Search results for "Capital structure"
showing 10 items of 27 documents
Beyond the Law and Finance Approach: The Shareholders' Cognitive Role and Its Effects on the Analysis of Ownership Structure and Corporate Governance
2004
The dominant law and finance approach of ownership structure and corporate governance is based on an unrealistic assumption, that of a total complete separation between ownership and control, in particular in the European nations. This approach based on the seminal Berle and Means' analysis and on agency theory, postulates that shareholders carry only a financial function limited to equity financing and assumption of financial risk. In view of the actual ownership structures, this approach has a weak explanatory power. Therefore, this article proposes another model, based on the cognitive role - directing and contribution of competences -, that the main shareholders often keep. It is possib…
Pecking Order Versus Trade-off: An Empirical Approach to the Small and Medium Enterprise Capital Structure
2003
In this paper, we explore two of the most relevant theories that explain financial policy in small and medium enterprises (SMEs): pecking order theory and trade-off theory. Panel data methodology is used to test the empirical hypotheses over a sample of 6482 Spanish SMEs during the five-year period 1994?1998. The results suggest that both theoretical approaches contribute to explain capital structure in SMEs. However, while we find evidence that SMEs attempt to achieve a target or optimum leverage (trade-off model), there is less support for the view that SMEs adjust their leverage level to their financing requirements (pecking order model). En este trabajo, exploramos dos de las teorías má…
Capital Structure and Sensitivity in SME Definition: A Panel Data Investigation
2003
We provide an empirical examination of the pecking order theory on capital structure in the field of Small and Medium Enterprises (SMEs). We mainly investigate if the results are sensitive to different definitions commonly used for these types of companies. Our evidence offers strong support for the growth opportunities and cash flow hypotheses. Firms that have many growth opportunities and small cash flows clearly show more debt in their capital structure. Moreover, results do not change when different SME definitions or sample sizes are used.
Capital Structure and Financial Control: The Effect of Leverage on Project Management
2015
Amplification characteristics are leveraging financial system which has a small risk of capability. However, the efficiency of this ability is the two-ways result and will also pose a lot of risks. Therefore, taking positive measures to strengthen the management of the financial system leverage feature in project management becomes very important. This paper describes the financial system leverage to bring the main problem through the lever amplification (nature) analysis of the characteristics, bi-amplified comparative analysis of profit and loss and bi-amplification characteristics of the risk analysis. Based on the above analysis, we put forward countermeasures about the management of le…
Intellectual Property and Leverage: The Role of Patent Portfolios
2019
This paper analyses the importance of intellectual property in determining capital structure decisions. We argue that firms can use their patent stock as collateral and thereby relax possible debt financing restrictions. Using data from the European Patent Office and balance sheet data of European companies, we find that larger and more valuable patent stocks lead to higher debt-ratios - controlling for well-established capital structure determinants. We further assess variation across as well as within industries and show that effects are mainly driven by tech-oriented and research intensive firms. Drawing on a legislative change in EU- law, allows us to establish a causal relationship bet…
The Underpricing of Spanish REITs When Going Public
2019
This study analyses underpricing in a sample of 41 Real Estate Investment Trusts (REITs) from the Spanish market between November 2013 and January 2019. The results show a significant underpricing on the initial-day (either when we compute raw or market-adjusted initial returns) concentrated in the primary market. Besides, price adjustment continues until the third day as we find significant raw and market-adjusted buy-and-hold returns. This underpricing is not accounted for by the theories of information asymmetry but instead by some signalling theories related to capital structure, by the pre-listing stock market conditions and by the peculiarities of the market analysed.
New Challenges of Economic and Business Development – 2012 : Conference Proceedings (May 10 - 12, 2012, Riga, University of Latvia)
2012
Support for Conference Proceedings by ERAF Project "Support for the international cooperation projects and other international cooperation activities in research and technology at the University of Latvia" No. 2010/0202/2DP/2.1.1.2.0/10/APIA/VIAA/013
Female directors, capital structure, and financial distress
2021
Abstract The composition of the board of directors is highly relevant to a firm’s capital structure and likelihood of financial distress. This study builds on the complementary proposals of agency theory and gender theories based on gender-differential behavior. We examine whether the gender diversity of the board affects firms’ capital structure (leverage, cost of debt, and debt maturity) and likelihood of bankruptcy. For a sample of European firms over the period 2002 to 2019, we find that the percentage of women directors is the most influential board characteristic in terms of capital structure decisions. This characteristic is negatively related to leverage, cost of debt, and debt matu…