Factoring as a determinant of capital structure for large firms: Theoretical and empirical analysis

Bilgin, Rümeysa; Dinç, Yusuf

doi:10.1016/j.bir.2019.05.001

Cited by 33 publications

(51 citation statements)

References 30 publications

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“…In our analysis that investigates the impact of environmental performance on capital structure, we control for the effect of profitability (ROA), firm size (Size), Investment opportunities (INV), stock return volatility (SRV), tangible assets (Tang) and liquidity (Liq). These variables are selected based on the theoretical framework and previous literature that investigated the factors affecting the capital structure (Fama and French, 2002; Frank and Goyal, 2009; Öztekin, 2015; Bilgin and Dinc, 2019; Ahmed and Hla, 2019).…”

Section: Methodsmentioning

confidence: 99%

The impact of environmental performance on capital structure and firm performance: the case of Turkey

Kalash

2021

SBR

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Purpose The purpose of this study is to investigate the effect of environmental performance on the capital structure and financial performance of Turkish listed firms. Design/methodology/approach This study used data of 49 firms listed on Istanbul Stock Exchange during the period between 2014 and 2019, resulting in 205 firm-year observations. The environmental performance data were drawn from the carbon disclosure project Turkey climate change reports. Ordinary least squares and binary logistic regression models were used to examine whether environmental performance impacts the capital structure and financial performance. Findings The findings of this research revealed that environmental performance significantly positively affects the firm leverage. Findings also showed that environmental performance has a significantly positive impact on return on assets, operating profitability and return on equity, but no significant impact on stock returns. Practical implications Given the increased borrowing costs for Turkish firms after the 2018 currency crisis in Turkey, the findings of this study are very important as they enable managers of Turkish firms to make better decisions related to capital structure and to understand the role of environmental performance in reducing the cost of debt and enhancing financial performance. Originality/value To the author’s knowledge, this research is the first to investigate the effect of environmental performance on capital structure in the Turkish context, and is one of few that explained how environmental performance affects the financial performance of Turkish firms.

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Section: Methodsmentioning

confidence: 99%

The impact of environmental performance on capital structure and firm performance: the case of Turkey

Kalash

2021

SBR

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“…In contrast, tangible assets are sold in the event of bankruptcy to satisfy the demands of the creditors. Both theories of trade-off and pecking order suggest a positive effect on the leverage ratio of firm size and tangibility (Rumeysa and Yusuf, 2019).…”

Section: Tangibilitymentioning

confidence: 99%

Determinants of Capital Structure: An Empirical Evaluation of Oman’s Tourism Companies

Mohammadi

Dalwai

Najaf

et al. 2020

ijthr

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Purpose: The purpose of this research is to investigate the determinants of the capital structure of tourism companies in Oman. This study uses the trade-off theory and pecking order theory to postulate hypotheses related to determinants of capital structure. Methodology: In line with extant literature, size, liquidity, tangibility, growth opportunities, and risk are used as the determinants of the capital structure. The sample in this study includes nine listed tourism companies for the period 2007 to 2016, which aggregates to 90 firm-year observations. Main findings: The results show that the capital structure of tourism companies is influenced by size, growth, and risk. The trade-off theory and pecking order theory are useful for partially explaining the leverage decisions of Oman's tourism companies. Implications: The empirical findings of this research imply that tourism companies' corporate managers can make optimal capital structure decisions based on determinants. Novelty: To the best of the author's knowledge, this study is a first for examining the determinants of capital structure for Oman's tourism companies using data over ten years. It lends support to the determinants identified in prior literature for developed and developing countries.

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“…From the trade-off theory perspective, large companies are assumed to be more diversified and have relatively stable cash flows and higher levels of profitability. Large companies have higher credibility in the debt market so that the possibility of bankruptcy facing the company is lower (Bilgin & Dinc, 2019). Large companies tend to have a lower cost of debt than small companies so that companies tend to use more high levels of debt.…”

Section: Firm Size and Capital Structurementioning

confidence: 99%

Size, Growth, Profitability and Capital Structure

Giovanni

Utami

Widiyaningrum

2020

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Penelitian ini bertujuan untuk memberikan bukti empiris mengenai peran profitabilitas, ukuran perusahaan serta pertumbuhan perusahaan dalam menjelaskan variabilitas struktur modal. Pengambilan sampel penelitian menggunakan metode purposive sampling. Sampel penelitian yang memenuhi kriteria berjumlah 34 perusahaan sektor industri barang konsumsi yang terdaftar di Bursa Efek Indonesia periode 2015-2018. Variabel independen terdiri dari profitabilitas, ukuran perusahaan serta pertumbuhan perusahaan. Dalam penelitian ini, pengujian hipotesis dilakukan dengan menggunakan regresi linear yang diolah melalui software SPSS. Nilai koefisien determinasi sebesar 98,58% artinya variabilitas struktur modal dipengaruhi oleh variabel profitabilitas, ukuran perusahaan dan pertumbuhan perusahaan. Berdasarkan hasil analisis regresi linier dengan tingkat signifikansi 5%, hasil penelitian memberikan bukti bahwa terdapat hubungan negatif dan signifikan antara profitabilitas dengan struktur modal serta terdapat hubungan positif dan signifikam antara pertumbuhan perusahaan dengan struktur modal. Penelitian ini juga memberikan bukti bahwa ukuran perusahaan tidak memiliki peran sebagai determinan struktur modal. Kata kunci: pertumbuhan; profitabilitas; struktur modal; ukuran ABSTRACT. This study aims to provide empirical evidence regarding the role of profitability, firm size and firm growth in explaining the variability of capital structure. The research sample was taken using purposive sampling method. The research sample that met the criteria was 34 companies in the consumer goods industry which were listed on the Indonesia Stock Exchange for the 2015-2018 period. The independent variables consist of profitability, company size and company growth. In this study, hypothesis testing was carried out using linear regression processed through SPSS software. The coefficient of determination is 98.58%, meaning that the variability of the capital structure is influenced by the variables of profitability, company size and company growth. Based on the results of linear regression analysis with a significance level of 5%, the results provide evidence that there is a negative and significant relationship between profitability and capital structure and there is a positive and significant relationship between company growth and capital structure. This study also provides evidence that firm size has no role as a determinant of capital structure.

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Factoring as a determinant of capital structure for large firms: Theoretical and empirical analysis

Cited by 33 publications

References 30 publications

The impact of environmental performance on capital structure and firm performance: the case of Turkey

The impact of environmental performance on capital structure and firm performance: the case of Turkey

Determinants of Capital Structure: An Empirical Evaluation of Oman’s Tourism Companies

Size, Growth, Profitability and Capital Structure

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