Effects Of Firm-specific Factors Research Articles

Corporate Cash Holdings and Speed of Adjustment: Does Shariah Compliance Matter?

This study examines the impact of the shariah complaint status on corporate cash holdings, the speed of adjustment towards its target cash holdings, and the effect of firm-specific factors on corporate cash holdings. The data of non-financial firms listed on the Pakistan Stock Exchange from 2015 to 2020 has been collected. The panel data methodology is used. The findings imply that shariah-compliant firms hold more cash than non-shariah-compliant firms. The adjustment speed toward its target cash holdings is faster in shariah compliant firms. The financial leverage and cash flows show a negatively significant effect on corporate cash holdings. The working capital, dividend, and profitability exert a significant positive change on cash holdings. Explaining the cash-holding determinants reveals that trade-off and pecking order theories play a central role. This study is beneficial for policymakers, managers, and investors.

Effect of firm specific factors and reinsurance on performance of Nepalese Insurance Companies

This study examines the effect of firm specific factors and reinsurance on performance of Nepalese insurance companies. Return on assets (ROA) and return on equity (ROE) are the dependent variables. The selected independent variables are firm size, liquidity, assets tangibility, net claim ratio, net commission ratio and ratio of ceded reinsurance. The study is based on secondary data of 16 insurance companies with 124 observations for the period from 2013/14 to 2020/21. The data are collected from the annual reports of the selected insurance companies and annual report published by Rastriya Beema Samiti. The regression models are estimated to test the significance and effect of firm specific factors and reinsurance on performance of Nepalese insurance companies.

The Effect of Firm Specific Factors on Lessor Financial Performance in Egypt (panel analysis)

This study attempts to identify some of the firm specific factors that might have an impact on lessor financial performance after the application of EAS 49 and the Financial Leasing and Factoring Act (Law 176 of 2018). Numerical data were collected for five years during 2016-2020 from financial reports obtained from the Egyptian Financial Regulatory Authority (FRA). Study sample comprised 43 observations. The dependent variable is the firm financial performance signified by total debt/total equity, earnings per share EPS, return on equity ROE, asset turn over, return on capital employed ROCE, current ratio, return on assets ROA, and total debt/total assets. The independent variables are sales, financial liabilities, EBIT/operating profit or loss, and financial leased fixed assets. The study used pooled model, fixed effect model, and random effect model. Results indicate the sales, financial liabilities, EBIT/operating profit or loss, and financial leased fixed assets have an effect on lessor financial performance after the application of both IFRS 16 equivalent of EAS 49 and the Egyptian Financial Leasing and Factoring Act (Law 176 of 2018). The data is accurate and complete. The length of the study period makes it possible to track progress of lessor firms. This study tries to identify the impact of some firm specific factors on lessor financial performance after application of EAS 49 and Financial Leasing and Factoring Act (Law 176 of 2018). Thus, this study is a modest contribution to better decision making of investors, creditors, lessors, and lessees.

What do we know about capabilities and early internationalization? A review and synthesis

PurposeThe purpose of this study is to organize and assess knowledge on the capabilities pertinent to the early internationalization of born globals (BGs) and international new ventures (INVs).Design/methodology/approachA systematic approach is used to search, code, organize and synthesize 155 peer-reviewed journal articles on capabilities and early internationalization.FindingsThe study delimits eight operational and five dynamic capabilities. The synthesis links capabilities to three antecedents (i.e. firm specific factors, managerial socio cognitive attributes and market factors) and three outcomes (i.e. precocity, survival and performance). While 7 of the 12 linkages identified are well-established, relationships involving market factors, survival and dynamic capabilities are sparsely researched.Research limitations/implicationsThe authors know more about the effects of firm specific factors and managerial socio cognitive attributes on operational and dynamic capabilities than we do the influence of market factors on either group of capabilities. Likewise, the authors know more about the influence of operational and dynamic capabilities on performance than we do their impact on precocity or survival.Practical implicationsAs the pandemic has shown, businesses with adaptable capabilities (e.g. shifting from a brick and mortar to an online/omnichannel approach or micro-breweries competent to switch from manufacturing beer to hand sanitizer) have increased their chance of survival while helping society cope.Originality/valueThis to the authors’ knowledge is the first study to provide a comprehensive review of literature on the nebulous concept of capabilities, in the context of the burgeoning research stream on early internationalization.

Examining the effect of firm-specific factors on the automotive industry in Indonesia

This study aims to examine the factors that affect the value of manufacturing companies in the Automotive Industry Sub-Sector Listed on the Indonesia Stock Exchange in 2015 - 2019. These factors are firm size and financial performance. The financial performance consists of liquidity, profitability, and solvency. The number of manufacturing companies in the Automotive Industry sub-sector which was made into the population was 13. Sampling was using the purposive sampling technique. Based on the predetermined criteria, there were 10 companies that met the criteria so that there were 50 observations. Data collection techniques use documentation from financial reports published on the official website of the Indonesia Stock Exchange. The model used in this research is panel data regression using the Eviews application. The findings of this study indicate that of the four independent variables tested, only the solvency variable affects firm value, but the simultaneously firm size and financial performance have a significant effect on firm value. The results of this study indicate that in general, stock investors view the importance of all financial ratios, but can ignore short-term financial symptoms that are reflected in company size, profitability, and liquidity, but should pay more attention to the security of long-term investments which can be seen insolvency.

Theoretical Review of Effect of Firm Specific Factors on Performance of Initial Public Offering Stocks at the Nairobi Securities Exchange in Kenya

During the period 1994 to 2020, a total of 18 firms in Kenya floated 16,530,781,060 shares at the Nairobi Securities Exchange (NSE) under Initial Public Offerings (IPOs) raising over Kshs 91 billion. These stocks were significantly over-subscribed with the highest hitting 830%. The NSE became fully automated in 2006. Similarly, in Africa between 2010 and 2019 there were a total of 215 IPOs raising over Kshs 1.6 trillion. This could be explained by divergence of opinion hypothesis. The initial returns were positive. However, in the long run, most of the firms underperformed. This under performance leads to losses incurred by investors and possible collapse of brokerage and investment firms leaving investors with a bitter taste. This study will undertake to establish the effects of firm specific factors on IPO stock performance at the NSE in Kenya. The specific objectives will be: to establish the effect of firm size on performance of IPO stocks at the NSE in Kenya, to determine the effect of age of firm on performance of IPO stocks at the NSE in Kenya, to evaluate the effect of firm board composition on performance of IPO stocks at the NSE in Kenya, to establish the effect of firm ownership structure on performance of IPO stocks at the NSE in Kenya, and to analyze the moderating effect of automation on the firm specific factors and performance of IPO stocks at the NSE in Kenya. The study will be built upon major theoretical streams: Random Walk theory, Winners curse theory, Dow Theory, Signaling theory and Agency theory and contextualize them to firm specific factors and performance of IPO stocks. More studies have previously been undertaken on the pricing of IPO at the NSE in Kenya and the few that studied on performance of IPO stocks at the NSE in Kenya have provided mixed findings depending on the methodology used. None of the studies as far as research has shown have considered the automation of NSE in Kenya as a moderating effect of performance of IPO stocks. The sample size will be the same as population of 18 IPO firms between 1994 and 2020 with 8 IPOs during pre-automation and 10 IPOs post-automation period. This will be a longitudinal and event study that will adopt a descriptive study design. Data will be analyzed using the Econometric Views (Eviews). Hausman test, Augmented Dickey Fuller (ADF) test and other diagnostic tests will be applied to the panel data. The Capital Assets Pricing Model (CAPM) and the Nairobi 20 Share Index will be used as the benchmarks of performance of IPO stocks.

Firm Specific Factors dan Profitabilitas Sub-Sektor Properti di Indonesia

This study analyzes effects of firm specific factors to the profitability of property and real estate sub-sector which listed in BEI in time period of 2010-2015. Firm specific factors are measured with liquidity, financial leverage, firm size, and firm growth as generally used determinants. This reasearch used purposive sampling method at 33 firms which fulfill the research criterions, which are firms listed consistently in BEI’s property and real estate sub-sector, also publishing financial statements routinely during research period. Analysis proceeded by using multiple linear regression with study results show that liquidity and financial leverage have negative effects to profitability, while firm size and firm growth have positive effects to profitability.

The Effects of Firm-Specific Factors on the Financial Soundness by using CARAMELS Framework Indicators: A Case of Non-Life Insurance Industry of Pakistan

The study is carried out to identify the relations of firm-specific factors with the financial soundness indicators of CARAMELS framework for the non-life insurance industry, by using a panel data set of 22 non-life insurance companies of Pakistan from 2007 to the year 2016. This study is established on two most applicable panel data techniques (random effects as well as fixed effects models), referring to the Hausman’s test. This test proves that the fixed effect model is appropriate for the analyses of firm-specific factors. Based on the highest number of relationships among variables, fixed effects model’s results propose that three firm-specific factors (age of company, management competence index and operating ratios) have significant relations with the CARAMELS financial soundness indicators. However, seven firm-specific factors (size of the company, equity capital, leverage, market share, investment ratio, premium growth and solvency margin) have insignificant relation with the CARAMELS financial soundness indicators. According to author’s best knowledge, it’s the first study that identifies the relations of firm-specific factors with the CARAMELS financial soundness indicators, that will assist to the scholars, managers and policymakers of the non-life insurance industry of Pakistan to consider the significant factors.

How did the 2007-2008 Financial Crisis Influence Turkish Firms

Abstract. This paper investigates whether 2007-2008 global financial crisis hadan effecton Turkish firms. For this purpose, we investigated the firm-specific factors affecting the stock returns of firms in the BIST-XU100 in the 2004-2009 periods. The period was divided into two sub-samples, namely pre-crisisand during-crisis periods. Moreover, the effects of firm size, market-to-book ratio (MB), and price-to-earnings (PE) ratio on stock return were examined using feasible generalized least-squares (FGLS) and panel-corrected standard errors (PCSE) models. In the literature, the US subprime mortgage crisis meltdown and spillover effects were studied on different countries and different stock markets. In this study, not only crisis effects but also effects of firm-specific factors were considered. Integration levels of the series were investigated by panel unit root tests. The models were used for both sub-samples, and the results of the two models werecompared. The results showed that. Size and MB variables were significant in all the periods and had positive effects on the stock return of the firms, and the global financial crisis hada significant but weak effect on Turkish firms. Keywords. Financial Crisis, Stock Market, FGLS, PCSE. JEL. C23, G01, G20.

The Effects of Firm-Specific Factors on the Profitability of Non-Life Insurance Companies in Turkey

This study investigates the firm-specific factors affecting the profitability of non-life insurance companies operating in Turkey. For this purpose, data of 24 non-life insurance companies operating in Turkey from the period 2006–2013 were brought together to obtain 192 observed panel data sets. In this study, profitability is measured by two different variables: technical profitability ratio and sales profitability ratio. According to the empirical results, the firm-specific factors affecting the profitability of Turkish non-life insurance companies are the size of the company, age of the company, loss ratio, current ratio, and premium growth rate.

Market entry strategies in post-financial crisis Southeast Asia: The case of Japanese manufacturing firms

Existing research on entry mode determinants is firmly grounded in the transaction cost and resource-based literature, while institution-based location characteristics lack attention. The primary goal of this paper is to address the determinants of entry mode choice by Japanese manufacturing firms in Southeast Asia after the financial crisis by highlighting the institutional perspective in particular. Results show that institutional factors make significant contributions to the understanding of the entry mode selection of Japanese manufacturing firms and partly override the effect of firm-specific factors.

The Effect of Firm-Specific Factors on the Market Reaction to Dividend Change Announcements: New Evidence from Europe

The dividend policy is one of the most debated topics in the finance literature. According to the dividend signalling hypothesis, which has motivated a significant amount of theoretical and empirical research, dividend change announcements trigger share returns because they convey information about management's assessment on firms' future prospects. Consequently, a dividend increase (decrease) should be followed by an improvement (reduction) in a firm's value. However, some studies have not supported the hypothesis of a positive relationship between dividend change announcements, and the subsequent share price reaction, such as the ones of Lang and Litzenberger (1989), Benartzi, Michaely and Thaler (1997), Chen, Firth and Gao (2002), Abeyratna and Power (2002) and Vieira (2005). Furthermore, some authors found evidence of a significant percentage of cases where share prices reactions are opposite to the dividend changes direction, like the works of Asquith and Mullins (1983), Benesh, Keown and Pinkerton (1984), Born, Mozer and Officer (1988), Dhillon and Johnson (1994) Healy, Hathorn and Kirch (1997), and, more recently, Vieira (2005). Consequently, we try to identify firm-specific factors that contribute in explaining the adverse market reaction to dividend change announcements. Globally, our evidence suggests that only for the UK sample we have firm-specific factors influencing the market reaction to dividend change announcements. We conclude that the UK firms with a negative market reaction to dividend increase announcements have, on average, higher size, lower earnings growth rate and lower debt to equity ratios.