High Leverage Research Articles

Fostering positive instruction of software development cycle through a culturally responsive pedagogy

Application/Software development, a component of ICT is an important skill needed to help address sustainability given its high societal leverage. On recognizing the complexity of understanding software development cycle and putting into consideration the technicalities involved in developing software to solve organizational problems, there is a dire need to employ innovative pedagogy into classroom learning in more creative ways to. This study investigates the effectiveness of a culturally responsive pedagogy (Culturo‑Techno‑Contextual Approach) in improving students’ meaningful learning of software development cycle. The research design was a quasi‑experimental design, 127 senior secondary two ICT students were engaged from two schools in Lagos State, Nigeria. The ANCOVA output demonstrated a statistically significant difference in the achievement [F (1,136) = 172.13; p < .05]. However, no significant difference was found in the achievement between male and female students using CTCA. The findings contribute to ongoing discourse on innovative pedagogical approaches in ICT education.

The Effect of Financial Leverage, Profitability and Dividend Policy on Firm Value

This research provides valuable insights into the factors influencing company value within the manufacturing sector, specifically the cement subsector in Indonesia. Financial leverage, profitability, and dividend policy are key variables examined, as they significantly impact a company's financial health and market perception. Financial leverage reflects a company’s reliance on debt financing relative to equity, and the study shows that higher leverage can positively affect company value if managed effectively, thereby increasing returns for shareholders. Profitability, often measured through indicators such as Return on Assets (ROA) or Return on Equity (ROE), also plays a significant role in enhancing company value, as it reflects efficient resource management and attracts investor interest. Additionally, a consistent dividend policy reinforces the company’s reputation and draws investors, contributing positively to company value in the stock market. The findings emphasize that cement subsector companies with balanced leverage, solid profitability, and a consistent dividend policy tend to perform better in terms of company value, providing essential insights for stakeholders in optimizing strategies to maximize company value.

Capital Structure and Enterprise Market Value: An Empirical Analysis Based on S&amp;P 500 Companies

Abstract: This study explores the impact of capital structure on enterprise market value, specifically examining the influence of the debt ratio on the market valuation of S&amp;P 500 companies. Capital structure decisions are crucial for corporate managers and investors, as they significantly affect firm performance, risk, and market perception. The research is motivated by the need to understand how financial leverage influences market valuation, particularly in large, publicly traded companies. Utilizing two-way fixed effect panel data models spanning from 2020 to 2023, we find significant evidence that higher leverage is associated with an increase in market valuation, offering a comprehensive view of the factors that influence corporate market values. Additionally, the study reveals that the impact of leverage varies across company sizes and examines sector-specific effects and the role of long-term debt. The findings provide key insights for investors and corporate managers regarding the impact of financial structure on company valuation, emphasizing the importance of optimizing capital structure to enhance firm value and strategic decision-making.

Economic policy uncertainty and dividend policy: Insight from private firms

This study examines whether economic policy uncertainty (EPU) is associated with corporate dividend policy. Using a sample of private firms, we find that EPU is negatively related to dividend payouts. Our main findings are robust to endogeneity concerns, omitted variable problems, simultaneity bias, and alternative measures of EPU. Further, we find that firms are less likely to pay dividends when EPU is higher, confirming our main results. We also find that the negative relation between EPU and dividend payouts is stronger for firms with higher leverage, operating cash flows, sales growth, return on assets, and cash flow volatility than their counterparts. In contrast, the negative relation is weaker for firms with higher retained earnings-to-total equity ratios. Our study highlights that issues such as EPU can influence the dividend payout policies of private firms.

Systemic Risks in the Derivatives Market: Origins, Impacts, and Mitigation Strategies

Derivative markets play an indispensable role in the contemporary financial system. The global financial markets have been repeatedly riddled with turbulence instigated by derivative trading in recent years, underscoring the urgency and necessity for in-depth study in this field. The subject matter of this paper is to delve into systemic risk in the derivative markets, including its genesis, impact, and mitigation strategies. This paper aims to proffer valuable insights and recommendations to policymakers and financial practitioners through comprehensive analysis. To achieve this objective, this study utilizes research methodologies such as literature review, analysis of historical cases, and empirical analysis. The findings suggest that the systemic risk in the derivative markets primarily stems from high leverage operations, market information asymmetry, and complex financial product structures. These risks became particularly prominent during the financial crisis, leading to an upsurge in market volatility, liquidity crises, and a domino collapse of financial institutions. Based on these findings, the paper proposes a gamut of strategies to mitigate systemic risk, including enhancing market transparency, optimizing risk models, augmenting capital requirements, and fostering international regulatory cooperation. Additionally, technological innovations such as blockchain and big data analysis are considered to hold significant potential in enhancing market transparency and improving the accuracy of risk prediction.

Analysis Of Financial Statement of Chinese Real Estate Enterprises-Take One Certain Company as An Example

Real estate enterprises play an important role in the economic development of China, which are directly influence the economy. Different from other enterprises, real estate enterprises have the features of high leverage, large capital demand, slow repayment and long investment period. In recent years, the central government has implemented a series of policies, real estate enterprises facing severe financial risks. It’s important for enterprises to identify and prevent the financial risks. As a representative of China's highly leveraged and large-scale real estate enterprises, the company continuously violates the "three lines and four levels" policy when it is implemented. This article analyses the financial risks of this company by collecting the company’s financial statement data from the past five years, using ratio analysis and Z-value model. By researching the data, this article finds that the company has weak debt paying ability, operational ability, and profitability in recent years, also facing high financial risks.

To What Extent Has the Real Estate Industry Affected China's Economic Growth?

This paper focuses on the impact of the real estate industry on China's economic growth. We discovered, through an examination of certain specialist literature and statistical data analysis, that the real estate sector has been a major factor in China's economic expansion. Particularly, real estate investment is a considerable portion of fixed asset investments and makes a noteworthy contribution to economic growth. However, every coin has two sides. The rapid development of real estate also comes with some problems, such as the risk of real estate bubble and high leverage. Therefore, in order to make the real estate better promote the development of the national economy, the government has decided to guide the orderly and stable development of the real estate industry through policy regulation. In this article, by reviewing the previous literature and analyzing some relevant data about real estate, I will explore the impact of real estate industry on China's economic growth. The research finds that the development of the real estate industry is good for economic growth, but at the same time, policymakers should also pay attention to controlling the development speed of the real estate, such as: real-time monitoring of the market and formulating relevant policies to avoid problems.

Peran Profitabilitas dalam Memediasi Kebijakan Dividen: Studi Kasus pada Jakarta Islamic Indeks 70

This study stems from the phenomenon of investment shifting from the real sector to financial Practice with expectations of obtaining returns in the form of dividend policies. The research examines the impact of Leverage, liquidity and profitability as intermediate variables in dividend policy, for issuers listed in the Jakarta Islamic Index (JII 70). Using several purposive sampling criteria, 25 issuers were selected as research samples. Leverage describes the company's ability to settle obligations with debt; companies with high leverage tend to retain earnings rather than distribute dividends. Liquidity reflects the company's ability to meet short-term obligations; liquid issuers tend to distribute dividends. Profitability, measured through Return on Equity (ROE), is expected to mediate the relationship between leverage and liquidity with dividend policy. According to the Trade-Off Theory, the balance between the use of debt and current assets positively impacts profitability, increasing the likelihood of dividend distribution. The research results show that leverage and liquidity have an adverse impact on dividend policy, with liquidity having a beneficial effect but not contributing to profitability, while leverage negatively affects profitability. Profitability does not significantly mediate the relationship between leverage and liquidity with dividend policy. These findings are important for investors and management in understanding the factors impacting dividend policy decisions in the Sharia capital market.

Carbon risk and corporate maturity mismatch

This study investigates the impact of carbon risk on the corporate maturity mismatch of investment and debt. We find that carbon risk exacerbates maturity mismatches, primarily by increasing debt default risk, which in turn reduces both the availability and maturity of bank loans. At the same time, carbon risk drives firms to undertake riskier investments, compelling them to rely more heavily on short-term financing to support long-term projects. Heterogeneity analysis reveals that the impact of carbon risk on maturity mismatch is more pronounced in firms that are smaller in size, exhibit weaker financial performance, have higher leverage, hold less cash, or engage in less green innovation. Moreover, under heightened carbon risk, increased maturity mismatch appears to reduce agency costs and enhance firm performance, thereby improving resource allocation. This finding supports the monitoring role of maturity mismatch. Our results remain robust across multiple sensitivity tests

Peran Penghindaran Kebangkrutan dalam Mengakselerasi Earning Management

This study aims to analyze the impact of financial distress on earnings management within companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2021. Utilizing a purposive sampling technique, the research focuses on 44 companies that are noted for their special status on the IDX. Key control variables examined include company size, leverage, cash flow operations (CFO), growth, profitability ratios (ROA), equity issuance (EISSUE), and debt issuance (DISSUE). The findings reveal that financial distress significantly and negatively influences earnings management, indicating that distressed companies are less likely to engage in manipulative financial reporting. Furthermore, the study identifies that all control variables contribute to a nuanced relationship between financial distress and earnings management. Specifically, variables such as size, CFO, leverage, ROA, EISSUE, and DISSUE exhibit a significant positive impact on earnings management, suggesting that larger companies with higher leverage and profitability are more prone to earnings manipulation. Conversely, the growth variable demonstrates a significant negative effect, implying that companies experiencing growth are less likely to manage earnings. These insights contribute to a deeper understanding of the dynamics between financial distress and corporate financial behavior, offering valuable implications for investors, regulators, and policymakers.

The Effect of Leverage and Political Connections on the Performance of State-Owned Enterprises

This study aims to examine the influence of leverage and political connections on the performance of state-owned enterprises (SOEs) with good corporate governance (GCG) as a moderating variable. The research uses a quantitative approach, with the population consisting of SOEs listed on the Indonesia Stock Exchange (IDX). The sample was selected using purposive sampling, resulting in 13 companies being chosen as the study's subjects. The results of the study indicate that leverage negatively affects company performance, meaning that the higher a company's debt, the lower its performance. Conversely, political connections have a positive impact on performance, suggesting that political involvement can provide advantages in enhancing a company's performance. Additionally, good corporate governance is found to positively influence company performance, reinforcing the importance of sound governance in supporting operational success. Good corporate governance also acts as a moderating variable. GCG weakens the negative relationship between leverage and company performance, while strengthening the positive impact of political connections on performance. This indicates that strong governance practices can help mitigate the adverse effects of high leverage and maximize the benefits of political connections that the company may have.

CEO turnovers as organizational responses to shocks in competition

This paper provides novel evidence of organizational responses in the form of CEO turnover to competition shocks induced by unexpected tariff cuts. We find that the likelihood of CEO turnover increases with unexpected surge in industry competitiveness, and this result is mainly driven by non-exporting firms. Among non-exporting firms, the higher likelihood of CEO turnover is confined to firms with weak governance, high leverage, and in financial distress. Exporting firms, on the other hand, experience increased exports and show no significant CEO turnover changes.

Does CFO Gender Matter in Corporate Cash Holdings? Evidence from an Emerging Country

ABSTRACT This study examines whether CFO gender is associated with corporate cash holdings in the context of China, one of the largest emerging market countries. We find that firms with female CFOs have more cash holdings than those with male CFOs. Next, we find that the positive relationship between female CFOs and cash holdings is less pronounced in firms with high financial leverage than those with low financial leverage. We further find that the negative moderating effect of financial leverage on the relationship between female CFOs and cash holdings is stronger for firms with a lower presence of female board members. Our main result is robust to an alternative measure of cash holdings and endogeneity concerns. This study provides meaningful implications for developing and emerging market countries by elucidating the relationship between female CFOs and cash holdings. The empirical evidence can also help shareholders and bondholders better understand the female CFO—cash holdings nexus in light of financial leverage and the presence of female board members.

Good Corporate Governance dalam Agresivitas Pajak pada Perusahaan Pertambangan di Bursa Efek Indonesia

This study aims to determine the relationship between leverage, company characteristics, and financial performance with illegal tax aggressiveness in mining companies listed on the Indonesia Stock Exchange in 2019-2022. The research method used is quantitative with secondary data. The population of this study are mining sector companies listed on the Indonesia Stock Exchange in 2019-2022. The sample obtained was 10 companies using purposive sampling method. Data analysis using SmartPLS. The results showed that leverage, company characteristics, and financial performance had no significant effect on tax aggressiveness. This means that mining companies that have high leverage, poor company characteristics, and poor financial performance do not tend to practice tax aggressiveness. In addition, good corporate governance cannot moderate the relationship between leverage, company characteristics and financial performance with tax aggressiveness. This means that leverage, company characteristics and financial performance still have a significant influence on tax aggressiveness, even though the company has good corporate governance.

Geopolitical conflict and firm bankruptcy risk

This study examines the impact of geopolitical risk on corporate bankruptcy. We utilize a global dataset of 36,802 firms from 42 countries covering 2004-2022. Our baseline result indicates that geopolitical risk increases firm bankruptcy risk. Our results remain robust after controlling for endogeneity using 2SLS, propensity score, and entropy balancing techniques, as well as using alternative proxies. Our analysis shows that high cash flow and strong creditor rights help mitigate bankruptcy risk, while high leverage and aggressive earnings management stimulates it. Our findings provide insights for policymakers and industry practitioners to formulate effective strategies to mitigate bankruptcy risk in globalization.

Examining Leverage and Sales Growth: Their Influence on Stock Prices of Agricultural Firms on the Indonesia Stock Exchange

Information available in the capital market influences investor confidence, which in turn impacts market efficiency. Stock prices are a crucial factor for every investor to consider when investing in shares. Higher stock prices indicate better performance of the issuing company, and vice versa. This study aims to determine the effect of leverage and sales growth on stock prices of agricultural companies listed on the Indonesia Stock Exchange from 2018 to 2022. The research sample consists of 18 agricultural companies selected through purposive sampling. Data were analyzed using EViews 12 SV software. The study's findings reveal that leverage has a negative impact on stock prices. High leverage indicates a heavy reliance on debt, which increases the risk of bankruptcy and high interest burdens, thus reducing the attractiveness of the company's shares to investors. Meanwhile, sales growth does not have a significant impact on stock prices, as the probability value is above 0.05.

Household finances, debt overhang and consumption patterns

This paper studies the effect of household debt on consumption throughout the business cycle. We use household-level data for Spain in a period, 2002–2017, characterized by significant fluctuations in leverage, consumption, and asset prices. We find that high levels of debt have a negative effect on consumption during recession periods, while previous debt accumulation does not significantly influence consumption. When considering heterogeneities across types of debt, we observe that households adjust their spending faster in response to debt not associated with real estate assets. By exploiting explicit information on household credit constraints, we find no evidence suggesting that they play a significant role in shaping the debt-consumption nexus. We conclude that in a situation of high leverage and financial stress, debt overhang decreases household consumption. In this context, policies aimed at preventing households from leveraging excessively during expansions, and policies providing debt relief during recessions, can help mitigate consumption shocks.

Clawback enforcement heterogeneity and the horizon of executive pay: empirical evidence

Purpose Clawback provisions entitle shareholders to recover previously awarded incentive compensation after the discovery of accounting manipulation or misconduct. The author evaluates the impact of clawback enforcement heterogeneity on the horizon of executive compensation. Design/methodology/approach The author provides empirical tests to evaluate the impact of clawback adoption decisions. The author deals with the endogeneity of clawback adoption decisions through an instrumental variables strategy that exploits the transmission of governance choices within firms’ networks. Findings While the author finds that clawback adoption reduces the frequency of accounting manipulation, this reduction is accompanied by heterogeneous effects on the horizon of executive pay across firms. Clawback adopters with high director independence, high leverage, high managerial termination payments and low executive ownership tilt their compensation toward the short-term. Practical implications The results, robust to alternative specifications, suggest that clawbacks allow strong-enforcement firms to tilt compensation toward the short-term, offsetting some of the direct manipulation disincentives generated by the clawback. The stock market reacts positively to the adoption in firms with weak enforcement, suggesting that clawbacks significantly reduce the managers’ rent-extraction capacity. Originality/value Using a novel empirical and identification approach, the results suggest that clawbacks allow strong-enforcement firms to tilt compensation toward the short-term, offsetting some of the direct manipulation disincentives generated by the clawback.

How effective is corporate governance in preventing financial fraud in Indonesia Kompas100 firms?

This study examines the relationship between corporate governance practices and the incidence of financial fraud among firms listed on the Kompas100 Index in Indonesia. Utilizing a panel dataset of 1,000 companies over the period from 2015 to 2023, the research employs a Fixed Effects Model (FEM) to analyze the impact of key governance variables, including board composition, ownership structure, and audit committee effectiveness, on fraud occurrence. The findings reveal that firms with a higher proportion of independent directors and more effective audit committees are less likely to engage in financial fraud. Conversely, concentrated ownership and higher leverage are associated with an increased likelihood of fraud. These results underscore the importance of robust governance mechanisms in preventing fraud, particularly in the context of Indonesia's evolving corporate landscape. The study also discusses the limitations of the research and offers policy recommendations to strengthen corporate governance frameworks, thereby enhancing the integrity of Indonesia's financial markets.

Research on Financing Risk Control of Vanke Group Under the Background of New Real Estate Model

With the continuous development of new urbanization in our country, the relationship between housing demand and supply of our people is also changing, and the country is also introducing corresponding new policies. In April 2024, the state issued a comprehensive study of the policy measures to digest the stock of real estate and optimize the incremental housing, a time the property market ushered in a big wave of good, which undoubtedly shows that the implementation of the policy will promote the people s livelihood in our country -- live to high-quality development. However, in the development of the market, there are still problems such as imperfect market order and insufficient theoretical research. The characteristics of real estate enterprises require huge funds, and their characteristics of high leverage also reveal many financing risks. This paper takes China s leading real estate enterprise -- Vanke Group as a case, analyzes the risks arising in its financing, and finally puts forward corresponding suggestions on its risks.