Equity Liquidity and Firm Investment: Evidence from Pakistan

Rashid, Abdul; Karim, Maria

doi:10.26710/jafee.v4i2.523

Cited by 4 publications

(3 citation statements)

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“…According to researchers, blockholders reduce information asymmetry and impact positively on long-term financial performance (Florackis & Ozkan, 2009;Pawlina & Renneboog, 2005). Claessens et al (1997); Rashid (2011) study on 706 Czech Republic firms from 1992 to 1993 show that ownership of a blockholder enhances firm performance.…”

Section: Blockholder Ownershipmentioning

confidence: 99%

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

et al. 2023

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Investors and governments have drawn attention to company governance due to the 2007 ﬁnancial crash. This study aims to determine the impact of board characteristics, i.e. women on the board, busy directors, blockholder ownership, and director qualiﬁcation on ﬁrm ﬁnancial performance based on evidence from Pakistan. Former research on the impact of board features on company ﬁnancial performance is built on contradictory theoretical viewpoints and factual results, which are primarily built on regression and are equivocal. Based on the con- ﬁgurational analysis, this study clariﬁes previously ambiguous ﬁndings concerning the link between keyboard attributes and business ﬁnancial success. This research draws upon theories, including resource dependence and agency theory. The study utilized fuzzy-set qualitative comparative analysis to examine a sample of 60 non-ﬁnancial companies listed on the Pakistan Stock Exchange (PSX). Data referred to the pre-crisis period. Findings have shown that diﬀerent combinations of board attributes can signiﬁcantly impact a ﬁrm proﬁtability, i.e. return on assets (ROA) and return on equity (ROE). Practical implications spotlight the policymakers need to evaluate corporations current level of regulatory and competitive development to plan strategy accordingly. It emphasises unique governance solutions for the non-ﬁnancial sector.

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Section: Blockholder Ownershipmentioning

confidence: 99%

Board Characteristics and Firm Performance: A Conﬁgurational Analysis

et al. 2023

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“…It means that liquidity positively affects investment decisions in fixed assets. Research conducted by Sajid et al (2016), Hartono and Wahyuni (2005), and Rashid and Karim (2018) uncovered that liquidity positively affected investment decisions. However, Kalusová and Badura (2022) found that liquidity negatively influenced investment determination.…”

Section: H2: Solvency Negatively Affects Fixed-asset Investment Decis...mentioning

confidence: 99%

“…Companies with high liquidity can invest more in capital expenditures, fixed assets such as land or property, production machine, buildings, engine, and equipment. According to Hartono and Wahyuni (2005), and Rashid and Karim (2018), liquidity positively affected investment decisions, whereas research by Yunita and Yuniningsih (2020) found that liquidity had a negative effect on investment decisions.…”

Section: H2: Solvency Negatively Affects Fixed-asset Investment Decis...mentioning

confidence: 99%

Fundamental Factors of Financial Ratios and Discretionary Accruals in Influencing the Companies’ Fixed-Asset Investment Decisions

Rosa

Mukhibad

2022

JAI

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Research aims: This study aims to empirically prove the influence of profitability, solvency, liquidity, activity, dividend policy, and discretionary accruals on fixed-asset investment decisions.Design/Methodology/Approach: The researchers used consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2013 to 2019. Using the purposive sampling method, this study resulted in 163 bank-year observations. The data were then analyzed utilizing a fixed-effect model.Research findings: The results showed that profitability, liquidity, activity, and discretionary accruals positively affected fixed-asset investment. Meanwhile, the dividend policy negatively affected fixed-asset investment. This study strengthens the pecking order theory. In addition, the research sample used internal funds as a funding source for investment in fixed assets.Theoretical contribution/Originality: The variable added in the study distinguishing it from previous researchers is the discretionary accrual variable. Discretionary accruals have been proven to impact resource allocation, one of which is investment decisions. The additional discretionary accruals variable is expected to strengthen the influence of the consumer goods companies' fundamental factors on investment decisions in fixed assets.Practitioner/Policy implication: Investment in fixed assets in the consumer goods companies uses internal funds because these funds are low risk and support the company's sustainability.Research limitation/Implication: This study used dividend policy as one of the independent variables, and companies that did not distribute dividends could not be sampled.

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