Impacts of sustainable structural growth on the economic performance of listed companies

Abstract

The purpose of the present publication is to measure the impacts of structural growth on the economic sustainability of listed companies. Scientific literature overview, secondary data analysis and semi-structured qualitative interviews were combined in order to examine the effects of structural growth. The research question is how structural changes of listed companies affect their sustainable growth. Scrutinizing various cases makes it possible to tackle the patterns of sustainable structural growth, based on a type of structural change. Many researchers (such as Huang and Kleiner 2004; Deal and Kennedy 1982 or Pritchett and Gilbreath 1996 and etc.) and business analysts (such as KPMG consulting company 1999) have not found a common answer what are the key success factors of structural growth. It is related to strategic targets, due diligence activities, expenses (the transactional decisionmaking phase) or integration planning, the organizational culture, assimilation or dissimilation (the integration phase). Franks and Harris (1989) emphasize the increase in shareholders' value as the main motive for structural changes. Boucher (1980) argues that the two most common reasons of structural changes are either attempts of taking opportunities present in the market, or increasing the growth. The present research, which combines the analysis of secondary data and semi-structured qualitative interviews, aims to verify various researchers' statements. Based on the scientific literature analysis, two conceptual models are designed and verified. This should serve as the background for the further examination of the role of structural changes on a sustainable companies' growth and new publications in the same series.

Companies’ Internal Factors and Stock Liquidity: Evidence from the Baltic Markets

“…Chordia et al analysed the relationship between the size of a company, the stock price volatility and stock liquidity and concluded that under other conditions being un-changed, the liquidity of smaller companies is more correlative with stock price movements than that of larger companies. The positive relationship between the size of a company and its stock liquidity was also confirmed by other scientists [14], [15], [17].…”

“…The increased leverage creates increased information asymmetries and thus increases the costs of stock trade, which results in decreasing liquidity of a stock. The research results of Khediri and Daadaa evidenced that the stock trading activity of companies with higher leverage is low [17]. Meanwhile, other scientists conducted a research and found that the increasing company's leverage increases its stock liquidity, as the debt encourages managers of a company make better investment decisions, at the same time reducing costs of agency between managers and investors and increasing the stock liquidity as a result [11].…”

“…The importance of ownership structure to the stock liquidity is emphasized in studies of some scientists [3], [6]. The impact of the size of a company on the stock liquidity is evidenced by the research results of other scientists [8], [14], [15], [17]. Chordia et al analysed the relationship between the size of a company, the stock price volatility and stock liquidity and concluded that under other conditions being un-changed, the liquidity of smaller companies is more correlative with stock price movements than that of larger companies.…”

Overconfidence, risk aversion and individual financial decisions in experimental asset markets

“…Evidence presented in this paper could be of benefit to policy-makers: our results indicate that psychological bias of overconfidence could be harming investors' wealth, which in turn can have negative macroeconomic consequences and harm sustainable economic development (Dubauskas, 2016;Kulišauskas & Galinienė, 2015;Laužikas & Krasauskas, 2013;Peker, Tvaronavičienė, & Aktan, 2014;Stasytytė, 2015;Tvaronavičienė, 2014). Therefore, we suggest that governments should invest in increasing individual financial literacy, which will help to mitigate the impact of overconfidence on investment decisions and to achieve sustainable management of individual finances (Ciemleja, Lace, & Titko, 2014;Dubauskas, 2016;Kalyugina, Strielkowski, Ushvitsky, & Astachova, 2015;Njaramba, Chigeza, & Whitehouse, 2015).…”

Foreign Direct Investment: Driving Factors and Outcomes for Secure and Sustainable Development

“…Hence, we suggest a comparatively new question, which should be investigated and answered: what causes FDI outflow and what impact such outflow has for secure and sustainable development on foreign capital recipient country (e.g. increase of indebtedness (Baikovs, Zariņš 2013); need for subsidies (Giriūnienė 2013); unsustainability of some industrial sectors (Laužikas, Krasauskas 2013;Tvaronavičienė 2014); enhanced need for new strategies (Laužikas, Mokšeckienė 2013;Laužikas, Krasauskas 2013;Wahl, Prause 2013; De Alencar, Almeida 2013).…”