Firm growth type and capital structure persistence

Wu, Xueping; Yeung, Chau Kin Au

doi:10.1016/j.jbankfin.2012.08.008

Cited by 59 publications

(18 citation statements)

References 45 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Firm growth was evaluated by not only one indicator, but also, following a literature review, sales (Monte and Papagni, 2003;Billett et al, 2007;Bottazzi et al, 2009;Coad and Rao, 2010;Mudambi and Swift, 2011;Demirel and Mazzucato, 2012;García-Manjón and Romero-Merino, 2012;Nunes et al, 2012;Wu and Yeung, 2012;Delmar et al, 2013;Lee, 2014), operating income (Monte and Papagni, 2003;Coad and Rao, 2010), and R&D (Billett et al, 2007;Coad and Rao, 2010). In addition, marketing expenditures were included in terms of the impact on sales.…”

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

The Effect of Firm Growth on Brand Value: Evidence from Brand Finance Turkey-100

Gerekan¹,

Pehlivan²,

Koçan³

2019

Asian Economic and Financial Review

View full text Add to dashboard Cite

A variety of groups are increasingly using brand value for different purposes; thus, a range of consultancy firms calculate, by different methods, and publish brand values annually. The effect of many variables on brand value has been examined previously, but few studies have explored the relationship between brand value and firm growth. This study aims to bridge this gap in the literature, since this relationship is important to maximizing brand value. The research was based on the companies listed in Brand Finance Turkey-100 between 2012 and 2018. Sales, operating income, R&D, and marketing, selling, and distribution (MSD) expenditures were adopted as firm growth indicators, which revealed that: increasing operating income and MSD caused a significant increase in brand value, whereas increasing R&D reduced brand value; and there was no significant relationship between increased sales and brand value. Contribution/Originality: While most studies have examined the many variables that affect brand value, few have explored the relationship between brand value and firm growth. This study contributes to the existing literature by bridging this gap, therefore. Furthermore, the results from this study provide guidance on which growth indicators companies should use to increase their brand value.

show abstract

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

The Effect of Firm Growth on Brand Value: Evidence from Brand Finance Turkey-100

Gerekan¹,

Pehlivan²,

Koçan³

2019

Asian Economic and Financial Review

View full text Add to dashboard Cite

show abstract

“…Numerous empirical papers have found the major firm-specific factors influencing the leverage of the firm. In this study, we just focus on several major firm-specific factors: (1) target leverage (Huang & Ritter, 2009;Faulkender et al, 2012;Chauhan & Huseynov, 2018); (2) growth opportunity (Wu & Yeung, 2012;Li & Mauer, 2016); (3) size (Bharath, Pasquariello, & Wu, 2009;Frank & Goyal, 2009;Graham & Leary, 2011); (4) profitability (Danis, Rettl, & Whited, 2014;Frank & Goyal, 2015); (5) volatility earnings (Kale, Noe, & Ramirez, 1991;Graham & Leary, 2011;); and (6) median industry leverage (de Jong, Kabir, & Nguyen, 2008;Frank & Goyal, 2009).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…Meanwhile, Wu & Yeung (2012) propose a nonlinear relationship between growth opportunities and leverage. They identify two types of asymmetric information, asset-in-place and growth opportunities.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Non-Linear Impact of Growth Opportunity and Firm Size on the Capital Structure

Suk

Juliana

Ekaputra

2018

Jurnal Keuangan Dan Perbankan

View full text Add to dashboard Cite

One of the focuses in capital structure studies is to identify economic forces influencing corporate capital structure. We investigated the non-linear effects of the firmspecific factors to the leverage of the firm of the US-listed firms. In the partial-adjusted model, growth opportunity and the size of the firm had non-linear effects on the leverage of the firm. Growth opportunity showed quadratic effects on leverage with a negative linear term but a positive quadratic term. It meant if the growth opportunity of a firm reached a certain level, fund providers can relatively detect it and subsequently causes a decrease in asymmetric information. This detection of ample growth opportunity will increase the accessibility of external funding. Firm size also exhibits quadratic effects on leverage with a positive linear term but a negative quadratic term. In other words, if the firm size as a proxy of various omitted variables was imminent, the financial market has been applied diversification discount that will decrease the accessibility of external funding.

show abstract

“…In fact, the literature on capital structure documents that leverage does display a high degree of persistence and appears to be relatively stable over time, and firm characteristics play a prominent role in this. For instance, Wu and Au Yeung (2012) show that the firm growth type, identified by a two-way independent sort on a firm"s initial market-to-book ratio and asset tangibility, is the persistent factor that has long-run explanatory power for capital structure persistence. 8 It should be noted that estimating a large firm-level dataset using GMM methodology may have weak rejection power.…”

Section: Accepted Manuscriptmentioning

confidence: 99%

Growth options effect on leverage: Evidence from China

Lin

2015

Pacific-Basin Finance Journal

View full text Add to dashboard Cite

Firm growth type and capital structure persistence

Cited by 59 publications

References 45 publications

The Effect of Firm Growth on Brand Value: Evidence from Brand Finance Turkey-100

The Effect of Firm Growth on Brand Value: Evidence from Brand Finance Turkey-100

Non-Linear Impact of Growth Opportunity and Firm Size on the Capital Structure

Growth options effect on leverage: Evidence from China

Contact Info

Product

Resources

About