Firm Size and Financial Performance: Intermediate Effects of Indebtedness

López-Valeiras, Ernesto; Gómez-Conde, Jacobo; Fernandez-Rodriguez, Teresa

doi:10.1002/agr.21458

Cited by 28 publications

(20 citation statements)

References 60 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The ratio of total debt to total assets (LEVERAGE) has a strong negative impact on both ROA and ROS (Table 4). Additional monitoring provided by the debt issuers might be a substitute for poor corporate governance, which in turn might positively impact firm performance (Lopez-Valeiras et al, 2016). On the other hand, González (2013) suggests that if the cost of debt is too high, it might outweigh the positive effects of any additional monitoring by debt issuers, therefore having an overall negative impact on performance.…”

Section: Resultsmentioning

confidence: 99%

Corporate governance and firm performance within the Russian agri-food sector: does ownership structure matter?

Tleubayev

Bobojonov

Gagalyuk

et al. 2021

IFAM

View full text Add to dashboard Cite

This article provides pioneering empirical evidence on the ownership structure and firm performance relationship for the case of corporate agri-food companies in Russia. While Russia plays a vital role in the global agri-food system, its domestic agri-food production is evidently dominated by a small number of corporate enterprises, which are in turn characterized by high ownership concentration. We employ unique panel data obtained from 203 companies for the years between 2012 and 2017. A random effects model was used to analyze the impacts of ownership concentration and ownership identity on the firms’ financial performance, measured by return on assets and return on sales. Our results indicate an inverse U-shaped association between ownership concentration and firm performance, with average level of ownership concentration found to be on the descending range of the inverse U-shaped curve. Moreover, we observe a similar quadratic relationship between ownership concentration by government and directors and firm performance. On average, ownership by directors was found to be on the ascending range and below the peak point, suggesting a potential for further performance improvement, while the impact of agroholding ownership was found to be linear and positive.

show abstract

Section: Resultsmentioning

confidence: 99%

Corporate governance and firm performance within the Russian agri-food sector: does ownership structure matter?

Tleubayev

Bobojonov

Gagalyuk

et al. 2021

IFAM

View full text Add to dashboard Cite

show abstract

“…There is a positive significant relationship between size and profitability (Liargovas and Skandalis, 2008;Akhavein et al, 1997;Smirlock, 1985). More recently, Lopez-Valeiras et al (2016) revealed that the relationship between size and financial performance is negatively mediated by indebtedness.…”

Section: Firm Characteristicsmentioning

confidence: 99%

Macroeconomic factors, firm characteristics and financial performance

Egbunike

Okerekeoti²

2018

AJAR

132

View full text Add to dashboard Cite

Purpose-The purpose of this paper is to explore the interrelationship between macroeconomic factors, firm characteristics and financial performance of quoted manufacturing firms in Nigeria. Specifically, the study investigates the effect of interest rate, inflation rate, exchange rate and the gross domestic product (GDP) growth rate, while the firm characteristics were size, leverage and liquidity. The dependent variable financial performance is measured as return on assets (ROA). Design/methodology/approach-The study used the ex post facto research design. The population comprised all quoted manufacturing firms on the Nigerian Stock Exchange. The sample was restricted to companies in the consumer goods sector, selected using non-probability sampling method. The study used multiple linear regression as the method of validating the hypotheses. Findings-The study finds no significant effect for interest rate and exchange rate, but a significant effect for inflation rate and GDP growth rate on ROA. Second, the firm characteristics showed that firm size, leverage and liquidity were significant. Practical implications-The study has implications for regulators and policy makers in formulating policy decisions. In addition, managers may better understand the interplay between macroeconomic factors, firm characteristics and profitability of firms. Originality/value-Few studies have addressed the interplay of macroeconomic factors and firm characteristics in determining the profitability of manufacturing firms in the country and developing countries in general.

show abstract

“…Therefore, firm size influences the ability to raise external funds, thus affecting the companies' debt ratio. A more indebted company may have its competitiveness limited by the ability to make decisions, while greater financial capacity allows greater flexibility in adapting to the product and technological changes, leading to a better adaptation to consumer demand [36]. Thus, studies show that large companies can obtain higher levels of return on assets [37][38][39], higher levels of return on equity or invested capital, higher profit margins or higher returns on sales [40].…”

Section: Firm Size and Corporate Financial Performancementioning

confidence: 99%

“…For example, the financial performance measured as ROA shows both positive and negative effects [37,39]. This lack of conclusive evidence indicates that the effect of size on performance can result from variable moderators, such as productivity [36,44], or control variables such as company age [45,46]. Another explanation for divergent results may come from the different methods applied.…”

Section: Firm Size and Corporate Financial Performancementioning

confidence: 99%

The Impact of Size on the Performance of Transnational Corporations Operating in the Textile Industry in Portugal during the COVID-19 Pandemic

Santos

Castanho

2022

Sustainability

View full text Add to dashboard Cite

The aim of this work is to understand the impact of size on the performance of transnational corporations (TNCs) operating in the textile and clothing industry in Portugal during the COVID-19 pandemic. For this purpose, we used ORBIS data for the period 2019–2020 and narrative, financial and correlation analyses to assess the performance of five companies. Thus far, the impact of company size on the competitiveness of Portuguese textile affiliates during the pandemic has remained unexplored. The results show that smaller firms performed better than larger ones, likely due to the higher fixed costs of the latter at times when orders declined worldwide. Our analysis suggests that there are some characteristics of TNCs that matter in explaining company-level performance during crises, such as management experience and flexibility. Furthermore, as Portugal is a major European textile exporter, it is useful for the host country to assess the economic sustainability of its foreign investors. The results provide some policy recommendations regarding the promotion of foreign direct investment (FDI) in Portugal.

show abstract

Firm Size and Financial Performance: Intermediate Effects of Indebtedness

Cited by 28 publications

References 60 publications

Corporate governance and firm performance within the Russian agri-food sector: does ownership structure matter?

Corporate governance and firm performance within the Russian agri-food sector: does ownership structure matter?

Macroeconomic factors, firm characteristics and financial performance

The Impact of Size on the Performance of Transnational Corporations Operating in the Textile Industry in Portugal during the COVID-19 Pandemic

Contact Info

Product

Resources

About