How and When Do Firms Adjust Their Capital Structures Toward Targets?

Byoun, Soku

doi:10.2139/ssrn.651345

Cited by 100 publications

(240 citation statements)

References 34 publications

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“…In addition the standard errors are further manipulated in order to overcome the bias arising from fine sample errors [27]. Table 2 reports the results for estimation arising from equation (1). The table contains coefficients whilst standard errors are reported in parenthesis [20,28].…”

Section: Methodsmentioning

confidence: 99%

“…Further empirical prior also show that firms above target levels are quicker to adjust to target levels relative to firms below target levels due to the relatively costlier position [4,5,6] Our purpose of investigating the impact of intrinsic limitations on moment adjustment and distance reduction is well motivated by the literature [7,8,9]. Our study looks at the velocity of moment adjustment based on the intrinsic limitations of financial constraints which is a known intrinsic limitation to impact financial issuing decisions among managers [ 10, 11, 12, 13, 14, and 15].…”

Section: Review Of the Literature And Motivating The Studymentioning

confidence: 99%

“…The sample used is for UK firms. The empirical analysis differentiates firms which are above and under target [1]. Our paper introduces an intrinsic limitation which is financial constraints to the model.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Speed of Adjustment and Financial Constraints: Evidence from the UK

Hussain¹,

Shamsudin²,

Jabarullah³

et al. 2016

Indian Journal of Science and Technology

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Abstract. Our paper estimates the speed of moment adjustment based on the first difference of the lead (t+1) leverage levels (actual lead) and lag (t-1) leverage levels (actual lag) to the first difference of simulated lead (target) leverage levels and lag levels (actual lag leverage) for firm level data. We introduce an intrinsic limitation (financial constraints) to the model to test the impact on speed of adjustment and distance reduction. We find that financial constraints have a statistically and economically significant impact on rate of adjustment and distance reduction to target leverage levels.

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Section: Methodsmentioning

confidence: 99%

Section: Review Of the Literature And Motivating The Studymentioning

confidence: 99%

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Speed of Adjustment and Financial Constraints: Evidence from the UK

Hussain¹,

Shamsudin²,

Jabarullah³

et al. 2016

Indian Journal of Science and Technology

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“…And financial flexibility is the most important determinant of capital structure, flexibility can accordingly be obtained through a firm's capital structure policy (Graham & Harvey, 2001). By preserving access to low-cost sources of external capital, firms are able to achieve aflexible capital structure, which in turn preserves financial flexibility (Byoun, 2008).…”

Section: Regulation and Competition In Telecommunication Industriesmentioning

confidence: 99%

Financial Flexibility in Highly Regulated Market: Indonesian Telecommunication Case during Tariff Pricing War

Rijanto¹

2015

IRJBS

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In year 2008, regulation of Indonesian telecommunicationindustries changes due the tariff pricing war within Telecommunication operator. This regulation tie up the telecommunication operator and affect operating revenue margin.The needs of financial flexibility within telecommunication firm is increased.Capex, operating revenue and reinvestment needs to be flexible must be inline with competition and change of technology. This paper goals is measuring financial flexibility based on Capex, operating revenue and re-investment needs.Re-investment needs by Telecommunication operator can be financed with or without financial flexibility. Data from year 2007 up to 2014 is selected to accommodate before and after changes of telecommunication regulation. The regulation effect to financial flexibility of telecommunication firm is still relevantbecause telecommunication industries by nature needs larger capital to re-new the telecommunication technology. Real options method will be used to measure financial flexibility.

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“…Menurut Byoun (2008) fleksibilitas keuangan adalah tingkat kapasitas dan kecepatan perusahaan untuk dapat memobilisasi sumber daya keuangannya atau mengambil tindakan secara preventif, reaktif, dan eksploitatif agar dapat memaksimalkan nilai perusahaan. variable-variabel yang perlu diperhatikan agar fleksibilitas keuangan suatu perusahaan dapat terjaga ialah: arus kas, kemampuan untuk berhutang yang tidak terpakai, aset yang likuid, akan tetapi ada dua variabel lain yang tidak berhubungan dengan keuangan yaitu: organisasi dan lingkungan, hal ini disebabkan oleh dinamika perekonomian dunia yang semakin kompetitif, sehingga akan semakin banyak ketidakpastian.…”

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Faktor-Faktor yang Mempengaruhi Fleksibilitas Keuangan (Studi Kasus yada Perusahaan yang Terdaftar pada Bursa Efek Indonesia (Periode 2008-2012))

Murti

Achsani

Andati

2016

JAM

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This study aimed to determine the capital position and company's performance inAbstrak: Penelitian ini bertujuan untuk mengetahui posisi modal dan kinerja perusahaan di Indonesia selama periode 2008-2012, dan menentukan faktor-faktor yang mempengaruhi fleksibilitas keuangan di perusahaan Indonesia. Penelitian ini mengambil sampel dari 45 perusahaan dengan nilai kapitalisasi terbesar yang tercatat di Bursa Efek Jakarta. penelitian ini menggunakan synthetic rating dan rasio debt service coverage untuk menentukan posisi modal dan kinerja perusahaan, dan menggunakan data panel untuk menentukan faktor-faktor yang mempengaruhi fleksibilitas keuangan. hasil penelitian menunjukkan adanya penurunan default rate, pada tahun 2008 rata-rata default rate ialah 6,12%, pada tahun 2009 menurun menjadi 3,99%, tahun 2010 turun menjadi 2,91%, dan kemudian pada tahun 2011 dan 2012 sedikit meningkat menjadi 3,17% dan 3,30%. Berdasarkan hasil data panel faktor-faktor yang mempengaruhi fleksibilitas keuangan Leverage Ratio, Free Cash Flow, dan krisis.Kata Kunci: posisi modal dan kinerja perusahaan, fleksibilitas keuangan, synthetic rating, rasio debt service coverage, data panel Fleksibilitas keuangan merupakan salah satu tema yang menarik akhir-akhir ini. Hal ini terjadi karena adanya survey yang dilakukan oleh Graham dan Harvey (2001), dan mendapatkan hasil bahwa dari 392 cheif finanance officer (CFO) dari berbagai perusahaan di Amerika mengatakan bahwa fleksibilitas keuangan merupakan

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How and When Do Firms Adjust Their Capital Structures Toward Targets?

Cited by 100 publications

References 34 publications

Speed of Adjustment and Financial Constraints: Evidence from the UK

Speed of Adjustment and Financial Constraints: Evidence from the UK

Financial Flexibility in Highly Regulated Market: Indonesian Telecommunication Case during Tariff Pricing War

Faktor-Faktor yang Mempengaruhi Fleksibilitas Keuangan (Studi Kasus yada Perusahaan yang Terdaftar pada Bursa Efek Indonesia (Periode 2008-2012))

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