Debt structure and corporate performance in emerging markets

Davydov, Denis

doi:10.1016/j.ribaf.2016.04.005

Cited by 38 publications

(28 citation statements)

References 47 publications

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“…Salim and Yadav (2012) using data of Malaysian listed firms, Le and O’Brien (2010) based on data of Chinese listed firms, Ebaid (2009) using data from Egypt and Zeitun and Tian (2007) using data from Jordan, all report the negative effect. An exception is Davydov (2016). Using data of firms from Brazil, Russia, India and China (BRIC) countries, Davydov (2016) found the positive impact of debt financing.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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Debt financing and firm performance: The moderating role of board independence

Pham

Nguyen

2020

Journal of General Management

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This article investigates the moderating role of board independence in the relationship between debt financing and performance of emerging market firms. We have used an empirical model in which the firm’s accounting profitability is a dependent variable and the independent variables are debt financing, board independence, the interaction variable made of debt financing and board independence as well as various control variables. Our analysis is based on a panel data set of 300 listed firms in Vietnam between 2013 and 2017. Our study finds that debt financing has a significantly negative effect and that board independence reduces the adverse impact of debt financing on accounting profitability. Our results are consistent across different estimation models and methods.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…An exception is Davydov (2016). Using data of firms from Brazil, Russia, India and China (BRIC) countries, Davydov (2016) found the positive impact of debt financing. In this study, he did not consider any situational and contingency factors that could influence the effectiveness of debt usage.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Debt financing and firm performance: The moderating role of board independence

Pham

Nguyen

2020

Journal of General Management

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“…The debt-to-assets ratio is determined by dividing a firm's total debts by its total assets. Some studies revealed that the debt-to-assets ratio had a positive effect on companies' financial performance (Gill and Obradovich, 2012;Davydov, 2016;Detthamrong et al 2017). However, other studies found a negative association between the debt-to-assets ratio and the firms' performance (Luper and Isaac, 2012;Zelgalve and Berzkalne, 2015;Le et al 2017).…”

Section: Debt-to-income Ratiomentioning

confidence: 99%

“…On the other hand, other studies have revealed that the size of a company had a positive and significant influence on its profitability (Jang and. Park, 2011;Al-Najjar, 2014;Davydov, 2016;Ilaboya and Ohiokha, 2016). Bayoud et al (2018) examined the relationship between firms' size and financial performance of six banks listed in the Moroccan stock exchange over the period 2004-2016 by using the Fully Modified Ordinary Least Squares (FMOLS).…”

Section: • Firm Sizementioning

confidence: 99%

Market Risk and Financial Performance of Non-financial Companies Listed on the Moroccan Stock Exchange

Kassi¹,

Rathnayake²,

Edjoukou³

2019

Preprint

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This study examines the effect of market risk on the financial performance of 31 non-financial companies listed on the Casablanca Stock Exchange (CSE) over the period 2000-2016. We utilize three alternative variables to assess financial performance, namely return on assets, return on equity and profit margin. Next, we use the degree of financial leverage, the book-to-market ratio, and the gearing ratio as market risk variables. Besides, we employ the pooled OLS model, the fixed effects model, the random-effects model, the difference GMM and the system GMM models. The results show that market risk indicators have a negative and significant influence on the companies' financial performance. The elasticities are greater following the book-to-market ratio compared to the degree of financial leverage and the gearing ratio, respectively. In most cases, the firm size, the tangibility ratio, and the cash holdings ratio have a positive effect on financial performance, whereas the firms' age, the debt-to-income ratio, stock turnover, and leverage hurt the performance of these non-financial companies. Therefore, decision-makers and managers should mitigate market risk through appropriate strategies of risk management, such as derivatives and insurance techniques.

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“…The debt-to-assets ratio is determined by dividing a firm's total debts by its total assets. Some studies revealed that the debt-to-assets ratio had a positive effect on companies' financial performance (Gill and Obradovich 2012;Davydov 2016;Detthamrong et al 2017). However, other studies found a negative association between the debt-to-assets ratio and the firm's performance (Salim and Yadav 2012; Zelgalve and Berzkalne 2015; Le and Phan 2017).…”

Section: Debt-to-assets Ratiomentioning

confidence: 99%

Market Risk and Financial Performance of Non-Financial Companies Listed on the Moroccan Stock Exchange

Kassi

Rathnayake

Louembé

et al. 2019

Risks

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This study examines the effect of market risk on the financial performance of 31 non-financial companies listed on the Casablanca Stock Exchange (CSE) over the period 2000–2016. We utilized three alternative variables to assess financial performance, namely, the return on assets, the return on equity and the profit margin. We used the degree of financial leverage, the book-to-market ratio, and the gearing ratio as the indicators of market risk. Then, we employed the pooled OLS model, the fixed effects model, the random effects model, the difference-GMM and the system-GMM models. The results show that the different measures of market risk have significant negative influences on the companies’ financial performance. The elasticities are greater following the degree of financial leverage compared with the book-to-market ratio and the gearing ratio. In most cases, the firm’s age, the cash holdings ratio, the firm’s size, the debt-to-assets ratio, and the tangibility ratio have positive effects on financial performance, whereas the debt-to-income ratio and the stock turnover hurt the performance of these non-financial companies. Therefore, decision-makers and managers should mitigate market risk through appropriate strategies of risk management, such as derivatives and insurance techniques.

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Debt structure and corporate performance in emerging markets

Cited by 38 publications

References 47 publications

Debt financing and firm performance: The moderating role of board independence

Debt financing and firm performance: The moderating role of board independence

Market Risk and Financial Performance of Non-financial Companies Listed on the Moroccan Stock Exchange

Market Risk and Financial Performance of Non-Financial Companies Listed on the Moroccan Stock Exchange

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