scholarly journals Capital Structure Decision and Firm’s Life Cycle-A Study on Non-Financial Sector of Pakistan

2016 ◽  
pp. 1-18
Author(s):  
Sonia Zafar Et al.,
Keyword(s):  
Life Cycle ◽  
Capital Structure ◽  
Emerging Economies ◽  
Stock Exchange ◽  
Practical Implication ◽  
Financial Sector ◽  
Policy Makers ◽  
Leverage Ratio ◽  
Life Cycle Stages ◽  
Firm’S Life Cycle

The basic aim of this study is to distinguish the ratio of capital structure at different life cycle stages of a firm. Literature is rich in discussing the determinants of capital structure and its influence on the performance of a firm. However; the association of capital structure decision with respect to the life cycle stages is less investigated especially in the emerging economies. Therefore, in order to investigate the choice of leverage ratio during a firm’s life cycle, 107 firms from the non-financial sector of Pakistan Stock Exchange for the period of ten years i.e. 2004- 2013 are selected. A deterministic approach is used to classify the life cycle stages as presented by Miller and Friesmen (1984). Panel data methodology is used to analyze the capital structure decision with respect to firm’s life cycle. The results indicate that the leverage of a firm has a significant relation with the age of the firm, especially for the older firms. It will have a practical implication for the policy makers to focus on the easy availability of finance at younger stages of a firm as they feel financial constraints during their early life cycle.

scholarly journals Pengaruh Struktur Modal Terhadap Kinerja Perusahaan Berdasarkan Siklus Hidup Perusahaan

2018 ◽  
Vol 5 (1) ◽  
pp. 69
Author(s):  
Tia Ardianty Aulia ◽  
Nining Ika Wahyuni ◽  
Indah Purnamawati
Keyword(s):  
Life Cycle ◽  
Capital Structure ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Secondary Data ◽  
Company Performance ◽  
Manufacturing Companies ◽  
Regression Methods ◽  
Life Cycle Stages ◽  
The Capital Structure

This research aims to examine the effect of capital structure to the company's performance based on the life cycle. The population in this study are all manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2011-2015. Sampling by using purposive sampling method, that is by grouping companies into life cycle stages based on the average sales growth. The sample in this study as many as 98 companies. This research uses secondary data that the financial statements of companies manufacturing the years 2011-2015 were obtained in the Indonesia Stock Exchange. The data used include sales, debt, equity, assets and profit after tax.Methods of data analysis using Descriptive Statistics, Clasiccal Assumption Test, Regression Methods, and Hypothesis Test consisted of t Test, F Test and Coefficient of Determinatio (R Square). The results showed that the capital structure at start up, growth, and mature have a significant positive effect on company performance. The capital structure at each stage of the company life cycle is different, the greater the capital structure then the company's performance is increasing. Keywords: Capital Structure, Company Performance, Company Life Cycle, manufactur

scholarly journals Firm Life Cycle and Investment Inefficiency

2020 ◽  
Vol 3 (2) ◽  
pp. 169-184
Author(s):  
Amelia Graciosa ◽  
Gracia Gracia ◽  
Rita Juliana
Keyword(s):  
Life Cycle ◽  
Cash Flow ◽  
Stock Exchange ◽  
Life Cycles ◽  
Free Cash Flow ◽  
Maturity Stage ◽  
Investment Performance ◽  
Life Cycle Stages ◽  
The Government ◽  
Firm’S Life Cycle

This paper investigates whether the firm's life cycle stages carry out free cash flow efficiently or not before their investment performance. We utilize cash flow patterns to classify firms into five several life cycles stages. Our data consists of non-financial firms listed in Indonesia Stock Exchange from 2008-2018. We find evidence that Indonesian firms in the introduction, growth, and shakeout stage are underinvesting. This paper also shows that firms in decline stage are overinvested. The characteristic of the mature firm includes that firms with high cash flow will tend to overinvest. However, contrasting with mature firms' common characteristics, our results show that Indonesian firms in maturity stage tend to underinvest. The results also imply that the government should acknowledge the existence of Indonesian firms' investment inefficiency problem. Overall, this paper contributes to the literature by providing empirical evidence on Indonesia's investment inefficiency phenomena. It is suggested that further research may select a different method in calculating growth opportunities and may also study private firms since it tends to have higher financial constraints.

scholarly journals Empirical Investigation of Symmetric and Asymmetric Target Adjustment Models: Capital Structure of Non-Financial Firms in Jordan

2017 ◽  
Vol 9 (3) ◽  
pp. 133 ◽  
Author(s):  
Bashar K. Abu Khalaf
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Interaction Model ◽  
Firm Characteristics ◽  
Leverage Ratio ◽  
Financial Firms ◽  
Large Size ◽  
Amman Stock Exchange ◽  
Target Leverage ◽  
The Impact

The different capital structure theories propose the possible asymmetric behavior of capital structure. Thus, this paper empirically investigates whether non-financial Jordanian firms follow symmetrical or asymmetrical adjustment model. Then, an interaction model with the size and profitability (firm characteristics) investigated the impact of low/high profit and small/large size on the adjustment of leverage towards the target leverage ratio. This paper covered the period of 14 years (2002-2015) for a total of 110 companies listed on Amman Stock Exchange (75 industrial and 35 services). Results indicate that although Jordanian firms seek a target leverage ratio, their adjustment towards that target is Asymmetrical and high profitable and large companies tend to adjust faster than low profitable and small size companies.

scholarly journals PENGARUH STRUKTUR MODAL TERHADAP PROFITABILITAS DAN NILAI PERUSAHAAN PADA PERUSAHAAN BATUBARA YANG GO-PUBLIC DI INDONESIA

2019 ◽  
Vol 3 (1) ◽  
pp. 97
Author(s):  
LCA Robin Jonathan ◽  
Theresia Militina
Keyword(s):  
Capital Structure ◽  
Coal Mining ◽  
Financial Management ◽  
Firm Value ◽  
Stock Exchange ◽  
Secondary Data ◽  
Selling Price ◽  
Data Types ◽  
Leverage Ratio ◽  
Mining Companies

This study aims to analyze and determine the effect of the projected capital structure in the leverage ratio on profitability and company value in coal companies that go public in Indonesia in 2013-2015 both directly and indirectly.With the improvement in the selling price of coal today, it is a breath of fresh air for coal mining companies to start their activities. The decision on the proportion between debt and equity is very important. Modigliani and Miller said that the use of debt would be more profitable than the capital itself. The main objective of financial management is to maximize the value of the company. From managed business activities, profits are obtained. The problem is whether the capital structure has a significant effect on profitability and firm value. The development of coal mining companies in Indonesia has good prospects because it is very much needed for the energy industry by generating electricity with coal. The mining and mining service companies listed on the Indonesia Stock Exchange in 2013-2015 were 42 companies and 23 of them were coal mining companies whose financial reports were examined at the same time period. This study uses path analysis with cross section data and secondary data types in the form of financial statements published on the Indonesia Stock Exchange. The results of the study show that directly, capital structure has no significant effect on profitability and has a negative and significant effect on firm value. Profitabitas has no significant effect on firm value. Indirectly, profitability has no significant effect in mediating the relationship of capital structure to firm value.

scholarly journals Pengaruh profitabilitas, leverage, likuiditas, struktur modal dan keputusan investasi terhadap nilai perusahaan pada perusahaan sektor keuangan yang terdaftar di Bursa Efek Indonesia Tahun 2015-2017

2021 ◽  
Vol 16 (1) ◽  
pp. 37-50
Author(s):  
Peffi Manalu ◽  
Getsmani Getsmani ◽  
Citra Permatasari Hutagaol ◽  
Deasy Arisandy Aruan
Keyword(s):  
Capital Structure ◽  
Firm Value ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Sampling Technique ◽  
Financial Sector ◽  
Quantitative Approach ◽  
Research Approach ◽  
Purposive Sampling ◽  
Study Population

This study aims to determine the effect of profitability, leverage, liquidity, capital structure, and investment decisions on firm value. A research approach is a quantitative approach. The study population was taken from financial sector companies that have been listed on the Indonesia Stock Exchange 2015-2017, namely from a total of 87 companies, 39 companies were taken. The sample applies the purposive sampling technique. The research successfully proves that profitability, leverage, liquidity, capital structure, and investment decisions have a positive and significant effect on firm value. Partially, the research results are only profitability which has a positive and significant effect on firm value. So that the Adj obtained. R Square 13.1% with the remaining 86.9% influenced by outside variables. Keywords: Profitability,Leverage, Liquidity, Capital structure, Investment decisions, Firm value

scholarly journals Financial Performance, Capital Structure and Share Ownership Structure, Companies Registered on the Indonesia Stock Exchange (Empirical Study on Manufacturing Companies Listed on the Stock Exchange Indonesia Period 2012-2016)

2019 ◽  
Author(s):  
Purwanti . ◽  
Eddy Irsan Siregar
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Returns ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Manufacturing Companies ◽  
Leverage Ratio ◽  
Share Ownership ◽  
The Capital Structure

This study will examine Financial Performance, Capital Structure and Structure Share Ownership, Companies that are measured using Economic Value Added (EVA). The sample used in this study uses a method purposive sampling with several predetermined criteria. With using the pooled data method, the study sample consisted of 117 observations data listed on the Indonesia Stock Exchange for the period 2012-2016 obtained from Indonesian Capital Market Directory (ICMD) and also from financial statements annual manufacturing company. The data analysis technique used is regression multiple linear and hypothesis testing using t test and F test with level 5% significance. The results of the study indicate that institutional ownership has greater value than managerial share ownership, so that monitoring functions by institutional shareholders are more effective in monitoring. Leverage ratio on manufacturing companies listed at The Indonesia Stock Exchange during the 2012-2016 research period, is still deep the normal range at the lower level is around 30% - 36%. Asset structure on manufacturing companies listed on the Indonesia Stock Exchange during the period the 2012-2016 research is still quite low, meaning the company asset structure doesnot affect the capital structure. The growth of company assets is not affect the capital structure of registered manufacturing companies on the IndonesiaStockExchangefortheperiod2012-2016.Capital structure,size the company and the risk of stock returns simultaneously influence on financial performance of manufacturing companies listed on the Stock Exchange Indonesia for the period 2012-2016. Institutional share ownership, ownership managerial shares, company size, riskofstockreturnsandcapitalstructurethecompanyhasaninfluenceonthefinancial performance of manufacturing companies listed on the Indonesia Stock Exchange during the 2012 study period - 2016

scholarly journals Corporate Life Cycle and the Explanatory Power of Risk Measures versus Performance Measures

2011 ◽  
Vol 2 (6) ◽  
pp. 199-206 ◽  
Author(s):  
Hamed Omrani ◽  
Saber Samadi . ◽  
Ahmad Kazemi Margavi . ◽  
Hamid Asadzadeh . ◽  
Hemad Nazari .
Keyword(s):  
Life Cycle ◽  
Performance Measures ◽  
Regression Models ◽  
Stock Exchange ◽  
Risk Measures ◽  
Explanatory Power ◽  
Financial Information ◽  
Mature Stage ◽  
Life Cycle Stages ◽  
Corporate Life Cycle

The major aim of this paper is to compare the explanatory power of risk measures versus performance measures in different life-cycle stages. To test the hypotheses, first, sample firms were classified into three life-cycle stages (Growth, Mature and Decline). Then, using regression models and Vuong's Z-statistic, the hypotheses were investigated. In this study, financial information of 75 firms which were accepted at Tehran’s Stock Exchange (TSE) from 2003 to 2008 (450 firm-years) was examined. The results of this study show that in growth and decline stages, the explanatory power of risk measures is significantly higher than performance measures and in mature stage, the opposite is true.

scholarly journals Capital Structure Theories and Speed of Capital Adjustment towards Target Capital Structure along Life Cycle Stages of Asian Manufacturing Firms

2020 ◽  
Vol 6 (1) ◽  
pp. 53-62
Author(s):  
Muhammad Sajid Amin ◽  
Hashim Khan ◽  
Imran Abbas Jaddon ◽  
Muhammad Tahir
Keyword(s):  
Life Cycle ◽  
Capital Structure ◽  
Manufacturing Firms ◽  
The Other ◽  
Mature Stage ◽  
Costs And Benefits ◽  
Speed Of Adjustment ◽  
Capital Adjustment ◽  
Life Cycle Stages

Purpose: Firms have different costs and benefits and asymmetric information across their life cycle stages and hence each stage has different financial pattern and speed of adjustment towards target capital. Methodology: We use System GMM to test the hypotheses. We use market leverages proxies for the capital structure, life cycle proxies: introduction, growth, mature, shakeout and decline and the control determinants of capital structure such as profitability, tangibility, firm size and growth opportunities. We estimate the financial pattern and speed of adjustment along life cycle stages of manufacturing firms from eleven Asian economies over the period of 2010-2018. Findings: The results show that firms in earlier stages have more long term debt than mature stage. The speed of adjustment towards target capital structure is highest in mature stage than the other stages. The control determinants significantly affect market leverages. Implications: The findings suggest that management has to consider life cycle stages of their firms in order to adjust capital structure. Stockholders should consider stage of firm with relation to profitability and capital structure for long term prospects.

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