Financial liberalization and firms’ capital structure adjustments evidence from Southeast Asia and South America

Ameer, Rashid

doi:10.1007/s12197-010-9158-3

Cited by 25 publications

(41 citation statements)

References 61 publications

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“…Morri andCristanziani (2009), ooi (1999), and Mallikarjunappa and Goveas (2007) show insignificant relationship between growth and leverage. However, empirical studies have mixed results of the growth and leverage, for example, Gwatidzo and Ramjee (2012), Ameer (2013) and Bayrakdaroglu et al (2013) find a positive relation between growth and leverage while abbad and zaluki (2012), Gurcharan (2010) and Antoniou et al (2008) show negative association between growth and leverage.…”

Section: Growthmentioning

confidence: 99%

The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

Pratheepan¹,

Banda²

2016

IJEF

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This research examines the determinants of capital structure of selected listed companies in Sri Lanka. The capital structure of 55 companies listed in Colombo Stock Exchange (CSE) is empirically examined using the fixed effects model. Based on the findings of the panel data analysis during the period of 2003-2012, Profitability exhibits statistically significant of inverse relationship with leverage while firm size and growth shows statistically significant of positive relationship with leverage for selected listed companies in Sri Lanka. Non-debt tax shields and tangibility indicate insignificant impacts on leverage. The results of this empirical study shows that there is robust evidence to support the pecking order theory by manufacturing based companies on the capital structure determinant of profitability variable, and growth variable also strongly supports to the association of the pecking order theory. Though, trade-off theory also can not be rejected because of the correct estimate of the positive sign of size variable of manufacturing based companies. Thus, implication of pecking order theory is more appropriate in Sri Lankan perspective.

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Section: Growthmentioning

confidence: 99%

The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

Pratheepan¹,

Banda²

2016

IJEF

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“…Hence, profitability is expected to affect debt financing negatively, indicating the support of the pecking order theory. Moosa and Li [24], Haron [25], Ameer [42], and De Jong et al [43] all share similar result of negative relationship between profitability and debt financing in their studies on Indonesian firms. Firm's profitability is represented by EBIT over total asset [25].…”

Section: Profitabilitymentioning

confidence: 70%

“…Larger firms should be less affected by information asymmetry problems as information regarding the firms is much easier to obtain and more accessible comparatively; thus, debt financing is easily accessible to them. Ameer [42] and De Jong et al [43] support this trade-off theory explanation on the relationship between firm size and debt financing. However, [25] depicts significant negative relationship between size and debt financing.…”

Section: Firm Sizementioning

confidence: 86%

“…Frank and Goyal [36] argue that NDTS should be negatively correlated with leverage as NDTS is the alternative to tax shields provided by debt financing. Significant negative relationship between NDTS and leverage is reported in [42] on Indonesian firms, supporting [36]. NDTS is represented by annual depreciation expenses to total asset [36].…”

Section: Non-debt Tax Shield (Ndts)mentioning

confidence: 93%

“…Therefore, debt financing should be avoided, indicating a negative relationship. Haron [25], Ameer [42], and De Jong et al [43] find business risk having a significant negative relationship with debt financing among firms in Indonesia. Firms with high degree of risk may prefer equity issuance to debt for business expansion and competencies.…”

Section: Business Riskmentioning

confidence: 99%

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Ownership and Debt Financing: Indonesia Evidence

Haron¹

2018

Financial Management From an Emerging Market Perspective

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This study examines whether ownership concentration influences debt financing of firms in Indonesia. Known to be dominated by family owned, firms in Indonesia seem to have certain distinctive characteristics that are evidenced to have significant impact on their debt financing. Apart from the common firm-level determinants, ownership concentration does play an important role in determining the level of debt consumption of the firms. It is revealed that ownership concentration impacts the debt financing positively, reflecting the power and authority of the large controlling shareholders in using debt as controlling mechanism on the entrenched managers. The positive relationship may also be explained by the reluctance of large shareholders to engage with equity financing as to avoid ownership dilution and thus can maintain the control of the firms. In terms of ownership identity, however, family firms in Indonesia seem to consume much lesser debt level due to the alignment of interest between shareholders and managers, which makes issuing debts as manager's disciplinary tool less crucial for family-owned firms. This study contributes to the literature by offering insights on how ownership concentration and family-owned firms decide on their capital structure and how certain distinctive characteristics of the firms influence the financing decision.

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Firm characteristics, corporate governance and capital structure adjustments: A comparative study of listed firms in Sri Lanka and India

Buvanendra

Sridharan

Thiyagarajan

2017

IIMB Management Review

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Financial liberalization and firms’ capital structure adjustments evidence from Southeast Asia and South America

Cited by 25 publications

References 61 publications

The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

The Determinants of Capital Structure: Evidence from Selected Listed Companies in Sri Lanka

Ownership and Debt Financing: Indonesia Evidence

Firm characteristics, corporate governance and capital structure adjustments: A comparative study of listed firms in Sri Lanka and India

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