The Impact of the Financial Crisis on Corporate Capital Structure Dynamics in the Nordic Countries

Uskumbayeva, Assel

doi:10.15604/ejef.2018.06.03.003

Cited by 6 publications

(3 citation statements)

References 65 publications

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“…It is alleged that the structural form of poverty is deeply rooted in the socio-economic-political and cultural institutions of the country. It is further alleged that structural poverty is experienced over a long term period and often moves from one generation to another (Hundal et al 2018). A typical example of structural poverty in Zimbabwe is provided by most of the rural households and individuals with limited access to productive capital, productive land as well as other useful resources (Zimbabwe Ministry of Finance, 2016).…”

Section: Introductionmentioning

confidence: 99%

Financial Inclusion and Poverty Alleviation Among Smallholder Farmers in Zimbabwe

Mhlanga¹,

Dunga²,

Moloi³

2020

EJEF

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The study sought to investigate the impact of financial inclusion on poverty reduction in Zimbabwe among the smallholder farmers. It is alleged that financial inclusion can help in achieving seven of the seventeen sustainable development goals (SDGs), which include poverty eradication in all its forms everywhere, ending hunger, achieving food security, ensuring improved nutrition as well as promoting sustainable agriculture and many others. Using the simple regression method, the study discovered that financial inclusion has a strong impact on poverty reduction among smallholder farmers. The study went on to discover that, for the government to tackle poverty especially among the smallholder farmers, it is important to ensure that farmers do participate in the financial sector through saving, borrowing and taking out insurance among other services. So, it is important for the government of Zimbabwe to fully implement policies that encourage financial inclusion such as making sure that farmers find it easy to access financial institutions and encouraging financial institutions to review transaction costs like bank account opening charges periodically, implementing financial education programs among the farmers because these variables are important in influencing farmers to participate or preventing them from using financial services.

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Section: Introductionmentioning

confidence: 99%

Financial Inclusion and Poverty Alleviation Among Smallholder Farmers in Zimbabwe

Mhlanga¹,

Dunga²,

Moloi³

2020

EJEF

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“…The trade-off theory explains that the burden of corporate tax does not fall on the debt servicing and as a result the firms can avail more interest tax shield by exposing less profit before tax to the corporate tax burden after paying higher level of finance costs to the debtholders by increasing relative share of debt in the firm financing (Kraus and Litzenberger 1976). However, the changing level of debt not only affect the firm value but also profitability and risk exposure of the firm, consequently it is possible that the benefits of debt (leverage) are outweighed by the falling profits, risk firm risk exposure, adverse investors reaction and personal income tax rate, among other things (Hundal, Sandstrom and Uskumbayeva 2018;Salim and Yadav 2012). Since the abovementioned effects of leverage are not uniform, therefore, it is utmost important to ascertain the impact of capital structure on the various measures of firm performance and firm risk exposure to make the financial planning of the firm seamless.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Capital Structure on Firm Performance and Risk in Finland

Hundal

Eskola

Lyulyu

2020

Eurasian Studies in Business and Economics

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The decision pertaining of the capital structure is one of the most strategic, perpetual and at the same time challenging corporate decisions. Having an optimum capital structure is an important aspect of the financing of firms. Firms often struggle to create an optimum balance between their debt and equity. The current paper aims to explore whether the capital structure impacts the performance (financial and non-financial) and the financial risks of the firms in Finland. The current study is based on the secondary data of 50 large-cap Finnish public firms listed at the Helsinki stock exchange for the period 2011 to 2017. The findings of the research disclose that leverage affects most of the accounting, market, and hybrid performance measures negatively. On the other hand, the effect of leverage on the non-financial measures has been found to be insignificant. Similarly, a high level of leverage leads to increase in the total risk, while the systematic risk remains unaffected by it. The current article is one of the fewest studies that employed comprehensive analysis through multiple measures of firm performance, risk and capital structure in the context of the Finnish corporate sector.

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“…Firms have an optimal capital structure for long-term debt referred to as target debt to equity ratio. In order to finance growth and operations a firm can use both its own capital and borrowed capital (Hundal et al 2018). Optimal capital structure implies firms adjust from current debt-equity ratio to desired optimal level which minimizes costs (Ozkan, 2001).…”

Section: Introductionmentioning

confidence: 99%

Trade Credit Policy: Revisiting Targeting of Trade Payables and Receivables in Brics Listed Firms

Mugova¹,

Kwenda²

2020

EJEF

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The study investigates if firms in BRICS countries pursue a target optimal level of trade credit policy. Trade payables levels may not always at the desired levels and firms take time to adjust from real to target levels. The level of financial sector development may influence firms’ speed and cost adjustment. Employing a dynamic panel data model estimated with the difference and system Generalized Method of Moments estimation techniques on a panel of 3353 listed BRICS non-financial firms, the study established that in pursuit of growth opportunities firms have a deliberate trade credit target levels. Firms pursue a target optimal level of trade payables and trade receivables and firm size affects creditworthiness and access to capital markets, which influences speed of adjustment from current to desired levels of trade payables. Investment in trade receivables require access to capital for additional funding and poorly developed financial sectors makes it costly to adjust towards optimal credit level. Different levels of financial sector development affect access to alternative sources capital which influences optimal trade credit policy.

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The Impact of the Financial Crisis on Corporate Capital Structure Dynamics in the Nordic Countries

Cited by 6 publications

References 65 publications

Financial Inclusion and Poverty Alleviation Among Smallholder Farmers in Zimbabwe

Financial Inclusion and Poverty Alleviation Among Smallholder Farmers in Zimbabwe

The Impact of Capital Structure on Firm Performance and Risk in Finland

Trade Credit Policy: Revisiting Targeting of Trade Payables and Receivables in Brics Listed Firms

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