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The past performance and the capital structure of the companies that are involved in mergers and acquisition (M&As) are considered into the analysis of the circular causality relationship between financial performance and market value. Considering two models, one for value relevance and one for accounting conservatism, this paper aims to analyze if the capital market influences the accounting practices of a target company or that the accounting figures influence the capital market. The analyzed sample used in the study is represented by the target companies involved in M&As which took place in the European Union Enlarged in 2017–2018. Financial and market data were considered for eight years (2011–2018). Using the conservatism model, the results show that targets' earnings are significantly influenced by their financial leverage as an indicator for financial structure. Using the value relevance model, the capital market reaction is influenced by prices and return on equity that indicates the capital market influence on accounting figures. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Finance Letters / Maliye Finans Yazıları Dergisi is the property of Maliye Finans Yazilari Yayimcilik Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Capitalizing on the productivity decomposition proposed by Olley and Pakes, we analyse the role of financial factors behind the relatively muted post-crisis rebound in productivity compared to previous upturns in Europe. First, we provide an Ordinary Least Squares framework to decompose the index of sector-level productivity into trend and allocative efficiency components. We then extend our approach to estimate the contribution of firm-level confounders to the sector-level allocative component. Secondly, we find that financial leverage played an important role in explaining the change in aggregate productivity growth in Europe between 2004 and 2017. Thirdly, focusing on Northern and Western Europe, we show that the productivity potential could not be fully exploited due to access to credit conditions. Specifically, reducing collateral bottlenecks could more than double the effectiveness of financial leverage in spurring productivity growth in this region between 2014 and 2017. [ABSTRACT FROM AUTHOR]

Purpose: Microfinance emerged as an essential catalyst for socio-economic development and financial inclusion to reduce poverty. Microfinance institutions cannot meet their primary objective of poverty reduction if they are not sustainable financially. With the theoretical support of profit incentive theory, this paper aims to investigate the impact of organizational structure (OS), growth outreach (average loan per borrower [ALPB] and number of active borrowers), women empowerment (percentage of women borrowers [PWB]), liquidity, leverage and cost efficiency (cost per borrower) on the financial sustainability of microfinance providers (MFPs) in India and explore the possible moderating effect of the national governance indicators (NGIs). Design/methodology/approach: A financial sustainability index has been developed by using principal components analysis, including both conventional measures (return of assets and return on equity) and efficiency measures (operational self-sufficiency and financial self-sufficiency). Due to the existence of endogeneity and heteroskedasticity, this study uses two-step system generalized method of moments estimates to examine the relationships for a period of 2006 to 2018. Findings: The finding reveals that there is a strong significant relationship between financial sustainability and its influential factors. Organizatioanl Structure, loan size, women borrowers, Gross Domestic Products and inflation enhance the financial sustainability of India's microfinance sector. However, a number of borrowers, liquidity, leverage and operating costs negatively affect the financial sustainability of MFPs of India. The estimates demonstrate that NGIs significantly moderate the association between financial sustainability and its influential factors. The NGIs negatively affect the positive impact of Organizatioanl Structure on financial sustainability. National governance increases the positive effect of loan size (ALPB) and reduces the negative effect of a number of borrowers and leverage on the financial sustainability of MFPs of India. However, NGIs negatively affect the positive relationship between Percentage of Women Borrowers and Financial sustainability of Microfinance Providers of India. Originality/value: To the best of the authors' knowledge, this study is the first of its kind that incorporates all of the six dimensions of the National Governance Indicators (NGIs) and uses as a moderator. Secondly, a financial sustainability index has been developed for measuring the financial sustainability of Microfinance Providers (MFPs). [ABSTRACT FROM AUTHOR]

This study introduces a cutting-edge profit health assessment framework that merges signaling theory and agency theory within a data science context, leveraging both financial and nonfinancial indicators to provide a comprehensive, multidimensional evaluation of earnings quality in publicly traded companies. This model transcends conventional earnings management frameworks by focusing on the holistic earnings condition of firms and addressing challenges related to information asymmetry and managerial motives. The empirical analysis utilizes data from small and medium-sized private enterprises listed on China's SME Board between 2018 and 2022, employing machine learning algorithms to rigorously validate the model's effectiveness. The results reveal that 85.7% of the penalized firms by the China Securities Regulatory Commission from 2018 to 2023 exhibited low levels of profit health. This data science driven analysis deepens the understanding of corporate earnings health for regulators and investors. The proposed framework not only expands the theoretical underpinnings of earnings management but also serves as a novel evaluative tool for stakeholders, paving the way for broader application across diverse markets and sectors and rethinking earnings quality assessment methodologies through a data science lens. [ABSTRACT FROM AUTHOR]

Introduction: As global resource demands and environmental challenges intensify, China's vast marine resources present a significant opportunity for sustainable economic development. This study investigates the impact of financial development on high-quality growth in China's marine economy across 11 coastal regions from 2011 to 2020. Methods: We examine a mediation and moderation model linking financial development and marine economic quality in China, where the marine economy increasingly relies on financial support. This study proposes marine innovation output and industrial structure upgradation as mediators, with marine capital investment as a moderator. Results: Our findings reveal that financial development significantly promotes high-quality marine economic growth, albeit with regional heterogeneity. The strongest effect is observed in the Eastern Marine Economic Zone, while the Southern Marine Economic Zone shows the weakest impact. Marine scientific research and industrial structure upgrading serve as key mediating factors, with the former demonstrating a stronger intermediary effect. Notable, marine capital investment positively moderates the relationship between financial development and marine economic growth. Discussion: This study innovatively combines macro-finance and micro-finance indicators to construct a comprehensive financial development index system. It incorporates a multi-dimensional approach to measuring high-quality development in coastal regions, challenging one-size-fits-all models by highlighting regional variations. By providing insights into specific differences and underlying mechanisms, our study offers valuable guidance for policymakers in crafting region-specific strategies to leverage financial development for sustainable marine economic growth. [ABSTRACT FROM AUTHOR]

• We use a variety of network analysis metrics to measure the Chinese financial sector's closeness and centrality. • The intersectoral structural feedback relationship between the financial sector and other sectors is identified using Causative matrix. • Chinese financial sector has profound push effects in the economy. • The financial sector is becoming less tightly linked to other sectors as resource consumption and production distribution become more diverse. This study examines the intersectoral linkages and evolving role of the Chinese financial sector in the economic network, with a variety of network analysis metrics, and structural changes to its intersectoral structural feedback relationship, with the Causative matrix. Our analysis yields four main results. First, Chinese financial sector (with greater downstream network closeness than upstream closeness) drives growth in its downstream sectors and has significant supply-side effects in economy. Second, the financial sector serves as an important network intermediary, facilitating transactions and interactions among various economic sectors. Third, the more externalized (pre-Global Financial Crisis) financial sector, which received significant feedback from other sectors' final demand, became more internalized after the crisis. Finally, the financial sector is becoming less tightly linked to other sectors, with heterogeneous resource consumption and production distribution, and vulnerability to systemic risks. Policy integration of intersectoral linkages and financial leverage can promote economic growth and manage systemic risks. [ABSTRACT FROM AUTHOR]

The study investigates the inverse relationship between financial performance and capital structure for the Romanian B2C e-commerce companies, based on a representative sample of 437 companies active in the period 2005–2020. Statistical analyzes show the evolution of financial performance and the impact of the COVID-19 pandemic on it, depending on the company category. All company categories had better financial performance in 2020 compared to 2019, based on sample results. The study reveals valid reference values for the financial ratios of Romanian electronic commerce, being a model to be applied in any industry. The analysis of the causality of the financial variables and their correlations, on the sub-periods 2005–2008 and 2009–2020, both at the company category level and at the sample level, are the basis of the GMM approach. The econometric models Difference GMM and System GMM explain the relationship between financial performance and capital structure leading to interesting conclusions. As e-commerce has a sustainable development, the findings and conclusions of the study provide guidance for economic policies at the sectoral level. Financial performance in relation to strategic debt management depends on the company category. Stimulating the development of those categories of companies that ensure the efficient performance framework can be the key to a sustainable development of the national economy. The study is useful for managers, investors, financial analysts, decision makers, in financial education as well as for the banking system. [ABSTRACT FROM AUTHOR]

This research study aims to explore the impact of leverage on the investment choices made by selected companies. Specifically, the foundation for conducting the research is provided by the selected electrical enterprises. It is an effort to measure the relationship between investment and leverage. In this study, both independent and dependent factors were investigated. We examine the operating profit of the chosen businesses in order to cover fixed operating expenses, interest payments on borrowed funds, companies' investments, etc. We examine the assumptions in this study using statistical tools such as the t-test, mean, and standard deviation. We may draw the conclusion that the chosen companies' leverage has a favorable effect on their investments. [ABSTRACT FROM AUTHOR]

Using supervisory data on small and midsized nonfinancial enterprises (SMEs), we find that those SMEs with higher leverage faced tighter constraints in accessing bank credit after the COVID‐19 outbreak in spring 2020. Specifically, SMEs with higher pre‐COVID leverage obtained a smaller volume of new loans and had to pay a higher spread on them during the pandemic period. Consistent with an inward shift in loan supply, these effects were concentrated in loans originated by banks with below‐median capital buffers. Highly levered SMEs that relied on low‐capital large banks for funding before the pandemic were not able to substitute to other sources of debt financing and thus experienced more of a reduction in total debt as well as a decline in investment and employment. On the other hand, the unprecedented public support, especially the Paycheck Protection Program (PPP), mitigated the adverse real effect stemming from bank credit constraints. [ABSTRACT FROM AUTHOR]

This article explores the integration of cyberrisk quantification into risk governance, specifically focusing on risk appetite and tolerance. It acknowledges the challenges organizations face in this area and suggests that cyberrisk quantification can help address these challenges. The article outlines a framework for operationalizing risk governance, including steps such as CRQ assessments and setting risk appetite. It emphasizes the importance of aligning risk reduction projects with an organization's risk appetite and adjusting the budget accordingly. The text also discusses the importance of quantitatively governing cybersecurity, managing cyberrisk, and considering risk transfer strategies such as cyberinsurance. It highlights the need for capital allocation to account for residual risk not covered by insurance. Overall, the article provides guidance on aligning cybersecurity with other operational risks and improving risk governance. [Extracted from the article]

This research explores the mechanisms through which member states informally shape staffing decisions in the United Nations, extending the traditional view of influence beyond mere structural power within international organizations. Interviews with UN officials uncover three primary informal governance tactics: leveraging financial contributions, nurturing social networks, and fostering educational and institutional pathways for grooming candidates. These strategies subtly impact UN staffing, policy development, and access to sensitive information. The study points to the UN's structural challenges, such as reliance on voluntary funding and decentralized administration, which, coupled with the intertwined interests across organizational levels and the lack of effective oversight mechanisms, enable member states' informal influence. This environment not only restricts the involvement of developing countries but also undermines the UN's legitimacy and effectiveness. The findings illuminate the intricate dynamics of power within IOs, underscoring the need for a comprehensive understanding of influence and its implications for global governance. [ABSTRACT FROM AUTHOR]

The introduction of interest-bearing Central Bank Digital Currency (CBDC) presents central banks with an additional instrument for implementing monetary policy. This article develops a Heterogeneous Agents New Keynesian model, incorporating financial frictions, to investigate the transmission mechanism and wealth distribution effects of digital currency interest rate from two distinct perspectives: (i) the interaction between the central bank and financial intermediaries and (ii) the substitution dynamics between cash and digital currency. By comparing models that include and exclude financial intermediaries, our research uncovers that in a society where CBDC is fully implemented, the reverse actions of financial intermediaries can hinder the efficacy of the central bank's monetary policy and result in elevated costs associated with policy formulation. Additionally, the leverage effect of financial intermediaries exacerbates wealth inequality and contributes to the expansion of investment, thereby promoting an increase in economic output. Comparing societies where CBDC entirely replaces cash with those where CBDC coexists alongside cash, this paper demonstrates that the presence of cash mitigates significant economic fluctuations triggered by CBDC, while the complete elimination of cash amplifies wealth inequality. Consequently, it is crucial for the central bank to account for the behavior of financial intermediaries when adjusting digital currency interest rate and explore the development of an appropriate interest rate mechanism tailored to digital currency. Simultaneously, maintaining cash circulation for a specific period can act as an economic stabilizer. [ABSTRACT FROM AUTHOR]

Governments across jurisdictional boundaries leverage financial incentives as a policy strategy to support and develop the business of small and medium enterprises (SMEs). This study is a systematic rety view of the literature on direct governmental finance to SMEs through loans, guarantees, and credit lines between 2000–2021. Among the 89 studies identified for inclusion, four themes emerged: provision of government loans, other government finance provision, external reasons for government finance provision, and the purpose and outcomes of government financing. The key managerial and finance findings in this study are that a greater awareness among SMEs is needed for accessing existing financial incentives from the government. Likewise, regarding government policy, this study highlights a need to clarify the purpose of loan provision to SMEs. Finally, despite calls by researchers for more qualitative assessments of SMEs and targeted government loan provision, there remains a lack of evidence to characterize this interelationship in practice. [ABSTRACT FROM AUTHOR]

The face of corporate governance is changing as new technologies in the scope of artificial intelligence and data analytics are used to make better future-oriented decisions on performance management. This study attempts to provide empirical results to analyze when the impact of diversity on the board of directors is most evident through the multi-breaks model and artificial neural networks. The input data for the simulation includes 853 electronic companies listed on the Taiwan Stock Exchange from 2000 to 2021. The empirical results show that the higher the percentage of female board members, the more influential the company's performance is, which is only evident when the company is in good business condition. By integrating ANNs with multi-breakpoint regression, this study introduces a novel approach to management research, providing a detailed perspective on how board diversity impacts firm performance across different conditions. The ANN results show that using the number of business board members for predicting Return on Assets yields the highest accuracy, with female board members following closely in predictive effectiveness. The presence of women on the board contributes positively to ROA, particularly when the company is experiencing favorable business conditions and high profitability. Our analysis also reveals that a higher percentage of male board members improves company performance, but this benefit is observed only in highly favorable and unfavorable business conditions. Conversely, a higher percentage of business members tends to affect performance during periods of high profitability negatively. The power of the board of directors and significant shareholders is positively correlated with performance, whereas CEO power positively impacts performance only when it is not extremely low. Independent board members generally do not have a significant effect on profits. Additionally, the company's asset value positively influences performance primarily when the return on assets is high, and increased financial leverage is associated with reduced profitability. [ABSTRACT FROM AUTHOR]

While share pledging is a widespread leveraged financing practice in global stock markets, its potential impact on firms' exposure to market risk remains a topic of concern. In the context of the Chinese market, this study investigates the relationship between insiders' share pledging pressure and stock liquidity risk, with a particular focus on stock liquidity commonality. Using data from Chinese firms listed between 2009 and 2022, we find a positive correlation between heightened share pledging pressure and increased stock liquidity commonality. To precisely capture the margin call pressure arising from share pledging, we introduce an innovative method that considers both the price at which shares are pledged and their subsequent price dynamics. This relationship persists after addressing endogeneity concerns. Furthermore, we find that firms under significant share pledging pressure often resort to earnings manipulation, which exacerbates stock liquidity commonality. The findings underscore the significance of understanding the risks and impacts of share pledging in terms of liquidity risk. Insiders who utilize share pledging as a financing channel face a delicate balance between the benefits of expanded funding sources and the risks of losing control due to sustained stock price declines. This study provides valuable insights for investors, policymakers, and regulatory authorities in managing the potential liquidity risks associated with share pledging activities in the Chinese market. [ABSTRACT FROM AUTHOR]

Compared with regular employees, independent contractors (ICs) offer labor flexibility and cost savings to their employers. Using a difference-in-differences design around the 2004 Massachusetts law that discourages IC usage, we find that this exogenous decrease in IC usage makes treated firms' earnings more sensitive to changes in sales, increases labor-related expenses, and reduces profitability. Firms subsequently reduce share repurchases. The decrease is more pronounced for firms with high operating leverage and financial constraints. Our results are robust to entropy balancing. We conclude that IC usage affects firms' operating leverage and profitability, which in turn, influence payout policy. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.00103. [ABSTRACT FROM AUTHOR]

Does capital structure matter for farms productivity? Do bank loans increase or decrease farms efficiency? To address this question, I use farm-level data for 2014–2020 from Amur region, which is one of the most typical Russian regions in terms of agricultural development. I find some evidence of a negative correlation between financial leverage and total factor productivity in Amur Oblast farms. I also observe a negative correlation between financial leverage and partial productivity measures such as labor productivity, crop yield, and return on fixed assets. The negative relationship between enterprise productivity and the share of loans in liabilities can be explained, on the one hand, by the fact that bank loans are more often used by struggling, inefficient agricultural enterprises, i. e. adverse selection may take place. On the other hand, the negative relationship between firm productivity and bank credit may be due to the non-market nature of the credit they receive, with the government subsidizing the interest rate and/or guaranteeing the loan obligations. As a result, farms face soft budget constraints that reduce the incentives of owners and management to improve farm efficiency. The two proposed explanations (adverse selection and soft budget constraints) are not mutually exclusive, but rather complementary

We study 6,083 European firms that were acquired between 1999 and 2015. Soon after the acquisition, the acquired firms promptly and substantially close the gap between their actual leverage ratios and their target (optimal) ratios. Firms that were over- (under-) leveraged at the start of their acquisition year move their debt-to-assets ratio from 34.1% to 20% (10% to 18.5%) by the end of the following year. Under-leveraged firms expand their assets rapidly following acquisition, as they gain improved access to investable resources. Our results are consistent with the trade-off theory of capital structure and with the existence of firm-specific target leverage ratios. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this research is to use the meta-analysis approach to analyze and combine the conflicting and inconsistent results obtained in past researches in the field of investigating the effects of the characteristics of companies on the audit report lag. Company characteristics include company size, company profitability, company age, Company loss and company leverage. In the research conducted in the past years, the audit report lag is known as the dependent variable and the specific characteristics of the companies as the independent variable. To achieve the research objectives from the approach [28] and also, to apply Cochran-Egger's Q tests, Including 77 studies including 27 domestic studies during the years 2013 to 2022 and 50 foreign studies during the years 2010 to 2023 were reviewed. The results indicate that there is no significant relationship between the size of the company and the independent audit report lag, But there is a negative relationship between profitability, age and the independent audit report lag, Also, there is a positive relationship between the leverage and the loss of the company with the audit report lag. [ABSTRACT FROM AUTHOR]

The main goal of this study is the effect of Stock Liquidity and Corporate Governance on the Financial Leverage. In order to test the hypotheses, a sample of companies accepted in the Tehran Stock Exchange was selected between 2016 and 2021, which was analyzed using R software. The research method is multivariate regression using panel data. According to the research findings, it can be said that there is not a meaningful relationship between Stock Liquidity, Corporate Governance and Financial Leverage. Companies finance through debt regardless of the stock liquidity, therefore, stock liquidity does not play a decisive role in financing. Better corporate governance mechanisms apply more supervision, so that these mechanisms prevent the opportunistic behavior of managers and preventing them from hiding and manipulating information. By examining the mutual effect of stock liquidity and the quality of corporate governance, a significant relationship was found with the financial leverage of companies accepted in the Tehran Stock Exchange. The study tries to contribute to the current literature of corporate governance and corporate capital structure by providing new evidence on the causal impacts of corporate governance quality on financial leverage. Also, this study contributes to the literature on corporate governance quality and financial leverage by exploring the mechanism of corporate governance quality and financial leverage from internal financing and equity financing.

Multiple factors have contributed to the burgeoning emphasis on Corporate Social Responsibility (CSR) within the Vietnamese banking sector. There is a burgeoning consciousness among consumers and stakeholders regarding the significance of sustainable and ethical business practices. With increasing social awareness, customers are progressively opting to support businesses that are dedicated to CSR. Moreover, regulatory entities in Vietnam have initiated measures to encourage CSR practices among banks. This study underscores the profound impact of CSR on the financial performance of the banking sector. The authors developed hypotheses to find out the determinants of the financial performance of Big 4 banks in Vietnam by collecting secondary data in the 2017-2022 period. To answer this question, the Person test, Pool OLS, FEM, REM and FGLS models were used, and then the Hausman test, Wald test and Wooldridge test were used to test the suitable model. The research showed that financial performance in the Big 4 banks in Vietnam (Vietcombank, BIDV, VietinBank, and Agribank) was negatively impacted by capital ratio and financial leverage and positively and significantly influenced by corporate social responsibility and overhead expenses. Thus, by integrating CSR initiatives into their business strategies, banks can enhance their reputation, attract socially conscious customers, and improve return on assets (ROA). Overhead expenses are another key factor significantly impacting a bank's ROA. The Big 4 banks should focus on optimizing their cost structure by identifying and eliminating inefficiencies in their operations. Implementing digitalization initiatives, streamlining processes, and investing in technology can reduce overhead expenses and improve operational efficiency. From these results, the paper gave recommendations for banks to improve their financial performance.

Recently, corruption has become widespread, and firms' responses to corruption carry significant implications. The aim of this study is to check how corruption levels in Jordan influence the capital structure of 80 non-financial companies listed on the Amman Stock Exchange (ASE) from 2013 to 2022. Capital structure is the main dependent variable, and corruption is the crucial variable analyzed as the independent factor. Control variables include company age, profitability, asset tangibility, company size, and the Gross Domestic Product (GDP), in addition to the inflation rate, to create a solid framework for analyzing this nexus. This quantitative research paper applies the fixed-effect (FE) estimation to examine the static model of the study and the generalized method of moment (GMM) for the dynamic model via panel data investigation encompassing 800 company-year observations. The R2 results explain 42.1% of the variations in capital structure level. Accordingly, a 1% upsurge in corruption is accompanied by a 0.0367-unit upsurge in the capital structure ratio. This response is interpreted through the lens of the shielding theory, suggesting that firms raise debt to protect themselves against the predations of corrupt officials. The analysis reveals meaningful connections between the control variables and the capital structure. Specifically, increases in tangibility, firm size, inflation, and GDP correspond to a 3.56%, 1.07%, 6.06%, and 2.143% increase in capital structure, respectively, indicating a positive influence. Conversely, the firm age and profitability variables show adverse effects on capital structure, with coefficients of –1.46% and –7.3%, respectively.

This paper empirically investigates the influence of uncertainty on corporate leverage for 6248 Indian firms for the period 2011– 2021. We find that their leverage tends to fall when policy uncertainty increases. Further, we investigate the two channels through which policy uncertainty affects corporate leverage: demand and supply channels. We find that policy uncertainty increases the burden of debt financing. Furthermore, companies are inclined towards reducing their investment demand during periods of higher uncertainty. Both of these factors contribute to lower debt financing and leverage. Our findings are robust to endogeneity concerns and diverse model identifications using alternate measures of leverage and policy uncertainty. [ABSTRACT FROM AUTHOR]

Introduction: China’s rural financial landscape has long been characterized by exclusion, leaving countless farmers without access to essential financial services. However, the advent of digital financial inclusion presents a promising solution, offering low-cost, high-penetration avenues to bolster agricultural sustainability. This paper unravels how “Byte-Sized Finance” can yield “Bushel-Sized Benefits” in China’s agricultural green development. Methods: Methodologically, we pioneer a novel system to gauge agricultural green development across 31 Chinese provinces spanning from 2013 to 2021. Empirically, employing fixed-effect, mediation effect, and spatial Durbin models. Results: Our study reveals the intricate pathways through which digital financial inclusion influences agricultural green development. We find that it exerts its impact through the lenses of industrial structure and entrepreneurship, operating at both macro and micro levels. Furthermore, our analysis uncovers spatial spillover effects, shedding light on the differential roles played by these mechanisms across regions. Discussion: This groundbreaking discovery underscores the transformative potential of leveraging digital financial inclusion to propel China toward agricultural green development. By shedding light on these crucial dynamics, our findings offer insights for policymakers, researchers, and practitioners striving to foster sustainability within China’s agricultural sector. [ABSTRACT FROM AUTHOR]

Copyright of Environmental & Social Management Journal / Revista de Gestão Social e Ambiental is the property of Environmental & Social Management Journal and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study investigates the impact of digital finance on corporate leverage ratios. The study employed a large sample of China's Shanghai and Shenzhen A-share non-financial listed enterprises from 2011–2020. The study's results depict that the development of digital finance can significantly reduce the leverage ratio of enterprises. We empirically identified that digital finance affects the difference in the term structure of the corporate leverage ratio. It was found that the development of digital finance has a significant negative impact on enterprises' short-term and long-term leverage ratios. Moreover, our heterogeneity analysis shows that the negative effect of digital financial development on corporate leverage ratios is different in state-owned and non-state-owned enterprises, large-scale and small-scale enterprises, and high-leverage and low-leverage enterprises. Mechanism analysis shows that the development of digital finance can reduce corporate leverage by lowering financing costs, alleviating financing constraints, and weakening non-systemic risks. Therefore, policymakers should focus on developing and adopting digital finance by creating a supportive regulatory environment, improving access to digital financial services, and encouraging innovation in the digital finance sector. Finally, our results remain robust after addressing endogeneity issues and conducting robustness checks. [ABSTRACT FROM AUTHOR]

This research was conducted to determine and assess the financial leverage and the enterprise value of manufacturing industries in the Municipality of Bulan Sorsogon, Philippines and to establish the relationship of these two variables. This also determines the factors that influence the financial leverage decisions of the business owners. This study used mixed design. A total of 92 registered manufacturing business owners operating in the said Municipality were the primary respondents of the study. Vertical analyses and linear regression analyses were utilized. This study concludes that the manufacturing business enterprises in the Municipality of Bulan Sorsogon have significant amount of debt relative to its equity as manifested by its financial leverage. The respondents were likewise found to have a low enterprise value, with exception to company’s book value, which suggests a lower market perception of the company's worth, potentially reflecting weaker financial performance or growth prospects. Lack of personal capital, financial risk tolerance and cost of debt, cash flow stability, growth opportunities and regulatory and legal considerations were the identified factors that influence the financial leverage of the manufacturing business owners. From the results, the researcher highly recommends that manufacturing business owners may consider optimizing their capital structure to ensure an appropriate balance between debt and equity. [ABSTRACT FROM AUTHOR]

In light of the pivotal role that taxes play as a primary source of income, particularly within developing economies, this study aims to examine the influence of various corporate governance (CG) mechanisms on tax avoidance. We employ three proxies to measure tax avoidance or tax management within companies listed on the Tehran Stock Exchange (TSE). The CG mechanisms under scrutiny encompass board size and independence, CEO duality, auditor type, common stock ratio of at least 5% to total stock, managers' common stock holdings about total stock, gender diversity, manager ownership value, board meeting frequency, CEO stock ownership percentage, institutional shareholders' stock holdings, audit committee membership, and financial specialization. This research investigates 192 companies listed on the TSE, utilizing data available on the TSE website from 2011 to 2021. Our findings indicate that while several CG mechanisms, such as board size and independence, audit firm size, gender diversity, institutional ownership, and the specialization of audit committee members, serve to reduce tax avoidance, CEO duality exacerbates it. Moreover, profitability, financial leverage, and capital significantly inhibit tax avoidance. In contrast, the return on assets (ROA), economic growth, and inflation have a pronounced positive association with tax avoidance. A notable constraint of this study lies in its exclusive focus on publicly listed firms, driven by the availability of relevant information. This study offers valuable insights into the three dimensions of tax avoidance and their interaction with CG mechanisms, with implications for performance monitoring. [ABSTRACT FROM AUTHOR]

There are certain times in our economic and financial environments when it makes sense to assess carefully and dispassionately where we are in the credit cycle and how this cycle relates to the business cycle. Now, mid-2024, is one of those times, as the economic uncertainties are at substantial levels. This note reflects my long history of studying credit cycles dating back to the early 1970s. My current assessment is that the Benign Credit Cycle we have enjoyed since 2010, with the exception of a few months in 2016 and early 2020, ended in 2023. We recently reached an inflection point for an average credit risk scenario. This assessment is based on an analysis of a number of historical indicators over the last 50 years. This conclusion is tempered by the possibility that the U.S. credit picture will continue its heightened risk trend toward a Stressed Scenario by the end of 2024, and combined with a "hard-landing" economic recession, we could witness another financial-credit crisis. [ABSTRACT FROM AUTHOR]

The research aims to analyze and determine the influence of profitability, leverage, company size, ownership structure, and board of commissioners on risk management disclosure. This research was conducted using an associative quantitative research method with data analysis tools using multiple linear regression using SPSS 20 software with a population of 18 companies and a sample of 10 companies engaged in the oil and gas energy sector listed on the Indonesia Stock Exchange for the period 2018-2022. The results of this study show that leverage and company size partially have a significant effect on risk disclosure, while profitability, ownership structure, and board of commissioners partially have a non-significant effect on risk management disclosure. The results of the smear test showed that the results of profitability, leverage, company size, ownership structure, and board of commissioners together affected risk disclosure by 54%. [ABSTRACT FROM AUTHOR]

Purpose: We conducted this study to examine the relationship between revenue concentration and a firm's financial leverage. We aimed to analyze whether revenue concentration influences a firm's capital structure decisions and whether this relationship is driven by customer-specific investments or the direct effect of revenue concentration itself. Additionally, we investigated the role of asset redeployability in mediating or moderating the relationship between revenue concentration and financial leverage. Design/methodology/approach: The paper investigates the relationship between revenue concentration and a firm's financial leverage. The results indicate a negative association between revenue concentration and financial leverage. This finding holds across various regression models and is statistically significant. Furthermore, the paper explores the potential role of asset redeployability in explaining the relationship between revenue concentration and financial leverage. The results indicate that even after controlling for asset redeployability, the negative relationship between revenue concentration and leverage remains significant, suggesting that revenue concentration affects capital structure decisions independently of the risks associated with relationship-specific investments. Robustness tests are conducted using a three-stage least squares approach to account for the simultaneity between revenue concentration, asset redeployability and capital structure. Findings: Our findings demonstrate that revenue concentration is negatively associated with financial leverage, even after accounting for asset redeployability. This suggests that revenue concentration affects capital structure decisions independently of the risks associated with customer-specific investments. Furthermore, we performed robustness tests to address potential simultaneity issues between revenue concentration, asset redeployability and capital structure. Research limitations/implications: The study relies on available data sources, which may have inherent limitations in terms of accuracy, completeness or consistency. The quality of the data used in the analysis could impact the robustness of the findings. Time Period: The study focuses on more recent years, which might limit the ability to compare the findings with studies conducted over different time periods. Historical trends or structural changes that could impact the relationship between revenue concentration and financial leverage might not be fully captured. Practical implications: Firms with higher revenue concentration tend to have lower financial leverage. Recent years show a negative relationship between profitability and market leverage compared to earlier periods. Revenue concentration has a distinct effect on financial leverage, not fully explained by risks from relationship-specific investments or asset redeployability. Insights for firms in managing capital structure decisions, considering revenue concentration and its implications for leverage. Originality/value: This research is one of the first papers that investigates the impact of revenue concentration on the capital structure choices of firms. By exploring the relationship between revenue concentration and financial leverage, the study contributes to the existing literature by shedding light on an underexplored area. Thus, this study adds originality to the field by addressing a research gap and contributing to the understanding of the relationship between revenue concentration and capital structure choices. [ABSTRACT FROM AUTHOR]

Earnings management (EM) is the practice of adjusting profits or earnings on financial statements at the discretion of the management. This study undertook a regression analysis of the earnings management model, with data from 300 non-financial listed companies on the Vietnamese stock exchange during the period 2016 to 2021 to determine whether the COVID-19 pandemic has had an impact on earnings management. To estimate earnings management, compared with the original model, we add the leverage variable (LV) was used as earnings management proxy in this research. The results show that the COVID-19 pandemic positively and significantly impact the earnings management of non-financial listed companies. Moreover, it was found that managers are more involved in real earnings management than accrual earnings management, implying that financially distressed firms need to reassure investors to raise more capital during the pandemic. However, there is no evidence of a trade-off between these two techniques during the pandemic compared to before the pandemic. Additionally, this study provides evidence that the model by Roychowdhury, following Cohen et al., and the performance-matched model by Jones, following Kothari et al. are more suitable for detecting EM behavior when factoring in the financial leverage (LV) variable for firms with a high debt ratio in developing countries. JEL Classification : H8, M42 Plain language summary: Purpose. This study determines whether the COVID-19 pandemic has impacted earnings management (levels, trends, and techniques) using emerging markets datasets. Methods. The regression analysis of the earnings management (EM) model, with data from 300 non-financial listed companies on the Vietnamese stock exchange from 2016–2021. We use the model by performance-matched Jones, following Kothari et al. and the model by Roychowdhury, following Cohen et al. to measure the dependent variable is EM through the choice of method—optimal estimation between Pool OLS, FEM, and REM. The results of measuring EM with the above models are not statistically significant with our research data. Therefore, we have added leverage (LV) as an EM proxy. After adding the LV, the models estimate the EM dependent variable with statistical significance. Conclusions. The results show that the COVID-19 pandemic positively and significantly impact the EM. Moreover, it was found that managers are more involved in REM than AEM, implying that financially distressed firms need to reassure investors to raise more capital during the pandemic. However, there is no evidence of a trade-off between these two techniques during the pandemic compared to before the pandemic. Additionally, this study provides evidence that he original EM estimator model are more suitable for detecting EM behavior when factoring in the financial leverage (LV) variable for firms. Implications. In developing countries with large debt-bearing firms, leverage impacts earnings management. Limitations. The analysis of the income management behavior of enterprises by industry has yet to be conducted. [ABSTRACT FROM AUTHOR]

This research investigates the efficacy of government control in the context of financial constraints and earnings quality, focusing on Vietnam's listed companies. Employing a dynamic approach and utilizing the System Generalized Method of Moments (SGMM) to mitigate endogeneity concerns, the study examines annual data from non-financial Vietnamese firms listed on the Hanoi and Ho Chi Minh Stock Exchange (HNX & HOSE) spanning 2012 to 2022. Non-financial firms are the study's main focus because their operational dynamics, capital structures, and strategic priorities markedly differ from their financial counterparts. Moreover, non-financial companies in Vietnam contend with multifaceted challenges arising from government control including potential bureaucratic hurdles, regulatory constraints, and strategic limitations, directly affecting their financial flexibility, and consequently their ability to ensure earnings quality. Earnings quality is assessed through the average values of four key characteristics—persistence, predictability, variability, and smoothness—while financial constraints are proxied by firm size, foundation years, financial leverage, and dividend pay-outs. Findings reveal a deleterious impact of financial constraints on earnings quality, with state ownership exhibiting varying effects at different levels. Remarkably, the optimal range for state ownership, specifically State-Owned Enterprises (SOEs) rates from 35% to 50%, is identified as pivotal in ameliorating the adverse consequences of financial constraints on earnings quality. The research acknowledges limitations in the exclusive focus on specific earnings characteristics and the potential multicollinearity issue arising from the interaction variable in the SGMM model. Practically, the study proposes policies emphasizing the need for investors to discern financial constraint signals, companies to mitigate financial constraints, and governments to play a pivotal role in alleviating financial constraints to enhance earnings quality. Socially, the research underscores the imperative nature of earnings quality in investment decisions, cautioning against investing in companies masking inefficiencies with manipulated profits, thereby posing risks to individual investors and the overall financial market. The originality of this study lies in its alternative representations of financial constraints, nuanced examination of state ownership at different levels, and its elucidation of the moderating role of state ownership in the relationship between financial constraints and earnings quality. [ABSTRACT FROM AUTHOR]

In today's globalizing economy, the importance of timely and accurate financial reporting has become more crucial than ever. These reports provide a detailed insight into a company's financial health and performance, offering critical information to investors, creditors, and other relevant parties to make informed decisions. While determining the publication timing of financial reports, strategies are set based on the weight of good and bad news. Companies tend to announce positive news quickly, especially during open market periods, to support their corporate reputation and boost the confidence of shareholders and potential investors. On the other hand, companies might be inclined to withhold or announce bad news during closed market periods to minimize or delay negative market reactions. Through these strategies, firms aim to create either a positive or negative impact on shareholders and investors and control the effect of news most efficiently. The purpose of this study is to examine whether the timing of financial reporting varies depending on firm characteristics. Logistic regression analysis was conducted using data from 2345 observation obtained from companies traded on Borsa Istanbul between 2009 and 2019. The results of the study indicate that firm characteristics such as firm size and financial leverage have a significant effect on whether financial reports are announced on weekdays or weekends. These findings reveal that the timing strategies in financial reporting can vary depending on certain characteristics of the firm. Notably, they highlight that when deciding how and when to announce positive or negative news, companies consider both their own characteristics and market conditions. [ABSTRACT FROM AUTHOR]

This article provides empirical evidence on the zero-leverage phenomenon for a sample of European listed firms for the period 1995-2016. It is shown that there are two types of firms with zero leverage: the financially constrained firms that face obstacles in obtaining external finance, as predicted by the financial constraints hypothesis; and the financially unconstrained firms that maintain zero leverage as a consequence of a financing decision, which supports the financial flexibility hypothesis. The zero-leverage phenomenon is also influenced by the financial system that prevails in each country, being boosted (inhibited) in market-based (bank-based) financial systems, and by the country's macroeconomic conditions, with the recent financial and sovereign debt crises increasing the propensity for zero leverage in marketbased countries. We also find that the financial flexibility hypothesis seems to be more important in market-based systems and that the financial constraints approach did not gain importance during the crisis period. Our results are robust to the use of alternative measures of debt conservatism, explanatory variables, and econometric methods and maintain their validity when we allow for endogeneity in firm size and dividend payments. [ABSTRACT FROM AUTHOR]

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This study aims primarily to demonstrate the importance of four types of financial ratios, namely profitability ratios, turnover rates, activity cost ratios, and financial leverage ratios, as well as to explain their impact on cash dividend distribution policies for a sample of Iraqi banks traded on the Iraqi Stock Exchange for the period (2010 - 2017). The number of banks was chosen from the Iraq Stock Exchange (13 banks), and the data for the aforementioned time period was taken according to the bulletins and financial statements issued by the official website of the market. After conducting statistical analysis of the data using the statistical package program (SPSS), where the sample size used was (104) observations, and the number of independent variables was (9), which represent the financial ratios, it was found that there is a significant impact of these financial ratios on determining profit distribution policies, and the study recommended to the specialists In the financial field, using these ratios and focusing on them in the financial analysis aspect. [ABSTRACT FROM AUTHOR]

The study aims to ascertain the key determinants of firm value and to analyze the contribution of each determinant at different percentiles of the probability distribution of firm value for 1,592 firms across eight major Indian manufacturing firms. The sample consists of data from 2009 to 2020 and studies the variables such as enterprise value, effective tax rate, firm size, profitability, firms' growth rate, financial leverage, asset tangibility, and non-debt tax shield. The study employed, linear, non-linear, and non-parametric panel regression models. Quantile regression models are further used to decompose the determinants at various quantiles of firm value. Several diagnostic tests such as Breusch–Pagan, White's Test, and Sargan Test are used to ensure robust estimates. The results obtained from this study show the presence of a concave relationship between firm value with firm size, financial leverage, and non-debt tax shield. Effective tax rates and inflation rates substantially and positively affect the value of firms in higher percentiles. The capital structure is found to significantly and positively affect the value of firms in the lower percentile. The profitability is also found to contribute to the value of firms across all the quantiles, whereas sales growth fails to strongly drive the value. [ABSTRACT FROM AUTHOR]

This study examines the impact of political risk on financial markets by leveraging high-frequency (minute-by-minute) price data and precise event timestamps from media outlets' Twitter feeds during Pedro Castillo's failed coup attempt in Peru. Unlike previous research that relies on low-frequency data and protracted political changes, our analysis demonstrates that daily closing prices may misleadingly suggest negligible impact. In contrast, high-frequency data reveal that markets promptly and accurately incorporated news of the coup attempt and, in turn, its failure into asset prices. Our analysis shows that breakdowns in democratic governance negatively affect asset prices, while the restoration of the rule of law, in the form Congressional checks on the Executive branch, boosts them. Moreover, our analyses suggest that domestic companies and sectors with less mobile assets are more vulnerable to these political risks. Our findings underscore the crucial role of high-frequency data in accurately capturing how institutions and political risk affects equity markets. [ABSTRACT FROM AUTHOR]