Unobservable Effects and Speed of Adjustment to Target Capital Structure

Matemilola, Bolaji Tunde; Noordin, Bany Ariffin Amin; Ngah, Wan Azman Saini Wan; Nassir, Annuar

doi:10.33736/ijbs.580.2015

Cited by 5 publications

(6 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Additionally, the cluster also highlights the impact of qualitative variables on SoA. Matemilola et al (2015) found that the unobservable, qualitative variable like "managerial ability" is capable of explaining the digression of firms from its target capital structure. Backing this finding, Chua et al (2020) found that the Chief Executive Officer's (CEO) Capital structure adjustment education and experience are SoA's potential determinants.…”

Section: Capital Structure Adjustmentmentioning

confidence: 94%

What we know and what we should know about speed of capital structure adjustment: a retrospective using bibliometric and system thinking approach

Hegde

Venkateshwarlu

Panda

et al. 2022

QRFM

View full text Add to dashboard Cite

Purpose This paper aims to conduct bibliometric analysis on the studies dealing with capital structure’s speed of adjustment (SoA) and identify the prominent themes while suggesting future research directions in the area. The existing reviews broadly focus on the capital structure, which provides the scope for conducting a review on this sub-aspect of capital structure. Design/methodology/approach This study uses a three-stage process to conduct this review: identification of academic journals, selection and analysis of target papers. This study uses a combination of bibliometric tools and a system thinking approach to assess the current status of publications and emerging themes within the literature. Findings This study has found a progressive evolution of SoA in capital structure research from 1984 to 2021. Studies largely focus on implementing the dynamic models to analyse the impact of adjustment costs, dynamic economic conditions, corporate governance practices and other variables on the firms’ adjustment speed and financial decisions. The network analysis of citations, keywords and clusters gives further knowledge on the intellectual structure of the data. Research limitations/implications This study is highly dependent on the papers available within the SCOPUS database. Studies not included herein are not part of this analysis, which may or may not bear an effect on the study’s findings. Originality/value To the best of the authors’ knowledge, the application of systems engineering concept of “system thinking approach” to identify literature gap and suggest directions for forthcoming research is the first of its kind, thus adding a novel and multidisciplinary aspect to this study.

show abstract

Section: Capital Structure Adjustmentmentioning

confidence: 94%

What we know and what we should know about speed of capital structure adjustment: a retrospective using bibliometric and system thinking approach

Hegde

Venkateshwarlu

Panda

et al. 2022

QRFM

View full text Add to dashboard Cite

show abstract

“…Second, this does not enable researchers to identify the direction and magnitude of the association of selected factors with the capital structure in the long term. Third, the lagged debt ratio, as one of the explanatory variables, describes not only the long-term association of the identified factors associated with the capital structure, but also a significant part of the unobserved variables such as managerial ability [Ang, Cole, Lawson, 2010;Matemilola et al, 2015].…”

Section: Long-term Capital Structure Analysismentioning

confidence: 99%

Factors Associated with the Capital Structure of Polish Companies in the Long and Short Term

Szomko¹

2020

GNPJE

View full text Add to dashboard Cite

The aim of this article is to assess the long-term and short-term association between selected factors and the capital structure of Polish companies. In light of tradeoff theory and pecking order theory, the main factors associated with the capital structure of firms are identified. Subsequently, a set of factors associated with debt ratios is analysed on the basis of previous empirical studies. Due to the properties of data describing the capital structure, it is argued that Between and Within fixed-effects estimators can be used to assess the long-and short-term association of selected factors with the debt ratios of Polish companies. In both the long and short run, the capital structure of Polish companies is associated with profitability, the tangibility of assets, the non-debt tax shield, the tax rate, business risk, and liquidity. Growth opportunities, dividend payments, capital expenditures, and the financial deficit are only associated with debt ratios in the long term. In the short term, size and the industry median debt ratio play a significant role. The results of the study indicate that the direction and magnitude of the association of the studied factors with the debt ratios of Polish listed companies may differ between the long and short term.

show abstract

“…As a result, the efficiency of the estimated parameters can be improved. System GMM able to controls for the unobserved country specific effects by differentiating the model to exclude any country specific effects or time-invariant country specific variable (Matemilola et al, 2015). However, the efficiency of system GMM Voice and accountability (VA) Ability of citizens to select government and freedom for expression, association and free media.…”

Section: P P P P P + + +mentioning

confidence: 99%

Impacts of Macroeconomic Environment and Governance Quality on the Stock Market

2020

JEM

View full text Add to dashboard Cite

This study examines the relationship between governance quality and stock market performance using the annual data from 2008 to 2016 for fourteen developing countries. This study used four different indicators, namely stock market return, stock market volatility, stock market development, and stock market liquidity to reflect the stock market's performance from various aspects. The study further combined the four indicators and formed a new proxy to reflect overall stock market performance by using principal component analysis. The two-step system of GMM estimation was used to test the impact of the macroeconomic environment and governance quality on stock market performance. Specifically, the results obtained show that banking sector development and governance quality have a significant negative relationship with stock market volatility. Meanwhile, the income level has a significant negative relationship with stock market volatility, development, and liquidity. These results suggest that developing countries should strengthen the position of the banking sector and allows the funds to be channeled into the stock market efficiently. Besides that, developing countries also need to improve their governance quality to attract foreign investors. Several policies shall be implemented by the developing countries to improve governance quality in the aspects of voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption.

show abstract

Unobservable Effects and Speed of Adjustment to Target Capital Structure

Cited by 5 publications

References 15 publications

What we know and what we should know about speed of capital structure adjustment: a retrospective using bibliometric and system thinking approach

What we know and what we should know about speed of capital structure adjustment: a retrospective using bibliometric and system thinking approach

Factors Associated with the Capital Structure of Polish Companies in the Long and Short Term

Impacts of Macroeconomic Environment and Governance Quality on the Stock Market

Contact Info

Product

Resources

About