Investment Management and Financial Innovations最新文献_第5页

Corporate governance and cash holdings: Focusing on a corporate governance report in Korea 公司治理与现金持有：聚焦韩国的公司治理报告

Investment Management and Financial Innovations Pub Date : 2024-02-14 DOI: 10.21511/imfi.21(1).2024.16

Kevin Troy Chua, Hansol Lee

{"title":"Corporate governance and cash holdings: Focusing on a corporate governance report in Korea","authors":"Kevin Troy Chua, Hansol Lee","doi":"10.21511/imfi.21(1).2024.16","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.16","url":null,"abstract":"This study examines the effect of corporate governance on a company’s cash holdings, focusing on a firm’s compliance levels with core corporate governance indicators as outlined in the corporate governance report. Utilizing a random effect generalized least squares (GLS) regression model, this study evaluates 812 firm-year observations from Korean publicly traded companies covering the period 2018 to 2021. The results indicate that companies with robust governance structures generally maintain lower levels of cash holdings (coefficient = –0.0263, p-value = 0.044), corroborating the flexibility hypothesis. Moreover, higher compliance levels with governance matters concerning shareholder protection (coefficient = –0.0388, p-value = 0.090) and board of directors (coefficient = –0.0512, p-value = 0.052) are associated with reduced cash holdings. Further analysis, accounting for a firm’s organizational capital, underscores that the inverse relationship between corporate governance and cash holdings is more pronounced in organizations with lesser organizational capital (coefficient = –0.0548, p-value < 0.01). This study contributes empirical evidence showing that strict compliance with core corporate governance indicators, indicative of strong corporate governance, substantially affects a firm’s cash management. Additionally, this study offers valuable insights for regulatory authorities and investors and enhances the existing body of knowledge on the interplay between corporate governance and cash holdings.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"43 13","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139778027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Does climate news sway investors away from large financiers of fossil fuel projects? 气候新闻是否会动摇投资者对大型化石燃料项目融资者的信心？

Investment Management and Financial Innovations Pub Date : 2024-02-14 DOI: 10.21511/imfi.21(1).2024.15

Chekani Nkwaira, Huibrecht Margaretha van der Poll

{"title":"Does climate news sway investors away from large financiers of fossil fuel projects?","authors":"Chekani Nkwaira, Huibrecht Margaretha van der Poll","doi":"10.21511/imfi.21(1).2024.15","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.15","url":null,"abstract":"Despite rapid growth in climate news coverage, some banks are increasing financing towards greenhouse gas emitters with investors whose decisions intensify climate challenges. This study aims to establish the impact of climate news on investment decisions involving banks’ intensified fossil fuel financing and recommend remedies. Descriptive, linear regression analyses and the two-sample t-test are applied. The list of bank stems from the Consumer News and Business Channel website. Share prices, traded shares and market capitalizations are obtained from Macrotrends and Companies’ market cap websites for computing demand and holding periods. Results reveal more demand for riskier banks after European symposiums in contrast to Asia’s reduction. It is established that no significant linear relationships exist between demand and holding periods with t < T and p-value > 0.05. The null hypothesis of no linear relationship is not rejected. There is more price risk in Europe than in Asia with average volatilies of 0.439871 and 0.067472, respectively, at p-value 0.002117 < 0.05 based on the two-sample t-test. The null hypothesis of no difference in volatility means is rejected. The higher volality risk corresponds to higher demand for riskier bank shares in Europe. Climate news persuades Asian investors to reduce the demand for the banks’ shares. Conversely, European investors demonstrate behaviors incompatible with climate risk mitigation, particularly in periods after symposiums. A Global climate risk blacklisting initiative and a publicised Global climate risk index should accompany downgrades aimed at fossil fuel project financiers. Coverage of these measures at conferences may influence more investors to make correct decisions.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"57 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139838104","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Neuro quantum-inspired decision-making for investor perception in green and conventional bond investments 投资者对绿色债券和传统债券投资认知的神经量子启发决策

Investment Management and Financial Innovations Pub Date : 2024-02-09 DOI: 10.21511/imfi.21(1).2024.14

Aigerim Birzhanova, A. Nurgaliyeva, A. Nurmagambetova, H. Di̇nçer, Serhat Yüksel

{"title":"Neuro quantum-inspired decision-making for investor perception in green and conventional bond investments","authors":"Aigerim Birzhanova, A. Nurgaliyeva, A. Nurmagambetova, H. Di̇nçer, Serhat Yüksel","doi":"10.21511/imfi.21(1).2024.14","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.14","url":null,"abstract":"The purpose of this study is to make a comprehensive analysis of investor perceptions in the context of green and conventional bond investments. For this purpose, a new model is presented by considering two steps. First, a criteria set is generated by considering balanced scorecard perspectives that are finance, customer, organizational effectiveness and learning and growth. After that, the neuro Quantum fuzzy M-SWARA method is considered to weight these criteria. Secondly, seven critical determinants for bond investments are identified that are coupon rates, volume, maturity, riskiness, liquidity, volatility, and tax considerations. Neuro Quantum fuzzy TOPSIS approach is employed to rank these factors. The main contribution of the study is that by combining the balanced scorecard framework and quantum-inspired decision-making techniques, this paper offers a novel and sophisticated decision-making model to understanding investor behavior. Similarly, in the proposed model, a new methodology is generated by the name of M-SWARA. In this framework, some enhancements are adopted to the SWARA technique. The weighting results indicate that meeting customer expectations is the most critical factor that affects the investor perception to make investments to the bonds. Moreover, according to the ranking results, it is concluded that coupon rates are the most important item for both conventional and green bond investors. On the other hand, with respect to the conventional bond investor, tax is the second most essential factor. However, regarding the green bond investors, volatility plays a critical role.\u0000AcknowledgmentThis research has been/was/is funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (№ AP 19679105 “Transformation of ESG financial instruments in the context of the development of the green economy of the Republic of Kazakhstan”).","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":" 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139790363","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Neuro quantum-inspired decision-making for investor perception in green and conventional bond investments 投资者对绿色债券和传统债券投资认知的神经量子启发决策

Investment Management and Financial Innovations Pub Date : 2024-02-09 DOI: 10.21511/imfi.21(1).2024.14

Aigerim Birzhanova, A. Nurgaliyeva, A. Nurmagambetova, H. Di̇nçer, Serhat Yüksel

{"title":"Neuro quantum-inspired decision-making for investor perception in green and conventional bond investments","authors":"Aigerim Birzhanova, A. Nurgaliyeva, A. Nurmagambetova, H. Di̇nçer, Serhat Yüksel","doi":"10.21511/imfi.21(1).2024.14","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.14","url":null,"abstract":"The purpose of this study is to make a comprehensive analysis of investor perceptions in the context of green and conventional bond investments. For this purpose, a new model is presented by considering two steps. First, a criteria set is generated by considering balanced scorecard perspectives that are finance, customer, organizational effectiveness and learning and growth. After that, the neuro Quantum fuzzy M-SWARA method is considered to weight these criteria. Secondly, seven critical determinants for bond investments are identified that are coupon rates, volume, maturity, riskiness, liquidity, volatility, and tax considerations. Neuro Quantum fuzzy TOPSIS approach is employed to rank these factors. The main contribution of the study is that by combining the balanced scorecard framework and quantum-inspired decision-making techniques, this paper offers a novel and sophisticated decision-making model to understanding investor behavior. Similarly, in the proposed model, a new methodology is generated by the name of M-SWARA. In this framework, some enhancements are adopted to the SWARA technique. The weighting results indicate that meeting customer expectations is the most critical factor that affects the investor perception to make investments to the bonds. Moreover, according to the ranking results, it is concluded that coupon rates are the most important item for both conventional and green bond investors. On the other hand, with respect to the conventional bond investor, tax is the second most essential factor. However, regarding the green bond investors, volatility plays a critical role.\u0000AcknowledgmentThis research has been/was/is funded by the Science Committee of the Ministry of Science and Higher Education of the Republic of Kazakhstan (№ AP 19679105 “Transformation of ESG financial instruments in the context of the development of the green economy of the Republic of Kazakhstan”).","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"53 5","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139850257","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Precious metals as hedging assets: Evidence from MENA countries 贵金属作为对冲资产：中东和北非国家的证据

Investment Management and Financial Innovations Pub Date : 2024-02-05 DOI: 10.21511/imfi.21(1).2024.13

Rui Dias, Rosa Galvão, Paulo Alexandre

{"title":"Precious metals as hedging assets: Evidence from MENA countries","authors":"Rui Dias, Rosa Galvão, Paulo Alexandre","doi":"10.21511/imfi.21(1).2024.13","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.13","url":null,"abstract":"In the context of the global pandemic of 2020 and the Russian invasion of Ukraine in 2022, a newfound interest is emerging in understanding the interconnections between the Dow Jones (United States), Amman SE General (Jordan), BLSI (Lebanon), EGX 30 (Egypt), ISRAEL TA 125 (Israel), MASI (Morocco), and MOEX (Russia) indices and the precious metals markets Gold Bullion LBM, Silver, Handy & Harman, London Platinum, from January 1, 2018 to November 23, 2023. The study aimed to determine whether precious metals such as Gold, Silver, and Platinum can be considered hedging assets to the stock markets of the Middle East and North Africa (MENA) countries, i.e., whether investors operating in these regional markets can rebalance their portfolios with these precious metals. The structural vector autoregressive (SVAR) methodology allowed assessing the influence of the analyzed markets on each other regarding price formation. The results show that the markets interacted very significantly during the stress period. Platinum was the market that most influenced its peers (1 to 8 comovements), the MOEX, 1 to 7, MASI, 2 to 6, the Dow Jones went from 4 to 7 comovements, the Amman SE General and EGX 30 markets went from 1 to 4, the Israeli market (ISRAEL TA 125) and Silver went from 2 to 4 comovements, and finally the Gold Bullion LBM from 3 to 4. The study’s conclusions contain important information for investors, policymakers, and other participants in the financial energy markets.\u0000Acknowledgments The authors are grateful for the comments and suggestions from reviewers that helped improve the quality of the manuscript. Rui Dias is pleased to acknowledge the financial support from Instituto Superior de Gestão (ISG) [ISG - Business & Economics School], CIGEST.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"31 6","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139802469","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Precious metals as hedging assets: Evidence from MENA countries 贵金属作为对冲资产：中东和北非国家的证据

Investment Management and Financial Innovations Pub Date : 2024-02-05 DOI: 10.21511/imfi.21(1).2024.13

Rui Dias, Rosa Galvão, Paulo Alexandre

{"title":"Precious metals as hedging assets: Evidence from MENA countries","authors":"Rui Dias, Rosa Galvão, Paulo Alexandre","doi":"10.21511/imfi.21(1).2024.13","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.13","url":null,"abstract":"In the context of the global pandemic of 2020 and the Russian invasion of Ukraine in 2022, a newfound interest is emerging in understanding the interconnections between the Dow Jones (United States), Amman SE General (Jordan), BLSI (Lebanon), EGX 30 (Egypt), ISRAEL TA 125 (Israel), MASI (Morocco), and MOEX (Russia) indices and the precious metals markets Gold Bullion LBM, Silver, Handy & Harman, London Platinum, from January 1, 2018 to November 23, 2023. The study aimed to determine whether precious metals such as Gold, Silver, and Platinum can be considered hedging assets to the stock markets of the Middle East and North Africa (MENA) countries, i.e., whether investors operating in these regional markets can rebalance their portfolios with these precious metals. The structural vector autoregressive (SVAR) methodology allowed assessing the influence of the analyzed markets on each other regarding price formation. The results show that the markets interacted very significantly during the stress period. Platinum was the market that most influenced its peers (1 to 8 comovements), the MOEX, 1 to 7, MASI, 2 to 6, the Dow Jones went from 4 to 7 comovements, the Amman SE General and EGX 30 markets went from 1 to 4, the Israeli market (ISRAEL TA 125) and Silver went from 2 to 4 comovements, and finally the Gold Bullion LBM from 3 to 4. The study’s conclusions contain important information for investors, policymakers, and other participants in the financial energy markets.\u0000Acknowledgments The authors are grateful for the comments and suggestions from reviewers that helped improve the quality of the manuscript. Rui Dias is pleased to acknowledge the financial support from Instituto Superior de Gestão (ISG) [ISG - Business & Economics School], CIGEST.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"243 10","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139862263","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Impact of banking functions on online investment intention in India: Examining the mediating role of service experience 银行功能对印度在线投资意向的影响：检验服务体验的中介作用

Investment Management and Financial Innovations Pub Date : 2024-02-01 DOI: 10.21511/imfi.21(1).2024.11

Pinku Paul, Subhajit Bhattacharya

{"title":"Impact of banking functions on online investment intention in India: Examining the mediating role of service experience","authors":"Pinku Paul, Subhajit Bhattacharya","doi":"10.21511/imfi.21(1).2024.11","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.11","url":null,"abstract":"The study aimed to determine the various antecedents of banking functions that may lead to consumers’ intention to use online banking channels for investment with the role of service experience in mediating the relationship between banking function, online investment intention, cost perception, and behavioral factors. Data were collected through an online survey to understand consumer perceptions and behavioral intentions among online banking users in India. The population of this study is Indian residents who are customers of banks providing online services. Purposive sampling and snowball sampling were used as sampling methods. The study used an online survey with a list-based sample frame using social media chat functions or messaging applications in which the Google forms link was shared. A total of 561 valid responses were successfully accumulated from 1,136 Google forms, indicating a response rate of 61.78%. The study employs SEM-PLS using PLS 2.0 software for data analysis. The results validated the direct effect of online investment intention through a bank on different components of banking channel function linkages: information and service awareness, transactional efficacy, trust, brand effect, convenience, and information technology support (p < 0.05). The findings also highlighted that customer service experience mediates the relationship between banking channel function and consumers’ investment intention through online banking channels, significantly impacting customers’ cost perception and behavioral factors (p < 0.05). The research implications are expected to improve the banking service experience of customers and might motivate them to use the online banking channel for investment.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"110 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139828562","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Impact of banking functions on online investment intention in India: Examining the mediating role of service experience 银行功能对印度在线投资意向的影响：检验服务体验的中介作用

Investment Management and Financial Innovations Pub Date : 2024-02-01 DOI: 10.21511/imfi.21(1).2024.11

Pinku Paul, Subhajit Bhattacharya

{"title":"Impact of banking functions on online investment intention in India: Examining the mediating role of service experience","authors":"Pinku Paul, Subhajit Bhattacharya","doi":"10.21511/imfi.21(1).2024.11","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.11","url":null,"abstract":"The study aimed to determine the various antecedents of banking functions that may lead to consumers’ intention to use online banking channels for investment with the role of service experience in mediating the relationship between banking function, online investment intention, cost perception, and behavioral factors. Data were collected through an online survey to understand consumer perceptions and behavioral intentions among online banking users in India. The population of this study is Indian residents who are customers of banks providing online services. Purposive sampling and snowball sampling were used as sampling methods. The study used an online survey with a list-based sample frame using social media chat functions or messaging applications in which the Google forms link was shared. A total of 561 valid responses were successfully accumulated from 1,136 Google forms, indicating a response rate of 61.78%. The study employs SEM-PLS using PLS 2.0 software for data analysis. The results validated the direct effect of online investment intention through a bank on different components of banking channel function linkages: information and service awareness, transactional efficacy, trust, brand effect, convenience, and information technology support (p < 0.05). The findings also highlighted that customer service experience mediates the relationship between banking channel function and consumers’ investment intention through online banking channels, significantly impacting customers’ cost perception and behavioral factors (p < 0.05). The research implications are expected to improve the banking service experience of customers and might motivate them to use the online banking channel for investment.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"8 4","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139888515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Corporate governance report compliance rate and accounting conservatism: New evidence from Korea 公司治理报告合规率与会计保守主义：韩国的新证据

Investment Management and Financial Innovations Pub Date : 2024-01-31 DOI: 10.21511/imfi.21(1).2024.10

Hyoung Seok Choo, Sun-ae Cho, Jeongeun Emilia Lee

{"title":"Corporate governance report compliance rate and accounting conservatism: New evidence from Korea","authors":"Hyoung Seok Choo, Sun-ae Cho, Jeongeun Emilia Lee","doi":"10.21511/imfi.21(1).2024.10","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.10","url":null,"abstract":"This study investigates the relationship between the corporate governance report (CGR) compliance rate and a company’s accounting conservatism, utilizing the CGR compliance rate as a novel method to evaluate the effectiveness of corporate governance practices. Given the challenges of applying global indices to measure corporate governance in the Korean market, this study focuses on the CGR compliance rate as a key indicator. Utilizing the ordinary least squares (OLS) regression model, specifically the Ball and Shivakumar (2005) model widely employed in previous studies to assess accounting conservatism, this paper conducts empirical analyses based on 784 observations from Korean listed firms between 2018 and 2021. The main analysis reveals a positive association between the CGR compliance rates (coef = –2.416, p-value < 0.01) and accounting conservatism. A fixed-effect model and a propensity score matching (PSM) model also show a positive association between the CGR compliance rates, respectively (coef = –2.507, p-value < 0.01; coef = –3.118, p-value < 0.1) and accounting conservatism. This study proves that firms with high CGR compliance rates tend to promptly recognize financial losses in financial reporting, thereby safeguarding investors. This suggests that investors should consider the CGR compliance rates when evaluating potential investments. Overall, these findings contribute to validating the CGR compliance rates as a valuable proxy for assessing corporate governance practices in Korean firms.","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"527 13","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140476819","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0

Capital structures of surviving Fortune 500 companies: A retrospective analysis for the past seven decades 财富》500 强幸存公司的资本结构：对过去七十年的回顾分析

Investment Management and Financial Innovations Pub Date : 2024-01-30 DOI: 10.21511/imfi.21(1).2024.09

Wenjuan Xie

{"title":"Capital structures of surviving Fortune 500 companies: A retrospective analysis for the past seven decades","authors":"Wenjuan Xie","doi":"10.21511/imfi.21(1).2024.09","DOIUrl":"https://doi.org/10.21511/imfi.21(1).2024.09","url":null,"abstract":"Sixty companies on the inaugural “Fortune 500” list still remained on this list in 2020 and they have monotonically increased their leverage (median debt to total assets ratio rose from 0.5% to 20.4%) over the past 70 years. This study applies factors from classic capital structure theories to this sample and explains the dynamic choice of debt usage. The methods employed include a Bayesian information criterion selection process of explanatory variables and a set of pooled cross section and panel tests with 3,536 firm-year observations. The tests use an array of factors extracted from several established theories on capital structure, including general economic growth, tax rate, interest rate and many company-specific variables proxying profitability and growth opportunities. The firm-level results first provide support to the free cash flow theory and confirm that company size and fixed assets proportion are the two factors associated with increased borrowing. Firms in the sample also actively respond to certain debt market and macroeconomic conditions, and their leverage ratio is significantly associated with credit spread and real interest rate. Further tests across subperiods and with risk measures illustrate the impact of expected inflation, investments activities, and stock volatility, providing supporting evidence to the organizational theory. The main research conclusion is that large US companies adopt a balance sheet-based approach to increase the use of debt, and they stay sensitive and versatile to market conditions and risk landscape.\u0000AcknowledgementsThe author declares no financial or personal relationships with other people or organizations that could inappropriately influence my work. The author thanks the journal editor and anonymous referees, Ahmad Etebari, Fred Kaen, discussants and participants at the Northeast Business and Economics Association 2022 annual meeting and the 2023 Global Finance Conference for their constructive critiques. All errors remain my responsibility.\u0000","PeriodicalId":507796,"journal":{"name":"Investment Management and Financial Innovations","volume":"46 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140485306","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

引用次数: 0