Indebtedness Of Companies Research Articles

Capital structure determinants of private and public firms in an emerging economy: a panel data quantile regression analysis

PurposeThis study explores distinct capital structure patterns between private and public companies, examining the varying influence of determinants on debt choices contingent upon a firm’s existing debt position.Design/methodology/approachEmploying annual data from 2012 to 2022 for 142 public firms and 660 private firms in a large emerging economy, we use quantile regression within a panel data framework to study the heterogeneous effects of debt determinants, incorporating firm and time random effects.FindingsOur findings indicate that such factors as size and operating margin contribute to higher levels of debt, while investment opportunities reduce the debt level. Further analyses, when accounting for a firm’s likelihood of being publicly traded, reveal that dividend payout and operating margin significantly influence debt levels, exclusively in the presence of high debt proportions. Conversely, investment opportunities emerge as a substantial determinant in all debt scenarios. In addition, we found a strong persistence in the indebtedness of companies, and we conclude that the effect of the determinants of indebtedness is heterogeneous according to the level of debt of companies.Originality/valueThis research provides a comprehensive comparison between private and public firms, not only in terms of debt levels but also in key capital structure determinants, highlighting their significance within the context of varying debt levels.

Determining the Influence of Internal Factors on Indebtedness

Indebtedness and its level are one of the most important indicators of the healthy operation of every company. In this study, the authors deal with the analysis of the influence of certain selected internal factors on the level of indebtedness of agricultural enterprises in Serbia. Only large agricultural enterprises were taken as a sample, and the sample itself includes 5702 observations and 87 companies. The subject of the analysis is the annual panel data of large agricultural companies, and the analysis period covers from 2015 to 2021. In the analysis, the authors used the debt-to-asset indicator as a representative of the company's indebtedness, and it represents the only dependent variable. As independent variables, the authors used indicators of general liquidity, return on capital, return on assets, EBIT level, and equity level. The authors used several diagnostic tests to establish the validity of the regression model. To obtain the results, the authors used the POLS model, the fixed effects model, and the random effects model to determine the influence of independent variables on indebtedness. The results indicated the statistical significance and negative impact of indicators of general liquidity, return on capital, and the level of own capital on the level of indebtedness. The contribution of this paper is that it provides an insight into the relationship of certain internal factors to indebtedness, as well as helps in determining the best level of the relationship between the use of debt and own funds in the financing of the company.

INDEBTEDNESS INDICATORS IN THE SERBIAN TEXTILE INDUSTRY

The company's financing structure is one of the main factors of its successful functioning, as well as finding an adequate balance between its own financing and debt financing. Debt financing is a common way for companies to raise funds for their operations, investments, and other business activities. It involves borrowing money from lenders or investors and agreeing to repay the borrowed amount along with interest over a specified period. Companies can obtain loan financing from various sources such as banks, credit unions, private investors, and bonds. There are many internal determinants that can have a positive or negative impact on the trend of the company's indebtedness. In this study, the authors observed a period of 15 years and 10 companies of the Serbian textile industry, defining a model of internal determinants of companies' indebtedness. The authors used POLS and a fixed effects model to generate an adequate model of determinants. The results indicated a greater adequacy of the POLS model and at the same time showed a negative impact on indicators of financial stability, current liquidity, and profit on assets.

What Firm-Specific and Macroeconomic Determinants of Financial Structure Affect Transport and Storage Companies from Selected European Countries?

A number of indicators can be assessed for a company’s financial health, with indebtedness indicators being one of the important ones. The formation of the financial structure is influenced by a huge number of factors. The subject of this research is the indebtedness of companies in the Transportation and storage industry. The companies come from the V4 countries, Austria, Bulgaria, Slovenia, and Romania, between 2010 and 2018. In total 25,246 companies are analysed according to their size for medium and large companies. The aim of the research is to find out whether profitability, liquidity, asset structure, non-debt tax shield, GDP growth rate, reference interest rate, and inflation rate affect the level of total, long-term and short-term debt. The main finding is that corporate debt is significantly affected (measured by the value of coefficients) by non-corporate determinants and specifically the development of the reference interest rate. However, if we look at the most numerous determinants, it is profitability. Companies in the selected industry should focus primarily on the various forecasts within the external environment of the company and include them in their analyses when financing their activities.

Carbon management strategy effects on the disclosure and efficiency of carbon emissions: A study of Colombian companies’ context and inherent characteristics

The purpose of this study is to identify the contextual characteristics and the company-inherent characteristics to analyze the disclosure of carbon emissions and the efficiency of emissions from the incorporation of a Carbon Management Strategy. This study is based on two models: i) Carbon emissions disclosure and ii) Efficiency of carbon emissions. We develop the models using the relationship between A) the adoption of a Carbon Management Strategy and the disclosure of carbon emissions and B) the impact of having a Carbon Management Strategy and the efficiency of direct and indirect emissions by Colombian companies. We use an Ordinary Least Square regression model for the carbon emissions disclosure model and a robust Ordinary Least Square model on the efficiency model of carbon emissions based on a balanced panel data of Colombian listed companies for the period 2016–2019 and we take sub-samples to analyze scope 1, scope 2 and scope 3. The study includes variables in relation to the companies’ context (fiscal strategy through carbon taxation and geographical location) and company-inherent characteristics (size and sensitive industry sector). The results of the carbon emissions disclosure model suggest that, in large companies, there is a positive relationship between the adoption of a Carbon Management Strategy and the disclosure of emissions for scopes 1 and 2. Sensitive industries disclose the three scope levels. In the regional analysis, the quantitative information on the scope is scarce and suggests that companies are not willing to disclose information that sends a negative signal of their environmental actions to the stakeholders. The results of the carbon emissions efficiency model show an important connection with the indebtedness of companies as a leverage mechanism to acquire technology or manage innovation projects for a more efficient management of Greenhouse Gas emissions. Shareholders also have an impact on efficiency. This is associated with a growing interest in incorporating environmental criteria into their investment decisions and the effect of obtaining information on emissions through voluntary reports. The Carbon Management Strategy index is positive for the efficiency of controlled indirect emissions (scope 2). This finding suggests that emission reduction strategies focus on the management of electricity consumption or the use of renewable sources to improve financial costs and emission indicators. This study is innovative because it is focused on a country without established Greenhouse Gas regulations and it is in a complex scenario where political stability and the rule of law are affected. This study raises a potential topic to explore further because the topic is in a germinal stage in the academic and business field.

Fatores Determinantes da Estrutura de Capital das Empresas Brasileiras: Evidências do Setor de Utilidade Pública

This study aimed to analyze the determinants of short (ECP) and long-term (ELP) indebtedness of companies in the Public Utility sector in Brazil, in the light of the pecking order and trade-off theories. The methodology used was the multiple regression analysis with panel data for the period from 2008 to 2017, using ECP and EPL as dependent variables; and profitability, risk, size, current liquidity index, growth and tangibility as independent variables. The sample consisted of 55 companies, whose data were extracted from the Bloomberg financial information platform. In the results, it was pointed out that, for the ELP, only the profitability and growth variables were relevant for determining the capital structure of companies, while the risk factors, size, liquidity index and tangibility were not. With regard to the ECP, the variables profitability, risk, liquidity index and growth were significant while size and tangibility were not. For all cases, the observed relationships were negative, therefore, sometimes compatible with the trade-off theory, sometimes with the pecking order.

Rebalanceamento da Estrutura de Capital: Endividamento Setorial e Folga Financeira

Admitindo-se um modelo em que o endividamento das empresas é fortemente influenciado pelo lado da oferta de recursos pelo fato de os credores e investidores (usuários do CAPM e de múltiplos de mercado) avaliarem sua exposição e nível de risco em bases relativas (empresas similares). Esse comportamento induz a estrutura de capital-alvo das empresas ao endividamento mediano do setor, restando aos gestores apenas gerenciar sua estrutura de capital em torno desse valor (folga financeira). Como objetivo, investigou-se o papel da folga financeira, avaliada como uma medida de endividamento relativo, e do endividamento setorial sobre o rebalanceamento da estrutura de capital das empresas. Para tanto, utilizou-se uma amostra inicial de empresas americanas com 32.309 observações-ano para estimar as medianas setoriais de 64 setores e uma subamostra de 5.380 observações, representando ainda 58 setores, para a construção de um painel balanceado por um período de 20 anos. Os resultados do painel dinâmico para o endividamento contábil indicam que o endividamento da empresa tende a acompanhar o endividamento setorial, porém tendem a reverter sua tendência em um período de dois anos. A velocidade de reversão está associada à folga financeira, ou seja, empresas mais distantes do endividamento mediano do seu setor convergem mais rapidamente.

Measuring the Performance of Romanian Listed Companies Considering their Individual Characteristics

Abstract The aim of this paper is to provide evidence about the financial performance that the companies that are listed on a regular market obtained. The financial performance can be influenced by individual characteristic of the entity, like: size, indebtedness ratio, and liquidity ratio, type of the auditor, the industry where they act or other particular features. The research was conducted upon the Bucharest Stock Exchange (BSE). It took into consideration the entities that have to report their individual financial statements under International Financial Reporting Standards (IFRS). This regulation is compulsory for entities that are admitted for listing on a regular market from 2012. The study provides proper evidence about the factors that influence the entities’ performance. Both quantitative and qualitative measures were taken into consideration. The qualitative elements were quantified using dummy variables (the development region, the type of auditor, the specialization field, the case in which major shareholder has more than 50% of the shares). The results emphasize the important of several variables (i.e. the company's size, the region where the entity acts, the company's indebtedness ratio, and the company's age) that have significantly influenced, both in a positive and a negative way, the financial performance. Considering the area in which the company is specialized, no reliable information was detected. It seems that neither return on equity, neither return on assets, neither cash flow from operation divided by total assets are reliable financial measure though which the influence of specialization can be properly reflected. Considering geographical regions, companies from nord - west region and from the west region do obtained a lower financial performance that that that it's obtained if the company act in other development region.

Úpadek v České republice - vliv makroekonomických veličin

This article deals with the bankruptcy of entrepreneurial subjects and how bankruptcy rate is affected by macroeconomic variables. The article is based on the time series for the period from 1993 to 2012. The article analyses the influence of GDP, indebtedness of companies, inflation and interest rates on the number of declared bankruptcies. There might be supposed positive or negative correlation between GDP, indebtedness of companies, inflation and interest rates and the number of declared bankruptcies. Also there is tested lag in correlation between number of declared bankruptcies and GDP, indebtedness of companies, inflation and interest rates. My findings in this article confirm strong correlation between GDP, indebtedness of companies, inflation and interest rates and the number of declared bankruptcies.

The Economics and Culture of Financial Inflation

In this paper ‘financialisation’ is broadly defined as a process of inflating capital markets or more strictly financial inflation. The paper examines some of the social, economic and political consequences of financial inflation for the activities of companies and the operations in debt markets of an increasingly financial middle class. Financial inflation alters the behaviour of individuals and firms, and hence the character and dynamics of the capitalist economy and society. The first section of the paper explains the Kalecki–Steindl theory of enforced company indebtedness in a middle-class society. The second section shows how financial inflation makes companies over-capitalised, resulting in a decline in the trend of long-term investment. The third section shows how forced company indebtedness is modified as the middle classes extend their consumption financed through inflating asset markets. A conclusion sketches out some of the consequences of this financialisation for politics, social policy, and moral and cultural attitudes.

Léonard du Bus de Gisignies (1780–1849), Belgian Commissioner-General in the Dutch East Indies: A Reassessment

In his speech of throne of October 17, 1825, the Dutch king William I expressed his concerns on the extremely loss-making Dutch colonial enterprise of that moment. The aftermath of the closing down of the Verenigde Oostindische Compagnie (VOC) in the 1790s and the transfer of the company's indebtedness to the state, threatened to bring about the loss of the Dutch first-rate position on the international colonial forum. Moreover, the fiasco of the so-called liberal interlude of the enlightened Governor-General G. van der Capellen and his often frivolous politics in Java during the period 1816–1826, deeply disillusioned the king. Therefore, William officially announced the appointment of a commissioner-general, a representative provided with extraordinary power and authority who was only supposed to give account direcdy to the king himself. He also informed the States General of the appointment of the governor of the province of SouthBrabant in the Southern Netherlands Leonard du Bus de Gisignies as his commissioner-general on August 10 of the same year.