consider using bank loan financing to improve their performance. The government should implement measures to make it easier for SMEs to access bank loans.

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Does the firm's life cycle matter in the relationship between short‐term debt and investment efficiency?

Abuhommous

2024

Int. J Fin Econ

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In this paper, we investigate the role of short‐term debt in investment efficiency, and we examine the impact of the firm's life cycle stages on this relationship. Using data from non‐financial companies in the United States from 1971 to 2021, we argue that the short‐term debt may reduce the information asymmetries and discipline the management decisions, thus improving the investment efficiency. We argue, however, that the relationship varies throughout different life cycle stages. We find that short‐term debt positively influences investment efficiency and over‐investment. Furthermore, the firm's life cycle significantly impacts investment efficiency, with the introduction and growth stages negatively associated with it. The life cycle also affects the relationship between short‐term debt and investment efficiency, particularly during the growth stage. These results emphasis the role of short‐term debt and the firm's life cycle in mitigating information asymmetries and shaping management behaviour.

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Debt structure: a solution to the puzzle of capital structure

Cited by 6 publications

References 91 publications

Corporate social responsibility and COVID‐19: Prior reporting experience and assurance

Corporate social responsibility and COVID‐19: Prior reporting experience and assurance

Effect of Bank Loan Financing on Financial Performance of Smes in Mombasa County, Kenya

Does the firm's life cycle matter in the relationship between short‐term debt and investment efficiency?

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