Effect Of Financial Flexibility Research Articles

The effect of financial flexibility on profitability and sustainable growth rate in the Corona pandemic era: Evidence from Egyptian stock market

The effect of financial flexibility on profitability and sustainable growth rate in the Corona pandemic era: Evidence from Egyptian stock market

Research on the effect of enterprise financial flexibility on sustainable innovation

The innovation and development of enterprises are influenced by both internal management and external economic policy uncertainty. This study examines methods for enterprises to ensure the development of sustainable innovation under economic policy uncertainty. Specifically, this study examines the effect of national economic policy uncertainty as a threshold variable on enterprise financial flexibility in a sustainable innovation model using the micro data of non-financial companies in China's A-share market from 2007 to 2019. Through an empirical analysis of the mechanism of the effect of enterprise financial flexibility on innovation, this paper discusses the possible "adaptive effect" of financial flexibility under policy uncertainty. Using a threshold effect model, this study examines the coefficient change of the negative effect of enterprise financing constraints on sustainable innovation caused by fluctuations in economic policy uncertainty and records the threshold value of the economic policy uncertainty index. The results show that a rise in policy uncertainty has a negative impact on enterprise innovation, and enterprises can actively adjust their flexible financial reserve to gain an adaptive effect under the influence of policy uncertainty. The results indicate a simultaneous threshold effect based on economic policy uncertainty in a model of enterprise financing constraints and sustainable innovation. Accordingly, the economic policy uncertainty index can be divided into a “reasonable area” and “warning area,” to indicate the need for enterprises to take countermeasures to deal with the fluctuations caused by government economic policies appropriately.

Spatial Spillover Effect of Financial Flexibility on Investment in China’s Convention and Exhibition Listed Companies

Financial flexibility is an important research issue in corporate finance. This paper utilizes the Spatial Durbin Model (SDM) to analyze the impact of financial flexibility on the investment of Convention and Exhibition companies listed on the New Third Board from 2014 to 2016. The empirical results show the following. Firstly, the greater the financial flexibility, the more investment the firm will make. Secondly, the enhancement in financial flexibility would lead to an increase in investment of companies in the Convention and Exhibition industry in the local provinces, indicating that the financial flexibility has a significant positive intraregional spatial spillover effect on investment. On the other hand, financial flexibility has spatial spillover effects, and its rise will reduce the investment in other provinces, which could be explained by the competition effect between enterprises. Overall, we have further elucidated the role of different levels of financial flexibility on the investment of the Convention and Exhibition listed enterprises from the spatial dimension, thereby enriching the existing research on corporate financial flexibility and corporate value to some certain extent.

The Effect of Financial Flexibility in Corporate Life Cycle Stage on Firm Performance

The Effect of Financial Flexibility in Corporate Life Cycle Stage on Firm Performance

The Effect of Financial Flexibility on Financial Behavior of Companies Listed in Tehran Stock Exchange

The flexibility plays an important role in making the managers powerful in the regard of investment in the future. The problems of the capital market have necessitated the maintenance of flexibility for the companies for the purpose of using profitable opportunities. The present research has aimed to study the effect of financial flexibility on the financial behavior. The statistic sample used in the present study consists of 100 companies accepted in Tehran stock exchange during the years 2009 to 2015. The financial flexibility and financial behavior are respectively the independent and dependent variables which were measured by the investment activity, dividend payout ratio, amount of cash holding and company value. The data analysis was done by the use of the multi-variable regression models based on the panel data techniques and the use of Eviews econometrics software. The results concluded from the study of effect of the financial flexibility on the financial behavior corresponding to the theoretical foundations which had meaningful and positive effects. Therefore, the hypothesis that the financial flexibility has positive and meaningful effects on the investment activity of the companies accepted in the stock exchange was confirmed. The other results of paper were that the financial flexibility had negative and meaningful effects on the dividend payout ratio. So, the hypothesis that the financial flexibility has negative and meaningful effects on the dividend payout ratio of the companies accepted in the stock exchange was not confirmed. The hypothesis that the financial flexibility has positive and meaningful effects on the amount of cash holding of the companies accepted in the stock exchange was not confirmed, because the effect of the flexibility on the amount of cash holding was not meaningful. Also, the hypothesis that the financial flexibility has positive and meaningful effects on the value of companies accepted in the stock exchange was confirmed.

The effect of financial flexibility on firm's financial leverage

The effect of financial flexibility on firm's financial leverage

The effect of financial flexibility on firm's financial leverage

We empirically examine the impact of financial flexibility on firm's financial leverage. Financial flexibility is measured through five variables including growth opportunities, profitability, effective tax rate, spread and asset liquidity intensity. For this work, data of all companies during the period 2004-2013 are gathered from Tehran Stock Exchange. Our results show that firms with high sales growth, spread and effective tax rate have high financial leverage. Also firms with high profitability have higher asset liquidity intensity in their whole assets composition and therefore these firms tend to have lower financial leverage. We also find that firms with higher profitability have a higher liquidity in their asset composition and lower financial leverage. Also, firms with a higher spread have higher profitability and higher liquidity in their asset composition and keep higher liquidity. This group of firms have lower distress risk. Therefore, short-term investors may consider this group of firms for a lower risk investment.

The value of corporate financial flexibility in emerging countries

Using a sample of firms from 33 emerging countries, we find evidence that corporate financial flexibility enhances investment ability and reduces the sensitivity of investment to cash flow. In addition, financial flexibility reduces equity payout and increases cash holdings. The effects of financial flexibility on investment ability and financial policies are elevated during the global financial crisis of 2007–2009. Our results also show that financial flexibility adds to firm value, particularly during the financial crisis. Financially flexible firms suffer less from negative shocks. We find that financially flexible firms had smaller cutbacks in investment expenditures and equity payouts and suffered less in operating performance than never financially flexible firms during the global financial crisis.

Effects of Flexibility on Capital Structure Decisions in Family Firms

The present study evaluates marginal value of cash for investors. It also undertakes to examine the relationship between financial flexibility and capital structure, as well as effects of financial flexibility on capital structure decisions in family firms listed at Tehran Stock Exchange. A total number of 60 companies are sampled between the years 2008 to 2013. A panel-pool data analysis method is used for testing hypotheses. Results indicate that marginal value of cash using the methodology of Faulkender is positive. Also, a significant and reverse relationship is found between financial flexibility and debt ratio. On the other hand, marginal value of cash highly affects the capital structure decisions of family firms.

After a market panic: cash is king

Purpose – The purpose of this paper is to examine the effects of financial flexibility as represented by excess cash holdings and debt capacity upon firm returns after periods of high market uncertainty. Design/methodology/approach – Days of high uncertainty are identified from 1987-2011 using the VXO Index (implied volatility of the S&P 100) yielding approximately 45,000 firm events. The main variables of interest are excess cash (Duchin et al., 2010) and debt capacity. Two financial constraint indexes are used as controls in a cross-sectional OLS regression. Findings – The precautionary value of cash during and after times of uncertainty is beneficial. A positive relationship exists for periods of up to two years following the initial day of high uncertainty. Positive BHRs exist on a zero-cost trade investing in a portfolio of high excess cash firms and shorting a portfolio of cash constrained firms. The value of excess debt capacity, on the other hand, is harder to discern; positive profits are obtainable on a zero-cost trade while regression estimates are typically insignificant on average. Originality/value – This paper expands the financial flexibility literature by testing the effects of financial flexibility on returns following days of high market uncertainty.