O efeito da diversificação corporativa na estrutura de capital das firmas brasileiras

Nicoli, Jandir; Funchal, Bruno

doi:10.1590/s1519-70772013000200006

Cited by 4 publications

(2 citation statements)

References 30 publications

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“…Therefore, the authors demonstrate that the firms need additional debts to finance their diversification strategies to maintain stable growth. Hence, it also supports the research conducted by Nicoli Junior & Funchal (2013) that there is a signified association between a diversification strategy and the cost of debt. Moreover, the authors explain that the firms' diversification strategies enhance their financial capacities.…”

Section: Discussion and Analysissupporting

confidence: 87%

Firm's cost of debt firstly changes conservatism and then leads the choices of future diversification strategies: Evidence from Asian countries

Sumiyana

Usmayanti

2022

J Corp Accounting Finance

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This study investigates how firms' debt cost affects their conservatism in the first stage, and then leads their future strategies in the second stage. Moreover, it shows that firms would likely ignore their conservatism when choosing a strategy, especially diversification. Then, it presents two interrelated novelties. First, firms operate with a low cost of debt, constructing their high conservatism.As a result, they would likely choose a cost-reduction strategy. Conversely, firms with low conservatism usually choose diversification strategies because they are at the lowest risk. Second, this study highlights that the firms' diversification strategies are a conundrum while considering the cost of debt and conservatism when applied by firms operating the business in developing countries. Operating in emerging economies, firms could choose a higher debt cost and simultaneously ignore conservatism, maintaining their creditors as funding.Moreover, this research examines Asian countries' data using ordinary leastsquare (OLS) and two-stage last-square (2-SLS). In addition, 2-SLS outperforms in the staged-associative examinations. Thus, this research reveals that the cost of debt, conservatism and chosen strategies relate to simple staging. As a result, they acquire the highest cost of debt, with the high-risk level affecting their weighted cost of capital. Finally, this research infers that firms' costs of debt and conservatism are not mutually exclusive and sequentially affect their future strategic choices. It, therefore, suggests that when firms choose diversification strategies, they might probably take a high cost of debt, accompanied by a highly conservative level.

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Section: Discussion and Analysissupporting

confidence: 87%

Firm's cost of debt firstly changes conservatism and then leads the choices of future diversification strategies: Evidence from Asian countries

Sumiyana

Usmayanti

2022

J Corp Accounting Finance

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“…It is worth noting that Itami and Roehl (1987) also considered intangible and tangible resources to be extremely important for making synergy effective. Moreover, intangible resources are the best in competition (and, therefore, increase the synergistic effect) (Junior & Funchai, 2013; Sindhu et al, 2014). Several authors also agreed with him, mentioning the role of “invisible” assets in the synergistic effect (Jensen, 1994; Karimi, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

Diversification and company sales efficiency: Synergy influence on business valuation

Wang,

Abdullayeva,

Hoang

2023

Manage Decis Econ

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The purpose is to show the main methods of calculation and analysis of various organizations' indicators to demonstrate, using a practical example, the synergistic effect's significance and role in the diversification and a rise in sales when making M&A (mergers and acquisitions) transactions. The methods applied are mathematical formulas and various empirical and statistical data from various literature sources. The study's findings underscore the importance of understanding the synergistic effect of M&A. The research results can be valuable for corporate executives, investors, and business consultants involved in M&A.

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The Effect of Corporate Diversification on Tax Aggressiveness in Brazilian Companies

Martinez

Rodrigues²

2019

SSRN Journal

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Objective: To verify whether firms that operate in several different business sectors are more tax aggressive in comparison to firms that operate in a single or a few segments. Method:The study analyzes a sample of firms listed in the Brazilian stock exchange B3 in the period from 2010 to 2017. To verify the existence of a relationship between diversification and tax aggressiveness, a data panel regression model with fixed effect of company and year was used and additionally the logit model. To measure tax aggressiveness, it was used ETR (effective rate of taxation) and ETR long (long-run effective tax rates). Originality/relevance: This type of research is unprecedented in Brazil, being a point not yet explored in the literature, in view of its peculiarities of a developing country. Relevant to define the effect of diversification on tax aggressiveness. Results: It was observed that the more companies are diversified, the lower the probability of having low tax aggressiveness, or that more diversified companies are more likely to be more aggressive, compared to companies with only one segment. Therefore, the results indicate that among companies with segments, the more segments, the more aggressive the company. Theoretical/Methodological contributions:A better understanding of the phenomenon of tax aggressiveness, causes and determinants, having implications for financial statement users, in particular tax regulators.

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O efeito da diversificação corporativa na estrutura de capital das firmas brasileiras

Cited by 4 publications

References 30 publications

Firm's cost of debt firstly changes conservatism and then leads the choices of future diversification strategies: Evidence from Asian countries

Firm's cost of debt firstly changes conservatism and then leads the choices of future diversification strategies: Evidence from Asian countries

Diversification and company sales efficiency: Synergy influence on business valuation

The Effect of Corporate Diversification on Tax Aggressiveness in Brazilian Companies

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